Original Article Title: Stablecoins and the Future of Payments

Original Source: Grayscale Research

Original Translation: AIMan@, Golden Finance

Main Points of the Article:

● Stablecoins are digital tokens pegged to the US dollar and issued on the blockchain. Through this structure, tokenized digital dollars can leverage the functionalities of the blockchain, including borderless payments, nearly instant settlements, potential lower transaction costs, and high transparency.

● Stablecoins are ubiquitous in the cryptocurrency trading realm but are now also being used for traditional payments. Currently, the circulating supply of stablecoins is around $250 billion, with stablecoin issuers currently being the major holders of US treasuries. The blockchain processes over 100 million stablecoin transactions per month.

● While traditional payment systems are mostly very efficient, certain elements could be cheaper, faster, and/or offer more functionalities. Based on its comparative advantages, Grayscale Research expects stablecoins to make the most significant progress in the following areas: (1) cross-border payments; (2) domestic payments in credit card-dominated markets like the US; and (3) value transfers between AI agents.

● Stablecoins are a core use case of public blockchains, and the increasing adoption of stablecoins may in some way benefit nearly all aspects of the cryptocurrency asset class.

● In a specific blockchain context, Ethereum seems poised to benefit from the rising adoption of stablecoins as it already has the highest number of stablecoins and processes the most stablecoin transactions. This trend should extend to the Ethereum Layer 1 blockchain and its Layer 2 ecosystem. Other beneficiaries may include certain high-performance Layer 1 blockchains, relevant decentralized finance (DeFi) applications, and traditional financial service companies adopting stablecoin infrastructure.

● Grayscale Research believes that the passage of the “GENIUS Act” establishes a comprehensive regulatory framework for US stablecoins, which is a milestone for the cryptocurrency industry. The act aims to promote the integration of stablecoins into the US financial system while establishing safeguards to support financial stability, protect consumers, and curb illicit activities.

The efficiency of an economy's payment system benefits everyone, but fundamental change is hard to achieve. Payment systems are fundamentally networks composed of many participants, so reform efforts may face significant coordination challenges. Even seemingly obvious improvements – such as universal messaging standards and overlapping business hours among global banks – are hard to implement. Over the past five years, the Group of Twenty (G20) has been explicit about improving cross-border payments – particularly frustrating for users – but progress has been slow.

A stablecoin is an emerging innovation in the digital payment space based on blockchain technology. Like most crypto applications, the adoption of stablecoins is a grassroots phenomenon: a diverse set of users worldwide benefit from using stablecoins for transactions and/or storing value. The GENIUS Act, signed into law by President Trump on Friday, July 18, provides a comprehensive regulatory framework for US-backed payment stablecoins. This legislation, along with similar efforts in other countries, will enable stablecoins to further integrate into the traditional financial system while establishing appropriate safeguards for financial stability, consumer protection, and anti-illegal activities.

Grayscale Research believes that stablecoins can disrupt certain aspects of the global payment industry by offering lower costs, faster settlement times, and greater transparency. We anticipate that stablecoins will make the most significant progress in the following areas: (1) cross-border payments; (2) domestic payments in credit card-dominated markets like the United States; and (3) value transfers between AI agents. Stablecoins also serve as a means of holding digital value and may partially disintermediate commercial bank deposits. In the crypto ecosystem, the primary beneficiaries are likely to be stablecoin issuers and their distribution partners (earning net interest margin), as well as blockchain networks in the Ethereum ecosystem, certain other high-performance Layer 1s, and related decentralized finance (DeFi) applications like oracles and decentralized exchanges (DEX).

The Digital Dollar on the Blockchain

A stablecoin is a digital token pegged to the US dollar and issued on the blockchain. There are various types of stablecoins (as described below), but mainstream users may only interact with a specific type: fully collateralized, fiat-backed stablecoins. These instruments resemble government-only money market funds: they are tokens that stabilize the value of the US dollar, fully backed by treasury bills or similar collateral (Chart 1). The reason stablecoins can maintain their peg to the dollar is that stablecoin issuers are always prepared to redeem stablecoins at face value or issue more stablecoins in exchange for cash. This is a straightforward structure and not a particularly novel innovation on its own. However, when tokenized digital dollars are deployed on a public blockchain, they gain the functionalities of the blockchain, including borderless payments, near-instant settlement, potential low costs, and high transparency.

