Stablecoins have dominated the conversation this year, but as their popularity surges, there is a growing need for traditional players to either slow the pace of new launches or develop differentiated use cases that offer clearer value to everyday consumers.
Walking in and out of payments events this year, one theme has been impossible to ignore, and that is that stablecoins have arrived.
Crypto’s “steady” cousin has captured the attention of traditional finance with the same intensity as tokenisation, and it’s been encouraging to see established players take the space seriously.
But over the past few weeks, I can’t shake the feeling that we’re already heading toward stablecoin fatigue before the sector has even taken off.
Klarna unveiled plans for a native USD stablecoin next year, and Sony followed with its own intentions days later. And honestly, the immediate question that comes to mind is: what’s the point?
Klarna offered no real detail on functionality or use cases – not in the press release, nor in CEO Sebastian Siemiatkowski’s comments. Sony at least has the defence of not having formally announced anything yet, but it is clear everyone wants in, even if the purpose isn’t.
Meanwhile, stablecoins are only just beginning to enter the consciousness of traditional finance. Before they can deliver on promises of instant, low-cost cross-border settlement, many new entrants face a fundamental challenge; they don’t yet know what problem their stablecoin is supposed to solve.
We are in danger of oversaturation already
There are currently more than 250 stablecoins in circulation and the total stablecoin market capitalisation stands at $316bn, with projections to significantly increase to $1.9 trillion according to Citi’s ‘Stablecoins 2030’ report.
This accelerating market has already captured the imagination of TradFi companies such as PayPal, who became the first financial service company to launch a native stablecoin in August 2023 and has quickly become the fifth most valuable stablecoin in market cap.
But we’re only scratching the surface here. The Wall Street Journal believes Amazon is intending to launch a native stablecoin, as well as Walmart, Revolut, and a joint venture between US banks – Bank of America, Citi, Wells Fargo and JP Morgan – is already underway.
You can see the market becoming quickly bloated in such a short space of time, which will no doubt cause headaches for merchants and businesses once stablecoin payments become a popular currency amongst consumers.
How will small businesses know the difference between USDT and Fiserv’s USD-backed stablecoin, or whether to offer Klarna’s stablecoin at the checkout to customers or PYUSD?
The interest from large scale banks, while encouraging, is also causing a short term hindrance to the growth of stablecoins if the goal is to break through to the mainstream masses and place these digital currencies inside the digital pockets of customers.
Let stablecoins mature
Cast your mind back just three years ago and not many within the traditional finance would know where to start when it comes to handling stablecoins.
The influx of pilot programmes and use cases being spawned out of these launches, such as Visa enabling USD stablecoin payouts to the gig economy via Visa Direct, demonstrates the successful call to action some major players have taken to stablecoins in their bid to unearth genuine benefits.
What is getting lost in the stablecoin sauce, for the lack of a better word, is why so many entities want to launch a stablecoin when there are so many that function in the same manner.
Your business wants a quick and reliable way to settle USD stablecoins, choose PYUSD. If your business wants a regulated stablecoin that enters markets regulatory-first, choose USDC. If your business wants a stablecoin that can be leveraged for greater liquidity, choose USDT.
Now, if the joint venture between the four US banks can create new, unforeseen use cases for stablecoins, then that will of course not just become a benefit to businesses intending to use the digital currency for the first time, but for the market as a whole.
If Klarna’s proposed stablecoin can help create further flexibility at the online checkout or if Fiserv’s USD digital currency can find new ways to move faster from one bank account to another, these are no doubt positives for the adoption of stablecoins by the general masses.
But unfortunately, we do not have the use cases available for these proposed stablecoins yet, which is why we need to lean on the industry leaders to provide the blueprint for best practices.
Allow the leaders to create the use cases
As previously mentioned, Visa, as well as Mastercard, have been developing cross-border stablecoin pilot programmes for several years now, attempting to find answers to the questions surrounding faster settlement times, cheaper remittance fees and interoperability with fiat currencies.
Over time, we can hope to see the harmonisation between stablecoin-enabled payment rails alongside traditional payment rails, which is something Stripe is heavily exploring alongside its stablecoin payment and infrastructure subsidiary, Bridge.
On the regulatory front, US representatives from the Federal Reserve and other agencies are aiming to expand the recently passed GENIUS Act to include certain provisions to enable both traditional and modern digital banks to enable stablecoin transactions across the whole ecosystem.
I am far less qualified to tell traditional firms to learn from what has been laid out in terms of stablecoin development over the past year. Banks such as JP Morgan have already worked alongside the likes of Mastercard and Circle to develop stablecoin use cases.
Yes, 2025 was the year for stablecoins, but let’s make sure 2026 is the year of stablecoin development, which should encompass more new findings and use cases unearthed, and a desire to make stablecoins more aware to consumers for greater mass adoption.
