Since ancient times, various forms of currency have evolved, from shells and tokens to cash, bank deposits, and digital wallets. These forms adapt to the demands of each era. In the current digital economy, blockchain technology has given rise to new forms of digital currency and an emerging Web3 payment ecosystem.

Stablecoins, as a novel form of currency representation, have expanded from their initial use as collateral or a medium of exchange in the crypto space to permeating all aspects of everyday financial life. Over the past five years, stablecoins have risen dramatically and increasingly integrated into the global economy. Blockchain, as a foundational financial infrastructure, is poised to be fully leveraged not only within the crypto market but also by the traditional financial system.

By the end of 2024, the total market capitalization of stablecoins—functioning on infrastructures parallel to traditional financial systems—had surpassed $200 billion. More applications utilizing stablecoins as a medium of exchange have been unlocked. This marks a significant leap from just five years ago when stablecoins were in their infancy.

This article begins by summarizing recent insights and forecasts from major institutions such as a16z and Coinbase on the stablecoin market. It then integrates the analysis from How Stablecoins Will Eat Payments, and What Happens Next to answer pivotal questions, including:

• How can stablecoins enhance and transform traditional payment systems?
• How can they create more practical application scenarios?
• How can they improve corporate balance sheets and boost profitability?
• How can stablecoins achieve mass market adoption?

Lastly, the article adopts a broader Web2 cross-border payment lens to analyze future trends in the stablecoin market, offering professionals in the fields of stablecoins, Web3 payments, and cross-border payments a comprehensive reference point.

1. The Explosion of Stablecoin Data

In the current cryptocurrency market cycle, stablecoins have garnered widespread attention. A16z Crypto recently published its State of Crypto Report 2024, which explicitly stated that stablecoins have found product-market fit over the past year and have become one of the most prominent “killer applications” in the crypto space.

Stablecoins provide enterprises and developers building innovative payment products with a more accessible platform. Benefiting from the proliferation of smartphones and the implementation of blockchain technology, stablecoins have the potential to become one of humanity’s greatest financial empowerment movements in history.

In 2024, the stablecoin market experienced significant growth, with the total market capitalization increasing by 48% to $193 billion (as of December 1). Some market analysts believe that, based on the current growth trajectory, this industry could expand to nearly $3 trillion within the next five years.

(2025 Crypto Market Outlook, Coinbase)

Stablecoins simplify value transfer, enabling rapid global value movement. They are increasingly being used in blockchain payment rails, building robust payment systems that facilitate remittance payments and streamline cross-border trade.

As of November 30, 2024, the stablecoin market had settled nearly $27.1 trillion in transactions—almost three times the $9.3 trillion recorded during the same period in 2023. Quarterly transaction volumes have exceeded $3.9 trillion, more than double Visa’s figures, underscoring their practicality. Additionally, by daily active addresses, stablecoins account for approximately one-third (32%) of daily cryptocurrency usage, second only to DeFi at 34%.

The 48% growth in stablecoin market capitalization year-to-date partially reflects increased capital deployment into the crypto ecosystem, representing greater liquidity and easier value exchange. This marks a significant shift compared to 2023, when intensified regulatory crackdowns, the U.S. regional banking crisis, and high-yield environments in several regions (including the U.S.) led to a 5.5% decline in stablecoin market capitalization.

2. The Rise of Stablecoin Trends

According to a Visa report, even after adjusting for non-organic transactions (such as bot activities or automated transfers), stablecoins have settled $5.0 trillion in transactions so far in 2024. This adjusted transaction volume represents a year-over-year growth of approximately 50%, indicating that stablecoins are rapidly catching up with the largest global payment networks.

（Analysis of the Visa Report: Stablecoins Penetrating the Global Economy）

The transaction data for stablecoins reflects significant usage in peer-to-peer (P2P) transfers and cross-border business-to-business (B2B) payments. Coinbase further suggests that the next wave of true cryptocurrency adoption could stem from stablecoins and payment systems, which helps explain the surge of interest in this sector over the past 18 months.