Chart 1: Regulated US-backed payment stablecoins will have a simple structure

Today, stablecoins are ubiquitous in cryptocurrency transactions. For example, stablecoins constitute 70%-80% of the trading volume of crypto tokens traded on centralized exchanges (CEX). Therefore, the growth of cryptocurrency trading volume is likely to lead to an increase in stablecoin balances and trading volume. Stablecoins are also a primary tool for users to access DeFi applications (like decentralized lending protocols). However, stablecoins are now also being used in traditional digital payments, especially in emerging market economies. This use case is unrelated to speculative crypto trading and may thus support sustainable growth for blockchain applications.

While issuers have created stablecoins for multiple currencies, nearly all of the $250 billion stablecoins in circulation are dollar-denominated. Two issuers dominate the dollar stablecoin market: Tether, the issuer of the USDT stablecoin, and Circle, the issuer of the USDC stablecoin (see Figure 2). Tether is registered offshore, with its USDT representing around 60% of the stablecoin total "market cap." Circle is registered in the United States, with its USDC representing around 25% of the stablecoin total market cap. Tether's reserve assets are currently major holders of U.S. Treasury securities: if it were a country, it would be the 18th largest foreign holder of U.S. Treasuries, behind Saudi Arabia and ahead of South Korea.

Figure 2: The Largest Stablecoins are USDT and USDC

Currently, there is no perfect measure of stablecoin trading volume, but an alliance of crypto data experts has partnered with Visa to create a widely used benchmark aimed at eliminating certain types of biases (such as high-frequency traders and bots). According to these estimates, users conducted over 120 million stablecoin transactions in June 2025 (see Figure 3). The total value transferred was around $800 billion, approaching $10 trillion on an annualized basis. In comparison, the Visa network processed around $13 trillion in payments in 2024. It should be noted that these transactions involve both crypto trading and payment use cases, and it is not possible to distinguish them based solely on on-chain data. Currently, the vast majority of stablecoin transactions may still be related to crypto trading (potentially up to 90%), rather than payments for goods and services.

Figure 3: Over 100 Million Stablecoin Transactions Monthly

Most smart contract platform blockchains use stablecoins, but the current leaders in this category are Ethereum and Tron (see Figure 4). Approximately half of the stablecoin balances are on Ethereum, including USDT and USDC; nearly all stablecoin balances on Tron are composed of USDT. So far this year, Ethereum and Tron have processed around $1.7 trillion in stablecoin transactions; most transactions on Tron use Tether's USDT stablecoin (>99%), while most transactions on Ethereum use Circle's USDC stablecoin (around 65%).

Figure 4: Ethereum and Tron are the leading stablecoin blockchains today

The Slow Lane of Traditional Payments

The modern global economy relies on efficient payment systems, and the existing infrastructure functions well enough to sustain smooth operations. However, there is still room for improvement in certain areas. The most notable example is cross-border payments – a concern that the G20 has explicitly addressed. Additionally, some domestic payment networks suffer from inefficiencies. Furthermore, the growth of AI-driven transactions will place new demands on the economic ecosystem's payment infrastructure. Stablecoins can help enhance efficiency in the global payment space and potentially reduce costs for consumers and businesses.

Cross-border payments involve financial institutions from multiple countries (and their regulators), making them typically more complex than domestic payments. Due to this complexity, cross-border payments are often more costly, slower to settle, and less transparent to end-users. The most common type of cross-border payment involves correspondent banks, where correspondent banks open accounts for partner banks in various domestic markets and handle transaction settlements between them (Figure 5). In some cases, multiple correspondent banks connect financial institutions from distant markets.

Figure 5: Cross-border payments involve multiple intermediaries
Data Source: Grayscale Investments. For reference only.

With each additional intermediary in the process, there is a potential increase in costs and delays. The Financial Stability Board (FSB) reports aggregated data on cross-border payment costs in its annual reports. Excluding remittances, the average cost of person-to-business cross-border payments in 2024 was 2%, and person-to-person cross-border payments cost around 2.5% on average. For remittances, the average cost is around 5%. For many cross-border payments, speed is not the issue: approximately 70% of retail payments can be completed within one business day after payment initiation, according to the FSB's annual report. However, there are also some payment corridors with an average processing time of over two days, possibly stretching up to 10 days. In such cases, stablecoins can offer lower costs and faster settlement times.

We believe that there is also room for improvement in domestic payment systems, such as those dominated by credit card networks in the United States. Credit card networks are highly concentrated, which may allow providers to maintain profits, while regulators and elected officials often explore ways to reduce costs. Stablecoins can increase competition in these markets and help lower costs for users.

