Institutional adoption of stablecoins has reached an all-time high, supported by technical readiness, declining regulatory friction, and intensifying demand for faster, cross-border settlement infrastructure. 

According to a recent report from Fireblocks, 86% of surveyed firms say they now have the partnerships and systems in place to support stablecoin integration, signaling a decisive shift from pilot testing to scaled implementation.

Nearly half (49%) of institutions actively use stablecoins for payments, while another 23% are conducting pilots and 18% are preparing for implementation. Only 10% remain undecided, indicating widespread movement toward adoption across financial institutions, payment providers, and banks.

Barriers melting away

Barriers to adoption have declined sharply since 2023, indicating rising confidence in the sector.

Only 18% of respondents now cite compliance as a concern, down from 74%, while regulatory uncertainty dropped from 85% to 25%. Similarly, internal capability concerns, such as a lack of technical expertise, fell from 41% to 14%.

The report attributed the decline to clearer national regulations, improved anti-money laundering and KYC frameworks, and international alignment on policy standards. 

The report highlighted that 64% of firms believe that standardized best practices have materially improved their stance on stablecoin use, while 60% point to global regulatory harmonization, and 56% highlight enhanced compliance tooling.

75% of respondents also report clear customer demand for stablecoin-based products, reinforcing the shift from experimentation to product deployment. 

Additionally, banks and payment processors now see stablecoins not as a speculative technology but as strategic infrastructure to recapture market share, especially in cross-border flows.

Adoption drivers

The focus of institutional adoption has moved from proof-of-concept pilots to enterprise-grade execution. Infrastructure performance, especially in compliance automation, liquidity access, and transaction handling, has become a differentiator. 

For 41% of respondents, fast and reliable payouts are the top infrastructure requirement, followed by regulatory transparency (34%), efficient fiat-crypto bridges (31%), and liquidity depth (27%).

Security remains a non-negotiable requirement as firms prepare for higher throughput and tighter regulatory scrutiny. 36% of respondents flagged stronger fraud protection as an adoption driver, while 31% already cite enhanced security as one of stablecoins’ leading benefits.

The report said that the focus on scale and control reflects a broader market shift away from “crypto-remote” models, which involve external management of digital assets, toward full-stack integration within treasury, risk, and compliance systems.

Fireblocks found that the key drivers of stablecoin adoption have evolved beyond traditional efficiency-related reasons and now include revenue expansion, market entry, and customer demand as leading motivations.

Around 40% of respondents said stablecoins support entry into new markets, while 38% pointed to customer demand, and 37% cited new revenue opportunities. Firms increasingly view stablecoins as growth infrastructure rather than just a tool for improving costs and operational efficiency, which still matter.

Industry participants are now making ecosystem-level decisions about which networks and infrastructure providers to partner with, signaling that stablecoins are no longer on the periphery of institutional finance but are entering its operational core.

Cross-border transactions dominate demand

Institutions are increasingly positioning stablecoins as tools to modernize global financial infrastructure, evident by the total stablecoin market cap recently reaching nearly $238 billion.

Traditional domestic payment systems have made strides toward real-time processing, but international transfers remain hampered by legacy correspondent banking networks that introduce delays, lack transparency, and carry high FX costs.

According to the report, 58% of traditional banks said cross-border payments were the primary use case for stablecoins, double the share citing any other category. Other prominent use cases included payment acceptance (28%), treasury optimization (12%), merchant settlement (9%), and B2B invoicing (9%). 

In high-volume, low-margin environments such as trade corridors in Latin America and Africa, core operations such as treasury and enterprise resource planning systems are integrating stablecoin rails.

Institutions also place a lot of emphasis on speed, with 48% of respondents citing faster settlement as the most valuable stablecoin feature, well ahead of liquidity optimization (33%), integrated payment flows (33%), and cost savings (30%). 

The report noted that respondents are 1.5x more likely to prioritize speed over cost, indicating a shift toward performance, control, and continuity in cross-border commerce.

