Stablecoins have been positioned as the next evolution of digital payments. But beneath the hype, industry voices are converging on a different reality – one where stablecoins may never be a consumer product at all.
A freelancer in Pakistan receives a payment from a client in London. The funds arrive quickly, in a currency which holds its value. Somewhere in the process, money has moved across borders, liquidity has been sourced, and settlement has taken place. The recipient does not think about the rails; they do not ask whether the payment moved via SWIFT, Faster Payments, or something newer.
They care that it arrived, that it was fast, and that the value was preserved.
For decades, payments innovation has followed this pattern and the most successful systems have turned out to be the ones that are not the most visible, but the least. Contactless cards, real-time payments, and digital wallets have all followed the same shift from hyped-up novelty to background infrastructure.
Stablecoins may be heading in the same direction. But for all the attention stablecoins receive, there is little consensus that they solve a meaningful problem for everyday users in developed markets.
“I don’t think there is a use case for a consumer to go to a supermarket and pay by stablecoin,” Julia Demidova, Senior Director, Digital Assets Product & Strategy at FIS, tells Payment Expert.
In markets such as the UK, payment systems are already fast, reliable, and widely trusted. Real-time bank transfers are commonplace, card acceptance is near universal, and failure rates are low. Against this backdrop, stablecoins struggle to offer a clear improvement at the point of sale (POS). This disconnect is not lost on those building within the system.
“Will people even know stablecoins are being used in their transactions, is the big question,” Noyan Nihat, Co-CEO of Cardaq tells Payment Expert. His point reinforces the reality where consumers rarely engage with the mechanics of payments unless something goes wrong.
This view is echoed by those operating at the centre of the UK’s retail infrastructure. Justin Jacobs, Chief Policy and Engagement Officer at Pay.UK, notes most users are not choosing between rails at all.
“What you want to know is, what are my options in terms of speed and cost? And you can set those parameters. And then you want a system that routes it through whatever is the most effective way to deliver that.”
Stablecoins, therefore, are unlikely to succeed as a consumer-facing payment method, but could their relevance lie elsewhere?
Behind the scenes, not at the checkout
If stablecoins are not designed for the checkout, they are increasingly being positioned as part of the infrastructure which sits behind it. Payments are moving towards what policymakers and industry bodies have begun to describe as a ‘multi-money’ environment – one in which different forms of value coexist. Traditional bank deposits, tokenised deposits, central bank digital currencies, and stablecoins are all being explored in parallel.
In this context, stablecoins are not competing to replace existing systems, but to integrate with them.“They’re going to be another channel of payments,” Nihat says. “All of it will exist, because people will want the choice.”
That choice, however, may not sit with the end user. Instead, it will be embedded within systems which determine how a payment is routed based on cost, speed, and availability. For infrastructure providers, this is already becoming a reality.
Visa has been piloting the settlement of transactions in USDC, allowing issuers and acquirers to settle obligations on-chain rather than through traditional correspondent banking flows. Meanwhile, Mastercard has been developing its Multi-Token Network, designed to connect commercial bank deposits, tokenised assets, and digital currencies within a single framework.
Banks are also testing how these layers integrate into existing systems. Institutions such as JPMorgan Chase have already launched blockchain-based payment rails (JPM Coin), while European banks involved in tokenised deposit initiatives are exploring how to route payments across multiple forms of money without requiring customers to choose between them.
Where stablecoins do make sense
While the consumer use case remains limited, there is far greater alignment on where stablecoins deliver value, particularly in cross-border payments. According to data from the World Bank, global average costs of sending remittances remain above 6%, with settlement times that can stretch into days depending on the corridor. These inefficiencies are most pronounced in emerging markets and high-friction payment routes.
“Anybody who’s tried to send money abroad is facing not only high fees, but also quite long settlement,” says Perry Scott, Senior Policy & Government Affairs Manager at Kraken. Stablecoins, he argues, can move the same value “at a fraction of the time and fractional cost”.
The scale of the opportunity extends beyond consumer remittances. Institutional flows account for the majority of cross-border payments, with trillions of dollars moving daily between businesses, banks, and financial institutions. For these participants, the benefits are not only about speed, but capital efficiency.
“You look at the inefficiencies in the system, particularly around pre-funding of accounts, trapped capital and slow settlement times,” Scott adds. “That capital could be freed up to spend on other things throughout the real economy.”
Practical applications are also already emerging. Andrew Stewart, Chief Revenue Officer at Thunes, points to demand from freelancers and SMEs in markets with volatile currencies. A contractor in Asia, for example, may prefer to receive payment in a USD-backed stablecoin rather than local currency. “They don’t want to be paid in local [currency] because it’s too volatile… and they can’t open up a dollar account,” Stewart explains.
In these cases, stablecoins are filling gaps where traditional infrastructure falls short.
The cost of building something invisible
Even in these more defined use cases, adoption is far from straightforward. One of the most consistent themes across discussions recently has been the cost and complexity of integrating stablecoin infrastructure into existing financial systems.
“Most of the banks… want to operate these new alternative payment methods from existing payment hubs and existing core banking systems,” Demidova says. “The cost of integration is very significant.”
Beyond technology, there are regulatory considerations. Stablecoins, particularly those fully backed by reserves, can introduce balance sheet constraints that differ from traditional deposits. “With stablecoins… it’s one-to-one backing,” Demidova notes. “Is that a good use of money for banks? Maybe not.”
This has contributed to a divergence in approach. While fintechs and crypto-native firms continue to develop stablecoin-based models, many banks are exploring alternatives such as tokenised deposits, which sit more comfortably within existing regulatory frameworks. At the same time, questions remain around interoperability. As new rails emerge, ensuring they can operate alongside legacy systems without introducing fragmentation becomes a central challenge.
“We have to make sure you don’t end up with a spaghetti of confusion,” says Paul Horlock, Chief Payment Officer at Santander UK.
Invisible, but not without risk
If stablecoins do become embedded within payment infrastructure, their impact will not be neutral. One concern raised is the potential concentration of power around a small number of dominant stablecoins, particularly those denominated in US dollars.
“It can’t just be USDC or one currency,” Nihat says. “I do not think that’s good for the planet.”
The issue touches on broader debates around monetary sovereignty and the role of national currencies in a digital economy. Policymakers in the UK and Europe have already signalled caution, with ongoing discussions around frameworks for stablecoin issuance and use.
There are also operational considerations. As payment ecosystems become more complex, fraud, compliance, and data-sharing challenges evolve alongside them. “The more complex we get, the more diverse, the bigger the gate [for criminal activity],” Nihat warns.
The move towards real-time, programmable payments (whether through stablecoins or other technologies) requires a shift in how risk is managed, from post-transaction monitoring to real-time controls embedded within infrastructure.