The diagram below illustrates the typical structure of American credit card payments and the flow of associated fees. When a consumer spends $100, the merchant usually receives $97.75 and pays the remaining $2.25 (known as the merchant discount) to the issuing bank (on behalf of the financial institution processing the transaction). A portion of this amount ($1.45) is returned to the consumer in the form of credit card rewards. The remaining portion ($0.80) is earned as revenue by the banks and credit card companies that make up the credit card network. While many consumers appreciate the credit card rewards offered by this system, merchants may have an incentive to explore alternative forms of digital payment. Additionally, policymakers may be concerned that this system disproportionately benefits cardholders (who receive rewards) while disadvantaging cash users (who, in most cases, still pay the same final retail price).

Figure 6: Credit Card Payments Involve Various Fees

Finally, traditional payment systems are not well-suited for AI agents—autonomous software capable of independent action and executing complex instructions. As non-human actors, AI agents cannot legally own or operate bank accounts. In contrast, blockchain enables AI agents to autonomously control wallets and allocate financial resources. Blockchain also supports near-instantaneous microtransactions, whereas traditional systems require multi-day settlement times and high fees. Therefore, stablecoin payments on the blockchain can both enhance the functionality of AI agents and significantly expand their scope. Though this is a new use case for the global payment system, some analysts expect rapid growth in the coming years, potentially making AI agent payments a key use case for stablecoins.

Same Goods, Different Tracks

Stablecoins on public blockchains offer a fundamentally different architecture for digital payments. In payment industry terms, stablecoins represent a "backend" (foundational infrastructure layer) innovation, while many recent innovations have focused on the "frontend" (user interface layer). Stablecoin transfers on the blockchain are entirely peer-to-peer, without the need for intermediaries to process transactions (Figure 7). However, users may need to first "on-ramp" funds into the blockchain through a financial institution and then "off-ramp" the funds for use. If stablecoin payments can deliver (1) lower end-to-end total costs, (2) faster speeds, and/or (3) lower payment failure risk, users will opt for them.

Figure 7: Stablecoin Payments Are Peer-to-Peer
Data Source: Grayscale Investments. For reference only.

A smart contract platform blockchain processes transactions relatively quickly and at a relatively low cost (see Chart 8). Blockchain transaction costs do not scale 1:1 with transaction value, so the cost percentage of high-value transactions is often lower. For users who do not need to enter or exit fiat, stablecoins on the public chain are already an efficient way to transfer global digital value. As the adoption of stablecoins continues to grow and more merchants accept stablecoin payments for goods and services, the demand for using traditional banking channels may decrease, allowing more users to benefit from stablecoin transactions on the blockchain.

Chart 8: Smart Contract Blockchains Offer Fast and Low-Cost Transactions

However, in reality, most merchants do not yet accept stablecoin payments, and users need to cash out to use them. Therefore, when transacting with stablecoins, users need to consider the full end-to-end cost, including fiat on/off-ramp costs. While this is technically a straightforward process, financial institutions typically charge fiat on/off-ramp fees to cover compliance costs: intermediaries responsible for implementing Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) policies and procedures, as well as any applicable sanctions-related restrictions and other capital controls. Intermediaries may also incur costs related to payment fraud and other operational expenses. For all these reasons, the end-to-end cost of stablecoin transactions may not always be cost-competitive with traditional payment methods.

Many major crypto financial institutions, such as Coinbase (the largest U.S. exchange) and Mercado Bitcoin (the largest Latin American exchange), offer zero-fee fiat on/off-ramp services for stablecoins and other assets. For transactions with zero fees for fiat on/off-ramps, stablecoin transactions may be much cheaper than traditional payment methods. In other cases, the fiat on/off-ramp fee per transaction is around 1%, and in this scenario, the cost/benefit will depend on the specifics. In some other cases, these fees may exceed 5%, in which case stablecoins may not be as cost-effective as traditional alternatives. Over time, lower average on/off-ramp costs may be a factor supporting the continued adoption of stablecoins.

Grayscale Research expects stablecoins to penetrate the traditional payment space, but they are unlikely to be competitive in all niche markets (especially in the short term as some related blockchain infrastructure is still under development). Stablecoins already have a strong position in the cryptocurrency trading space and may further solidify. In the payment use case, we expect stablecoins to be most competitive in the following three areas:

1. Digital payments that are relatively slow, expensive, and/or involve many financial intermediaries—most notably cross-border payments.

2. Network effects or lack of competition allow intermediary institutions to maintain high-profit margins in digital payments. This also includes cross-border payments, but we believe it also encompasses domestic payment systems centered around bank cards, such as in the United States.

3. Public blockchain infrastructure provides unique advantages for digital payments, such as programmable payments and the ability to create new accounts with bank approval. These features are essential for AI agent payments.