Similarly, Y Combinator recently published an article stating that despite ongoing debates about the practicality of blockchain technology, stablecoins will undoubtedly become a key component of the future of money. Nearly 30% of global remittances are now conducted via stablecoins, and traditional financial institutions like Visa are offering platforms for banks to issue their own stablecoins. Furthermore, Stripe’s recent $1 billion acquisition of stablecoin startup Bridge is expected to draw even more investor interest and capital to the sector, making this the perfect time to launch a stablecoin startup.

Mastercard, in its 2025 report on the top 10 payment trends, also emphasized the transformative potential of blockchain and digital assets in enhancing global financial and commercial systems. Cryptocurrencies, stablecoins, and tokenized assets have moved from concepts to commercialization, particularly in applications tied to real-world assets. By 2025, blockchain technology is expected to significantly improve speed, security, and efficiency, especially in B2B and commercial payments.

While some businesses are showing early interest in stablecoins (notably in P2P payments), optimism around regulatory compliance is paving the way for broader experimentation. A16z predicts a wave of innovation in 2025, particularly as large enterprises begin to recognize the cost savings and new profit opportunities enabled by switching to stablecoin payment channels.

3. Categories of Stablecoin Payment Projects

Blockchain technology has emerged as a significant force in the payments industry, with various projects leveraging its capabilities to meet diverse needs. From facilitating cross-border transactions to automating complex payroll workflows, these blockchain-based payment solutions aim to enhance efficiency, transparency, and scalability for both businesses and individuals in financial transactions. To analyze the prospects of Web3 payments, the Block Pro Research team conducted a study on 146 projects, categorizing them into the following verticals:

1. Payment-Focused Protocols \ These are networks that provide the clearing and settlement infrastructure for seamless, secure, and scalable Web3 payments. Often functioning as the foundational layer for other payment-related tools and applications, these protocols enable cross-border or on-chain transactions.
2. Payment Consumer Solutions \ Projects in this category focus on developing user-friendly interfaces or applications, allowing retail users and businesses to conduct financial transactions. Examples include wallets and remittance service providers. The key focus is to enhance the speed, cost-efficiency, and convenience of fiat and cryptocurrency transactions through blockchain technology.
3. Automated Payment Infrastructure \ Platforms in this group utilize smart contracts and off-chain technologies to manage complex payment workflows, such as recurring payments, payroll, and subscriptions. By abstracting blockchain complexities, these solutions improve transaction efficiency while enabling SaaS integrations.
4. Gateways and Ramps These services aim to connect fiat currency with digital assets, making it easier for mainstream users to enter and exit the crypto ecosystem. Such projects typically offer APIs, SDKs, or plugins to integrate Web3 payments into traditional payment systems.

Among these categories, consumer payment solutions account for 58% of the total projects. This category includes notable examples like Binance Pay, Transak, and Stripe, which focus on providing accessible and user-friendly payment tools for both businesses and individual users. These projects highlight the growing demand for efficient digital payment solutions that bridge traditional financial systems with blockchain technology.

(Mapping Out Crypto Payment’s Ecosystem, The Block Research)

The peak of crypto payment project launches occurred in 2021, with 38 new projects starting up, likely driven by the enthusiasm of the last cryptocurrency bull market. In the years that followed, this number dropped sharply due to the prolonged bear market cycle and the rise of other popular cryptocurrency narratives, such as DeFi and gaming. Looking ahead, as the United States moves toward more crypto-friendly legislation, blockchain projects related to payments could experience a resurgence, potentially marking 2025 as the beginning of a new growth era for this foundational use case.

Ethereum is the most widely adopted blockchain for Web3 payment projects, accounting for 20% of the total. Its extensive developer ecosystem and mature infrastructure make it a reliable choice for many payment applications. Solana, known for its high throughput and low transaction costs, is the third most popular blockchain for payment projects, underscoring its appeal to developers seeking scalability and efficiency.

(Mapping Out Crypto Payment’s Ecosystem, The Block Research)

4. The Advantages of Stablecoin Payments

Compared to traditional payment methods, stablecoin payments enable faster and cheaper transactions, which has led to increased adoption in digital payments and remittances. More payment companies are now looking to expand their stablecoin infrastructure. The first major use case for stablecoins may soon go beyond transactions, evolving into global capital flows and commerce.

Both businesses and individuals are increasingly using stablecoins like USDC to meet regulatory compliance requirements and integrate seamlessly with payment platforms such as Visa and Stripe. Notably, Stripe’s acquisition of stablecoin infrastructure company Bridge in October 2024 for $1.1 billion marked the largest deal in the crypto industry to date.

