Stablecoins are moving from the industry’s favourite buzzword into a genuine financial instrument used for real-world transactions in a bid to make payments more instantaneous
Stablecoins are digital currencies backed 1:1 with a fiat currency in order to maintain its value. For every stablecoin issued, the holder/company holds an equivalent amount in fiat reserves to ensure collateralisation and capital.
The stablecoin tokens themselves have no physical form, they are minted and managed via smart contracts and computer programs, while the fiat reserves backing them are held by the issuer in cash and short-term assets.
As cryptocurrencies such as Bitcoin were originally intended to become an instant, peer-to-peer (P2P) payment facilitator without the need for intermediaries, they quickly became an investment vehicle which then opened the doors for stablecoins to become decentralised finance’s (DeFi) preferred payment currency.
Some of the earliest stablecoin use cases date back to 2014 when crypto traders migrated to stablecoins such as BitUSD and USDT to move funds into these digital currencies when the crypto market began to become more volatile.
As more use cases began to develop within the DeFi sector, such as stablecoins being used for capital transfers to mitigate the effects of market volatility, their prominence began to catch the attention of the traditional finance space.
Fast-forward to 2026, and some of the largest companies in the world, such as Visa, Mastercard and Stripe, have embraced stablecoins and invested significantly in order to launch pilots, develop use cases and make stablecoins a core part of their future strategies.
Payment Expert breaks down the stablecoins that are currently having the most profound effect on the traditional finance industry, the payments use cases they have developed, the regulatory ambiguity they hold and their role in the future of digital finance.
USDT by Tether
The Tether issued USDT stablecoin is by far the largest stablecoin in the world per market capitalisation. The US dollar-backed stablecoin has a market cap of $184bn at the time of writing according to Coinmarketcap, a $111bn difference between itself and USDC in second ($73bn).
USDT has the advantage over a majority of current stablecoins by being one of the first to launch to market in 2014. It was primarily used for capital management by crypto investors to store funds before and during market volatility.
In the present day, USDT is still primarily used as an investment financial instrument due to its deep liquidity as it enables investors to hold significant amounts at any time given.
While initially a crypto trader’s preferred stablecoin, investors have emerged outside the DeFi space. In Argentina particularly, USDT has been used as a hedge against inflation as the Argentine Peso rapidly devalued, prompting the population to shift to the stablecoin to preserve the value of their money.
USDT is also widely available amongst some of the largest blockchain networks, such as the Bitcoin network, Ethereum, TRON, and Solana.
Tether has also positioned USDT as one of the industry’s most popular stablecoins for payments, particularly for cross-border remittances and to settle international invoices. Global money wires can be sent within seconds and removes the multi-day settlement times and holding fees typically associated with networks such as SWIFT.
Similar to being used as a hedge against inflation, USDT is a primary avenue for international users and companies to hold the US Dollar for trade and capital management.
However, despite being the world’s largest stablecoin, it will not be available in Europe after Tether opted not to comply with the Markets in Crypto Assets (MiCA) framework.
USDT is neither regulated nor available in the US, but Tether launched a dedicated regulatory compliant stablecoin in 2026 with USAT.
USDC by Circle
While being a far distant second in market cap behind USDT, Circle’s USDC has instead focused its adoption strategy around payments and regulation.
Launched in 2018 by Circle and Coinbase, USDC was primarily intended to become a cross-border, business-to-business payment instrument to help speed up international transactions and reduce costs.
Some of the largest adopters of USDC for payments use cases have been Visa and Worldpay. These companies have used USDC to support merchant transactions, enabling them to settle and convert USDC into their preferred fiat currencies.
Similar to Visa and Worldpay, Stripe and Shopify have used USDC to test e-commerce checkout settlement capabilities with its range of clients by embedding the stablecoin as a payment method.
Mastercard has been building its stablecoin payment infrastructure by allowing partners to make payments 24/7 on weekends and holidays. The Mastercard Crypto Card Program provides a bridge between fiat and digital currencies, allowing users to make payments with stablecoins via physical and virtual cards at point of sale.
Beyond its payment strategy, Circle has embarked on a regulatory path designed deliberately to make USDC the most regulatory compliant stablecoin in the world.
USDC became the first stablecoin to become compliant with the MiCA framework. Circle also received final clearance from the Office of the Comptroller of the Currency (OCC) in the US on 10 July 2026 to establish a national trust bank (Circle National Trust), bringing its USDC custody operations under the direct federal oversight of the OCC.
Circle also holds regulatory licences in the United Kingdom, Singapore and the United Arab Emirates to offer USDC as a digital payment method.
PYUSD by PayPal
In August 2023, PayPal became the first major mainstream payments company to issue its own stablecoin with PYUSD.
PYUSD was initially used mainly to be exchanged for its fiat counterpart, the US dollar, and for compatibility with external PayPal wallets, as a vehicle for person-to-person transactions and to fund purchases.
As PayPal is one of the most popular retail payment methods among consumers, PYUSD has the potential to drive consumer adoption of stablecoin payments by making it widely available across its digital wallets.
Crypto payment apps like Oobit have adopted PYUSD to become available for its users to make regular retail payments at the point-of-sale where Visa is accepted online.
PYUSD has been used by firms such as SAP to process and settle corporate invoices. PayPal has used the stablecoin to pay EY a vendor invoice to test the speed and cost effectiveness in comparison to traditional wire payments.
There are also companies using PYUSD to settle cross-border commerce, such as Zoom. The video call company has used the stablecoin to mitigate multi-day holding times.
The best of the rest
World Liberty Financial, a DeFi company that is financially backed by members of the Trump Family, issued its USD1 stablecoin in March 2025 to help settle transactions for spot and futures trading markets.
USD1 has also been used to automate contractor payments and payroll processing, used in lending markets to promote high-yield returns, and cross-border commerce for online checkouts.
While US dollar stablecoins dominate the global market by 99%, Europe has routinely questioned whether adoption of the likes of USDT and USDC will threaten the sovereignty of the Euro and cause digital dollarisation.
Qivalis, a consortium made up of more than 35 European banks across 15 countries (as of May 2026), is planning on launching a euro-denominated stablecoin designed to reduce the adoption of dollar stablecoins and promote a digital euro currency that is intended to be MiCA-regulated and for broad international usage across the ecosystem.
The stablecoin is intended to be issued in the second half of 2026.
Open Standard is a consortium made up of 140 major companies, which has launched the latest US dollar-backed stablecoin: OpenUSD.
The stablecoin is not issued by a sole entity, rather, an open sourced, co-managed stablecoin that will be governed by its coalition members. Some of the members include Visa, Mastercard, Stripe, BlackRock, Standard Chartered, Coinbase, Ripple, OKX, Google and Samsung.
Used to serve global money movement and address current stablecoin payment friction, OpenUSD will be initially issued on the Solana blockchain, as well as the Plasma and Tempo networks.
The stablecoin is designed with three key principles. Businesses can mint and redeem OpenUSD with no cost on volumes, partners can receive all earnings on reserves, and operate via all Open Standard partners to ensure decisions are made with the collective interests of everybody.
OpenUSD is set to become a challenger to the market cap dominance of USDT and USDC due to the backing it has from some of the largest companies in the world.