Market Opportunity

Accurately estimating the Total Addressable Market (TAM) of stablecoins is not a simple task, but data from existing payment systems can give us a rough understanding of its potential scale. Figure 9 shows our rough estimate based on various sources. The global payment industry processes 20-30 trillion transactions annually, with a total value of 1,000-2,000 trillion dollars (i.e., 1-2 quadrillion dollars). The industry's revenue is approximately 2 trillion dollars, roughly divided into Net Interest Margin (NIM) and transaction fees.

Figure 9: Global payment industry processes 20-30 trillion transactions annually

In comparison, the stablecoin industry's scale is still relatively small. Currently, the total stablecoin transaction volume is around 100 million transactions per month (approximately 0.05% of traditional payments), with a total value of around 800 billion dollars per month (approximately 0.5%-1.0% of traditional payments).

Based on a 4%-5% U.S. cash rate and 250 billion dollars in interest-free stablecoins, stablecoin issuers may earn approximately 10-12 billion dollars in total interest income annually. Since most stablecoins do not pay interest, total interest and Net Interest Margin (NIM) income are likely similar (although stablecoin issuers have other operational expenses). We estimate separately that blockchain networks handling stablecoin transactions may only earn around 500 million dollars annually from such activities (excluding fees from other transactions). Therefore, the total revenue of the stablecoin industry is only equivalent to around 0.5% of traditional payment industry revenue.

The increasing adoption of stablecoins should support Net Interest Margin (NIM) and transaction fee revenue. According to the GENIUS Act, regulated U.S. payment-type stablecoins cannot directly pay interest. Therefore, stablecoin issuers may be able to temporarily maintain a healthy Net Interest Margin (NIM). However, competitive pressures may eventually lead to sharing some interest income with distribution partners (e.g., the partnership between Circle and Coinbase) and ultimately with users. Thus, the growth rate of Net Interest Margin income may be lower than the supply of stablecoins. The Net Interest Margin (NIM) earned by stablecoin issuance is mainly at the expense of commercial banks, as the current digital dollars issued by commercial banks are for public transaction use.

Conversely, we believe that the growth in transaction revenue should roughly track the growth in transaction volume. For example, if stablecoins represent 20% of the transaction volume processed through traditional payment channels, then the annual transaction volume would reach about 500 billion transactions. Calculated at a weighted average fee of $0.10 (see Chart 8), 500 billion transactions would amount to $50 billion in annual transaction fees — roughly 100 times the revenue currently generated by smart contract platform blockchains from stablecoin activity.

Ethereum hosts the largest number of stablecoins and processes the most stablecoin transactions. It also encompasses USDC, USDT, and some smaller-scale stablecoins. Therefore, the Ethereum ecosystem is likely to benefit from the widespread adoption of stablecoins. This includes Ethereum Layer 1 (possibly more suitable for high-value transactions and transactions requiring the highest level of security) and Ethereum Layer 2 (providing low-cost and high-speed transactions). Currently, the largest Ethereum Layer 2 stablecoin networks are Base, Arbitrum, and OP.

However, stablecoin activity is unlikely to be confined to the Ethereum ecosystem. We believe that other high-performance blockchains may also see an increase in stablecoin activity, including Solana, Avalanche, Sui, and many other blockchains. These blockchains are popular among users due to their low costs, high transaction throughput, and/or excellent end-user experience. Especially in consumer-facing applications, these alternative Layer 1 blockchains may have advantages over Ethereum Layer 1 or Ethereum Rollup. Tron is closely associated with Tether's USDT stablecoin, so its competitive position may depend on whether Tether takes steps to qualify USDT as a regulated payment stablecoin under the new GENIUS Act framework or whether Tron can effectively diversify to other stablecoins.

Applications that constitute the core infrastructure of DeFi should also benefit from stablecoin adoption. There could be many specific examples, but we focus on leading oracle and messaging service Chainlink and leading Ethereum decentralized exchange Uniswap. Specialized service providers focusing on stablecoins, such as Paxos, Ethena, and M0, are also expected to further promote adoption.

Financial Technology Companies Take Action

Traditional fintech companies as well as increasingly traditional financial services firms have not missed the stablecoin opportunity. Earlier this year, leading payment company Stripe finalized an $11 billion deal to acquire stablecoin infrastructure provider Bridge, its largest acquisition to date. Bridge enables businesses to issue, use, and transfer stablecoins globally through its API. Today, Bridge's client base ranges from startups to multinational corporations like SpaceX, which uses stablecoins for treasury management, and ScaleAI, which uses stablecoins to pay its global contractors.