The current payment industry is dominated by banks, payment networks, and fintech companies, which charge high fees for every step of the payment process under the guise of offering compliance and convenience. This model erodes businesses’ profitability while stifling competition and limiting innovation.

4.1 Stablecoins as a Superior Solution

Stablecoins offer lower fees, broader accessibility, and increased competition among payment service providers. By reducing transaction costs to near zero, stablecoins allow businesses to overcome the cost barriers imposed by traditional payment solutions. Adoption is expected to start with businesses most burdened by current payment inefficiencies and gradually disrupt the entire payments industry.

Stablecoins are now the cheapest method for transferring U.S. dollars. As of November 2024, 28.5 million unique stablecoin users conducted over 600 million transactions globally. These users turn to stablecoins for their secure, low-cost, and inflation-resistant savings and spending capabilities.

Unlike cash or gold, stablecoins operate without intermediaries like banks or payment networks and are widely adopted as a payment method. Moreover, stablecoins are permissionlessly programmable, extensible, and integrable, allowing anyone to build on stablecoin payment rails.

While the disruption of stablecoins may take time, it could happen faster than anticipated. Restaurants, retailers, enterprises, and payment service providers stand to benefit the most, with significantly higher profit margins driving large-scale adoption. As adoption rates grow, stablecoins are expected to bring more users, businesses, and products on-chain.

4.2 Overview of the Payment Industry

Key Participants in Payments:

1. Payment Rails: The technology, rules, and networks that process transactions.
2. Payment Processors: Entities operating on payment rails to facilitate transactions.
3. Payment Service Providers: Entities granting access to payment systems for end users or other systems.
4. Payment Solutions: Product offerings by payment service providers.
5. Payment Platforms: Integrated solutions spanning providers, processors, and rails.

The scale of the traditional payment industry is immense. In 2023, the global payment industry processed 3.4 trillion transactions worth $180 trillion, generating $2.4 trillion in revenue. In the U.S. alone, credit card payments amounted to $5.6 trillion, while debit card payments totaled $4.4 trillion.

Despite its ubiquity and scale, the payment industry remains costly and complex. Payment applications often obscure the intricate backend operations from consumers. For instance, while peer-to-peer payment apps like Venmo appear simple on the front end, they mask layers of complex banking integrations, debit card rules, and compliance obligations on the backend. Interdependence between various payment solutions further adds to the complexity of payment workflows. Still, traditional payment methods—including cash, debit cards, credit cards, peer-to-peer apps, ACH transfers, and checks—remain widely used.

Key Metrics for Payment Products:

1. Timeliness: Speed of transaction completion.
2. Cost: Expenses associated with the payment process.
3. Reliability: Consistency and accuracy of transactions.
4. Convenience: Ease of use for consumers and businesses.

Stablecoins are well-positioned to address these metrics more effectively than traditional payment methods, paving the way for a more efficient and inclusive financial ecosystem.

(How Stablecoins Will Eat Payments, and What Happens Next, a16z)

Consumers primarily care about one thing: How much does this cost me to pay? Merchants, on the other hand, focus on Will I get paid? However, all four key metrics—timeliness, cost, reliability, and convenience—are crucial to both parties.

From manual reconciliation on physical ledgers to the emergence of digital platforms, each wave of innovation has introduced faster, more reliable, more convenient, and cheaper payment solutions. Paradoxically, these advancements often increase transaction costs.

Today, many customers still lack access to convenient or adequately supported payment services. For merchants, credit card fees are prohibitively expensive, eating directly into their profits. Despite the growing adoption of real-time payment (RTP) systems, U.S. bank transfers remain painfully slow, often taking days to settle. Moreover, peer-to-peer payment apps are regional and network-specific, resulting in slow, costly, and complex transfers across ecosystems.

While businesses and consumers increasingly expect more sophisticated features from payment platforms, not all users benefit equally from current solutions. In fact, most users end up paying for bundled payment services they may not even need.

4.3 Practical Use Cases for Stablecoins

The transformative potential of stablecoins lies in addressing the pain points of existing payment systems—high costs, limited availability, and friction—while unbundling unnecessary features (such as identity verification, lending, compliance, fraud protection, and banking integrations).