Mentioned in this article

The competition for stablecoin dominance is entering a third phase and companies such as Tether, issuer of the largest token, and Circle, the No. 2, are setting up their positions as the industry faces increased regulation in the form of the European Union’s Markets in Crypto Assets (MiCA) regime and U.S. legislation that is working its way through Congress, according to digital asset cryptography and custody specialists Fireblocks.

This latest stage will feature banks, large and small, as well as incumbent payment firms that are weighing up the best way to integrate the tokens into their existing businesses, according to Ran Goldi, SVP of payments at Fireblocks.

Stablecoins, blockchain-based tokens that mimic U.S. dollars for the most part, have become big business. Tether’s USDT is the clear leader, with a market cap close to $145 billion. Circle’s USDC has over $60 billion in circulation and the company is considering a public listing on the New York Stock Exchange. The stablecoin market could grow to $2 trillion by the end of 2028, Standard Chartered said in a Tuesday note.

“We are going to see banks issuing stablecoins, as they are under MiCA,” Goldi said in an interview. “You are seeing financial institutions that are fintechs entering such as Robinhood, Ripple and Revolut. By the end of this year, you are going to see maybe 50 more stablecoins.”

The industry has already passed through two stages, Goldi said. The first occurred when USDC went up against U.S. regulated trading firm Paxos, which had partnered with crypto exchange Binance to issue BUSD. For regulatory reasons Paxos had to drop BUSD and so Circle won that round, Goldi said, adding that Paxos’ new USDG consortium is growing in stature and likely to play a major role in the future.

The second stage was between Circle and Tether.

“USDC was trying to be bigger than USDT, but then USDC tumbled a bit with the collapse of Silicon Valley Bank etc. It was harder for people to accept that product, especially people outside the U.S. Meanwhile USDT has really grown tremendously. I think USDT will remain the dominant dollar stablecoin outside of the U.S. I believe Circle will have to put up a really good fight, which they’ve done in the past and are very good at doing.”

It’s worth noting, though, that USDC is licensed under MiCA, giving it access to 27 EU nations with a total population of about 450 million people. USDT is not.

Growth in international payments

Stablecoins grew to prominence as an essential way of moving money between volatile cryptocurrencies, meeting a particular need given the industry’s shortage of fiat on and off ramps. Dollar-pegged coins of various sorts blossomed further with the explosion of decentralized finance (DeFi).

Looking further back, the early days of crypto show an evolution of payment service providers (PSPs), starting with those who wanted to use cryptocurrencies to settle their bills. This was followed by a second wave of business-to-business PSPs like Bridge, recently acquired by Stripe, and Zero Hash, Alfred Pay, Conduit and others.

“Some of these PSPs are firms you may not have heard much about, but they are actually moving billions in stablecoins, servicing businesses to pay to other businesses most of the time,” Goldi said. He pointed out that less than 20% of Fireblocks’ total transaction volume was stablecoins in 2020, increasing to some 54% last year.

For a typical use case, consider an importer in Brazil that wants to bring in a container and pay someone in Turkey or in Singapore. It takes the Brazilian reals, converts them to a stablecoin, and either sends the funds directly to the exporter or changes them to the destination currency and pays with that, Goldi said.

Some banks have already caught on to the cross-border payments use case, with the likes of Braza Bank in Brazil, BTG Bank and DBS in Singapore catering to business clients with accounts that support stablecoins. Others are still weighing the best use case for them.

“We have been approached by dozens of banks,” Goldi said. “They are asking whether they should be on/off ramps, or holding reserves, or perhaps they are thinking about issuing a stablecoin. There are several things banks can do to make money out of stablecoins, from credit to on/off ramps to FX.”

Based on those conversations, Goldi said he believes most of the banks are writing strategic plans that will probably be submitted by the end of this quarter.

“It will be interesting to see if banks build something on their own, or use BNY Mellon, for instance, that serves banks, or a vendor like Fireblocks. I think the large tier-1 banks like JPMorgan, Citi and Morgan Stanley will build their own tech, while the tier-2 banks will want to use some hosted tech provider,” Goldi said. “Of course they are banks and they move slowly, so I think they would be looking to approve those plans by the end of this year and perhaps do something in 2026.