Take remittances as an example—a critical need that remains largely unsatisfactory today. Many remittance users lack access to banking services, and banks themselves are highly fragmented. For these users, the inherent integration between traditional payment and banking services holds little value.

Stablecoin payments, by contrast, offer instant settlement, low costs, and a disintermediated process, making them immensely beneficial for all types of payment users and developers. For instance, sending $200 from the U.S. to Colombia with stablecoins costs less than $0.01, compared to $12.13 via traditional channels. Regardless of transaction costs, remittance users need to send money home; lower fees simply allow them to retain more of their earnings.

In international business payments, particularly among small businesses in emerging markets, high fees, slow processing times, and limited banking access remain significant challenges. For example, payments between a Mexican apparel manufacturer and a Vietnamese textile supplier might involve four or more intermediaries—such as local banks, foreign exchange providers, correspondent banks (MXN-USD and USD-VND), and more. Each intermediary adds costs and introduces risks, including the potential for financial instability.

Fortunately, these transactions often occur between long-term business partners. Stablecoins allow Mexican payers and Vietnamese recipients to bypass the slow, bureaucratic, and expensive middlemen. Although they may initially need to experiment with finding reliable local on/off ramps and adapting their workflows to handle stablecoins, the benefits are clear: faster, cheaper transactions and greater control over payment processes.

（How stablecoins will eat payments, and what happens next, a16z）

Small-value transactions represent a significant potential use case for stablecoin payments, especially in low-fraud, face-to-face scenarios such as those at restaurants, coffee shops, or corner stores. These businesses typically operate on thin margins and are highly cost-sensitive. A $0.15 transaction fee for every payment can significantly impact their profitability.

When a customer spends $2 on a cup of coffee, only $1.70 to $1.80 reaches the coffee shop, with nearly 15% of the total going to credit card companies. These fees are merely to facilitate the transaction, serving the single purpose of providing payment convenience. Neither the consumer nor the business needs additional features to justify this cost: consumers don’t need fraud protection (they’re simply buying a cup of coffee) or loans (the coffee is just $2), and coffee shops have limited compliance or banking integration needs (many use basic restaurant management software or none at all). Consequently, if a cheaper, reliable alternative exists, these businesses are likely to adopt it.

（How stablecoins will eat payments, and what happens next, a16z）

4.4 Cheaper Payment Methods Can Dramatically Boost Profitability

The transaction fees imposed by current payment systems eat directly into the profits of most businesses. Lowering these fees can unlock substantial gains in profitability. The first domino has already fallen: Stripe announced that it will charge a 1.5% fee for stablecoin payments, 30% lower than its credit card processing fees. To further this initiative, Stripe recently acquired the stablecoin aggregation platform Bridge.xyz for approximately $1 billion.

Broader adoption of stablecoins could significantly enhance the profitability of businesses—not just small merchants like coffee shops and restaurants. Let’s analyze the potential impact on three publicly traded companies’ 2024 financial statements to estimate the profound effect of reducing payment fees to 0.1%. For simplicity, this assessment assumes a blended payment processing cost of 1.6% and minimal currency conversion costs.

• Walmart: With annual revenue of $648 billion, Walmart likely pays $10 billion in credit card fees, while its net profit is $15.5 billion. Eliminating payment fees could boost Walmart’s profitability by over 60%, translating to a significant increase in its valuation (other factors aside), solely from adopting cheaper payment methods.
• Chipotle: A fast-growing quick-service restaurant chain with annual revenue of $9.8 billion and $1.2 billion in profit, Chipotle incurs approximately $148 million in credit card fees annually. By reducing payment costs, Chipotle’s profitability could increase by 12%—a staggering figure unlikely to be matched elsewhere on its balance sheet.
• Kroger: As a national grocery chain with razor-thin profit margins, Kroger stands to benefit the most. Astonishingly, Kroger’s net income and payment processing costs are nearly equivalent. Like many grocery stores, Kroger’s profit margin is under 2%, lower than the fees it pays for credit card processing. Stablecoin payments could double Kroger’s profitability.

（How stablecoins will eat payments, and what happens next, a16z）

So, how will Walmart, Chipotle, and Kroger reduce transaction fees through stablecoins? First, consider an idealized scenario: consumers won’t immediately adopt stablecoins. Before stablecoins become sufficiently widespread, there will still be a significant amount of transaction fees. Second, both retailers and payment processors are opposed to high-fee payment solutions. Payment processors are also low-margin businesses, leaving most of their profits to credit card networks and issuing banks. When payment processors handle transactions, most of their fees are passed on to the payment networks. For example, when Stripe processes online retail checkout, they charge 2.9% plus $0.30 on the total transaction but pay over 70% of that fee to Visa and issuing banks.

As more and more payment processors like Block (formerly Square), Fiserv, Stripe, and Toast adopt stablecoins to improve profit margins, they will make it easier for more businesses to adopt stablecoins.

Stablecoin fees are very low, and there are no intermediary fees involved. This means that payment processors can earn a much higher profit margin on stablecoin transactions. Higher profit margins could encourage payment processors to support and promote the use of stablecoins by more businesses and in more scenarios. However, as payment processors start adopting stablecoins, it’s expected that stablecoin payment fees will decrease over time: Stripe’s 1.5% fee rate may further drop.

5. Next Steps: Promoting Widespread Consumer Adoption of Stablecoins

Today, stablecoins represent a new, permissionless way to store and spend money. Developers are already building solutions to transform stablecoin payment channels into stablecoin platforms. Like previous innovations, adoption will occur gradually, starting with niche consumer demand, followed by forward-thinking enterprises, until the platform matures enough to meet the needs of everyday users and cautious businesses. Three trends will drive more mainstream companies to adopt stablecoins.

5.1 Increased Backend Integration through Stablecoin Integration

Stablecoin integration, which involves monitoring, guiding, and integrating stablecoins, will soon be incorporated into payment processors like Stripe. These products enable businesses to process payments at much lower costs than current systems, without requiring significant process or engineering changes. Consumers may unwittingly end up with cheaper products and services, as costs related to invoices, payroll, and subscriptions will automatically decrease.

Many such stablecoin integration businesses have already started attracting customers who seek instant settlement, low-cost, and widely available B2B or B2C payments. By integrating stablecoins in the backend, businesses can benefit from the advantages of stablecoins without affecting the user experience, while the stablecoin adoption rate across industries continues to rise.

5.2 Improving User Onboarding and Enhancing Shared Incentives for Businesses

Stablecoin companies are becoming increasingly sophisticated in improving user onboarding and shared incentives to attract end users to the blockchain.

As the costs for currency acceptance channels become cheaper, faster, and more ubiquitous, users will find it easier to start using cryptocurrencies. At the same time, more consumer apps are supporting cryptocurrencies, allowing users to benefit from an expanded stablecoin ecosystem without having to adopt new apps. Popular apps such as Venmo, Apple Pay, PayPal, CashApp, Nubank, and Revolut allow their customers to use stablecoins. Moreover, businesses are more motivated to leverage these channels to integrate stablecoins and hold funds in stablecoin form.

Stablecoin issuers, such as Circle, PayPal, and Tether, are sharing profits with regular businesses in the same way that Visa shares profits with United and Chase to attract credit card users.

These partnerships create larger pools of assets, generating income for stablecoin issuers. This also benefits those businesses that successfully transition users from credit cards to stablecoins. These businesses can now gain a portion of the revenue from the funds circulating through their products—this business model has traditionally been available only to banks, fintech companies, and prepaid card issuers.

5.3 Increasing Regulatory Transparency and the Availability of Compliance Solutions

When businesses have confidence in the regulatory environment, they are more likely to adopt stablecoins. Although we have not yet seen comprehensive global regulation of stablecoins, many jurisdictions have already issued rules and guidelines for stablecoins, allowing businesses to begin building compliant and user-friendly business models.

For example, the European Union’s Markets in Crypto-Assets Regulation (MiCA) has established rules for stablecoin issuers, including prudential and conduct requirements. Since the stablecoin provisions came into effect earlier this year, this regulation has significantly changed the European stablecoin market.

While the U.S. currently lacks a stablecoin framework, policymakers from both parties are increasingly recognizing the need for effective stablecoin legislation. Such regulation needs to ensure that issuers fully back their tokens with high-quality assets, have their reserves audited by third parties, and take comprehensive measures to combat illegal financial activities. At the same time, legislation should preserve the ability for projects to build decentralized stablecoins, leveraging the advantages of decentralization to eliminate intermediaries and reduce user risk.

These regulatory efforts will encourage businesses across industries to consider shifting from traditional payment methods to stablecoin infrastructure. While compliance solutions are not the most exciting aspect, each stablecoin adopter helps demonstrate that, for traditional payment solutions, stablecoins represent a reliable, secure, regulated, and continually improving payment solution.

As stablecoins become more widely adopted, their network effects will continue to grow. Although stablecoins may still take years to become used at every retail point or replace bank accounts, as the number of stablecoin users grows, stablecoin-centered solutions will become more mainstream, attracting more consumers, businesses, and entrepreneurs.

5.4 The Ongoing Evolution of Stablecoin Payment Utility

Throughout the adoption process, stablecoin products themselves will continue to improve. The Web3 community is celebrating the adoption of stablecoins for good reason: due to years of infrastructure investment and on-chain applications, stablecoins are rising along the S-curve of value innovation. As infrastructure improves, on-chain applications expand, and on-chain networks grow, stablecoins will become more attractive to users. This will happen in two ways:

First, technological advancements in crypto infrastructure are making stablecoin payments under 1 cent possible. Future investments will continue to make transactions cheaper and faster. At the same time, stablecoin integration and improvements in user onboarding can only be realized through better wallets, cross-chain functionality, currency acceptance, developer experiences, and AMMs (Automated Market Makers).

This technological foundation provides increasing incentives for entrepreneurs to build stablecoins, offering better developer experiences, richer ecosystems, widespread applications, and the permissionless composability of on-chain money.

Second, stablecoins unlock new user scenarios through the permissionless composability of on-chain money. Traditional payments involve numerous intermediaries, forcing entrepreneurs to collaborate with intermediary networks, such as costly intermediaries in credit card transactions or international payments. But stablecoins, with self-custody and programmability, lower the threshold for creating new payment experiences and integrating value-added services.

Stablecoins are also composable, allowing users to benefit from increasingly powerful on-chain applications and intensifying competition. For example, stablecoin users have already benefited from DeFi (Decentralized Finance), on-chain subscriptions, and social applications.

（How stablecoins will eat payments, and what happens next, a16z）

6. What Will the Future Stablecoin Market Look Like?

6.1 More Stablecoin Issuers

Currently, the stablecoin market operates around one or two major issuers. However, from the perspective of traditional payments, the future stablecoin market may consist of many smaller, interoperable stablecoins. These stablecoins would serve as new pathways for fund transfers, building on their existing channels.

As a result, we see many established players in the traditional payment space striving to adopt or at least test stablecoins within their current traditional payment paths. These players include financial infrastructure providers (e.g., DTCC, Euroclear), central clearing houses (e.g., banking financial institutions), large credit card networks (e.g., Visa, Mastercard), and mobile payment systems (e.g., PayPal, Stripe, Revolut).

Although these existing players enjoy significant advantages, such as channels, liquidity, and network effects, ultimately, Coinbase believes the market could evolve towards a model with many interoperable stablecoins. This is similar to how consumers today consider US dollars held in different commercial banks as interchangeable.

An article in the Harvard Business Review in August 2024, titled The Race to Dominate Stablecoin, suggests that this outcome could benefit consumers and businesses by promoting lower-cost and faster payments.

6.2 Stablecoin Orchestration

As the number of stablecoin issuers increases, how different stablecoins will interact becomes an important question. This brings us to another market beyond stablecoin issuance and application—stablecoin orchestration.

（What Credit Card Networks Can Teach Us About Stablecoin Opportunities）

Alana In her article,An analogy was made between the credit card market and the stablecoin market.. Let’s first look at a scenario where a user performs e-commerce shopping and pays RMB to a merchant in the United States through a credit card. HereVisa/Mastercard Between the card-issuing bank and the acquiring bank, the clearing and settlement of RMB to US dollars is done.

So assuming a scenario where stablecoins are used to pay, the user paysAUSD, and what U.S. merchants need isFUSD, here we need a similarVisa/Mastercard Stablecoin orchestrator willAUSD converted toFUSD, plays a role in a chainVisa/Mastercard role.

Through the above analogy, we can foresee the important role of stablecoin orchestration in the future, which is enough toStripe 11 US$100 million acquisitionBridge verified in the transaction.

Moving money is big business. Visa, Mastercard, American Express and Discover are worth over $1 trillion. multiple cardsorganizenetworkbetween each otherinhealthy competitionofequilibrium state，because of paymentThe market is big enough.As stablecoin issuers continue to emerge, the role of stablecoin orchestration will be further reflected.

（The largest merger and acquisition in the industry,Stripe 11 US$100 million acquisitionBridge the underlying logic of）

6.3 Deep Integration into Existing Payment Channels and Networks

The key to stablecoin issuers lies in integrating into existing payment networks and use cases, thereby minimizing friction in the currency acceptance process and increasing the stickiness of these use cases. With the advancements in technology, merchants and users can more easily adopt new payment methods, and existing Web 2.0 enterprises can more readily embrace the conveniences brought by fintech innovations. The integration of stablecoins into existing payment systems is an example of how cryptocurrency is becoming increasingly applied in the real economy.

If the goal is to achieve widespread adoption of cryptocurrencies through payments, integration with existing payment channels is paramount.

PlatON’s founder, Sun Liling, believes: “The biggest market opportunity in the current and next phase is the full migration of Web 2.0 core teams and applications to Web 3.0, much like how internet-based Web applications migrated to mobile internet apps ten years ago. Due to limitations in technology and infrastructure, most of the core applications from the Web 2.0 era cannot be fully migrated onto the blockchain directly. Instead, they will use crypto technologies and incentive mechanisms to manage services such as asset/financial payments, clearing, transactions, custody, and verification through public chains and their ecosystems.

Thus, the core demand is for fiat entry and exit, as well as digital currency payment/transfer. This means that the upcoming competition among public chains will not primarily come from native on-chain scenarios, but from the migration of transactions and user adoption from the traditional internet. The only way non-Web 3.0 native users will enter is through familiar applications/services, and it is likely to be through B2B2C channels.”

Faced with a more diversified stablecoin landscape, the current two dominant stablecoins, USDT and USDC, may need to adjust their products and improve user experience to maintain their competitive edge against emerging participants.

6.4 Parallel Tracks for Payments

While we expect blockchain-based stablecoin payments to fully replace the existing SWIFT network and Visa/Mastercard card networks, change in the financial payment industry is not an overnight process. As KUN CEO Liu Jialiang of the global digital payment provider KUN stated, “Currently, Web 3.0 payments can only be seen as a supplement to traditional payment channels. The key is to use innovative technology to integrate various payment channels to bring the maximum value to customers.”

Blockchain provides the technological foundation for value exchange by unifying the flow of information and funds. However, as the crypto market has developed, blockchain-based payment architectures are still in the early stages proposed by Bitcoin’s whitepaper, which primarily focuses on peer-to-peer transactions as the core clearing rule. A full suite of payment and clearing standards to handle complex payment scenarios with multiple participants has not yet been established.

PlatON founder Sun Liling observed: “Currently, there are three parallel payment clearing segments:

1. Web 2.0: A large number of transactions use stablecoins as a settlement tool but do not rely on the blockchain, and certainly not on any specific blockchain. Customers care about transaction costs, channel stability, and security. Payment is mainly done through Ethereum and Tron, with matching acquiring systems, which may have evolved from traditional acquiring services, but are not the same.
2. Web 2.5: Stablecoins are issued on a specific blockchain, with all payment business logic implemented via smart contracts. However, they must align with the business rules and protocol standards of traditional payment institutions/banks/settlement networks. Payment service providers with VASP/DPT licenses still rely on traditional global payment clearing networks as the backbone.
3. Web 3.0: Payments, clearing, and settlement are fully achieved on-chain using blockchain and cryptographic technologies such as ZKPs, all through smart contracts. This mode, or the payment products developed from it, represent true Web 3.0 Payments. It completely breaks the limitations of existing payment clearing networks, allowing any transaction counterpart to complete transactions on the blockchain without requiring third-party validation.

For a considerable amount of time, these three models will operate in parallel, depending on the different user and scenario needs.”

（Find the nextXRP, readPlatopayment pattern）

6.4 PayFi—Using DeFi to Enhance Payment Utility

PayFi, or Payment Finance, refers to an innovative application model that combines payment functions with financial services, based on blockchain and smart contract technologies. The core of PayFi is to use blockchain as the settlement layer, combining the advantages of Web3 payments and decentralized finance (DeFi) to facilitate the efficient and free flow of value.

The goal of PayFi is to realize the vision of the Bitcoin whitepaper—creating a peer-to-peer electronic cash payment network without the need for trusted third parties. At the same time, it fully leverages the advantages of DeFi to create an entirely new financial market. This market includes providing new financial experiences, building more complex financial products, and creating new application scenarios, ultimately integrating a completely new value chain.

In this brand-new PayFi financial market, it is not only possible to achieve efficiency improvements for Web3 payments compared to traditional finance—such as real-time settlement, cost reduction, transparency, and global reach—but it will also enable decentralized, permissionless access, asset ownership, and individual sovereignty, all based on decentralized finance (DeFi).

（X: PolyFlow @Polyflow_PayFi）

PayFi is the further construction, expansion, and deepening of a stablecoin-based Web3 payment network. On this foundation, it uses blockchain and smart contract technologies, while introducing DeFi (e.g., Lending, Staking, Yield Farming) to build an entirely new financial market. This market will create global, payment-related financial derivative services, such as lending, wealth management, investment, etc.

The most important aspect of PayFi is the need for a large Web3 payment ecosystem first. On this foundation of Web3 payments, further financial service utilities are brought in through DeFi based on customer scenario needs. From this perspective, PayFi still has quite a long way to go.

7. Final Thoughts

Stablecoins are leading us into a world of permissionless, scalable, and instant payments. As Stripe CEO Patrick Collison put it, stablecoins are the “room-temperature superconductors of financial services.” They will enable businesses to seek new opportunities that would not be possible in traditional payment systems with significant friction costs. Lily Liu, the president of the Solana Foundation, expresses a similar view regarding PayFi.

The development and integration of traditional payments, stablecoins, and Web3 payments lay the foundation for the broader use of stablecoins in cross-border fund transfers, digital capital markets, and financial services for the unbanked or underbanked populations.

With the growth of stablecoins potentially remaining around $500 million per day (based on November data), the more convenient, cheaper, and accessible payment methods brought by stablecoins, along with the heavy payment utilities enabled through DeFi, are expected to drive a large capital influx back into the crypto space. However, to fully realize the potential of stablecoins, it is essential to abstract some of the technical complexities of blockchain and establish clearer regulatory frameworks to ensure consumer protection and promote broader financial inclusion.

With the implementation of initiatives like these, this sector is ready for transformation.

This article is for learning and reference purposes only. It is not legal or investment advice. “Not your lawyer,” DYOR (Do Your Own Research).

Reference:

[1] How stablecoins will eat payments, and what happens next, a16z
https://a16zcrypto.com/posts/article/how-stablecoins-will-eat-payments/

[2] a16z Podcast: All about Stablecoins
https://a16z.com/podcast/a16z-podcast-all-about-stablecoins/

[3] A few of the things we’re excited about in crypto (2025), a16z
https://a16zcrypto.com/posts/article/big-ideas-crypto-2025/

[4] YC Requests for Startups, Winter 2025
https://www.ycombinator.com/rfs

[5] 10 top payments trends for 2025 — and beyond, Mastercard
https://newsroom.mastercard.com/news/perspectives/2024/10-top-payments-trends-for-2025-and-beyond/

[6] State of Crypto Report 2024: New data on swing states, stablecoins, AI, builder energy, and more
https://a16zcrypto.com/posts/article/state-of-crypto-report-2024/

[7] 2025 Crypto Market Outlook, Coinbase
https://www.coinbase.com/institutional/research-insights/research/market-intelligence/2025-crypto-market-outlook

[8] Three parallel payment settlement segments, PlatON
https://x.com/SunLilin/status/1870667540378382424

[9] What Credit Card Networks Can Teach Us About Stablecoin Opportunities
https://www.backoftheenvelope.xyz/p/what-credit-card-networks-can-teach

[10] Mapping Out Crypto Payment’s Ecosystem, the Block Research

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