Stripe recently acquired cryptocurrency wallet and fiat on/off ramp provider Privy. Stripe's vision is to make stablecoins a "layer on top of fiat" to reduce the traditional financial frictions faced by businesses and AI applications.

In addition to Stripe, other leading fintech companies involved in stablecoin development include PayPal (which launched its own stablecoin, PYUSD, in 2023 and is currently the tenth largest stablecoin by market cap) [30], Fiserv (recently launched FIUSD stablecoin), Robinhood, and Revolut (actively exploring stablecoin issuance). Stablecoins have also been directly integrated into platforms of multiple fintech companies, including Robinhood (for weekend settlements support), MoneyGram, Visa, and Mastercard.

Potential beneficiaries of stablecoin adoption may include existing companies issuing proprietary stablecoins and leveraging distribution advantages, or companies integrating third-party resources to enhance product services. We believe key winners may include infrastructure providers like Stripe and Paxos, as well as low-cost fiat on/off ramp providers like Coinbase and Mercado Bitcoin.

Ensuring System Security

The "GENIUS Act" provides a comprehensive regulatory framework for stablecoins in the United States, aiming to support stablecoin adoption while maintaining financial stability, protecting consumer rights, and preventing financial systems from being used for illicit activities. However, it is important to note that prior to the establishment of a robust regulatory framework, most stablecoins have proven effective in maintaining their peg to the U.S. dollar. Furthermore, global regulatory bodies have provided detailed compliance guidelines for stablecoin issuers and related service providers, and these bodies regularly collaborate with law enforcement agencies.

In 2022, the Terra USD stablecoin collapsed after its circulating supply grew to over $18 billion, marking a significant stain on the stablecoin industry. According to the "GENIUS Act," such "algorithmic" stablecoins cannot be used as regulated payment stablecoins and will not be integrated into mainstream consumer finance apps. Stablecoins fully backed by fiat assets, such as Circle's USDC, have consistently maintained their pegged exchange rate (Chart 10). For example, since September 2018, the price of USDC has dropped more than 0.25% below $1.00 for less than 1% of the time and only fell more than 1% below $1.00 for one day. Like the "currency board" in government money market funds and foreign exchange, value tools supported by secure and liquid collateral typically maintain their pegged exchange rate effectively. In addition, these narrow structures do not require the deposit insurance systems of banks supporting risk-bearing businesses or the central bank discount window lending system.

Figure 10: Failed Stablecoins Are the Exception, Not the Norm

According to the GENIUS Act, institutions authorized to issue stablecoins must hold reserves of at least 100% of the issued stablecoins in a clearly identifiable asset form. Acceptable reserve assets include U.S. dollar currency, demand deposits, short-term government bonds (≤93 days), repo and reverse repo agreements collateralized by government bonds, government money market fund shares, and central bank reserve deposits.

According to the GENIUS Act, stablecoins collateralized by other stablecoins (e.g., stablecoins where the reserve includes Circle USDC) will not qualify as regulated payment stablecoins. Based on their current reserve composition, stablecoins backed by crypto assets (e.g., DAI) and/or stablecoins involving derivatives (e.g., USDe) will not qualify as U.S. payment stablecoins (although they may take steps to qualify). This means that, based on their reserve composition, the number of stablecoins eligible to be regulated U.S. payment stablecoins appears relatively small (although issuers will still need to register with regulatory authorities, maintain various compliance policies, and meet other requirements of the new law). Non-yield-bearing stablecoins with a potentially compliant reserve structure include Circle's USDC, World Liberty's USD1, First Digital's FDUSD, PayPal's PYUSD, Ripple's RLUSD, and Paxos's USDG (Figure 11).

Figure 11: Top 20 Stablecoins

In addition, the Financial Action Task Force (FATF), a global regulatory organization responsible for setting anti-money laundering and counter-terrorism financing policy rules, has issued guidance on digital assets for about 10 years. In fact, financial institutions engaged in digital asset operations must apply nearly all standard FATF policies, including Know Your Customer (KYC) policies and ongoing customer due diligence. This includes the Travel Rule, which requires service providers to record and transmit specific identity information about participants in crypto transactions. Stablecoin issuers must cooperate with law enforcement agencies and freeze funds when required. For example, in 2023, Tether froze $225 million worth of USDT at the request of law enforcement; more recently, Circle froze $58 million related to a memecoin.

The GENIUS Act similarly designates every approved stablecoin-issuing entity as a "financial institution" under the U.S. Bank Secrecy Act (BSA), subjecting them to comprehensive anti-money laundering and sanctions rules. Issuing entities must maintain a risk-based Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) program, appoint a compliance officer, monitor transactions and file Suspicious Activity Reports (SAR), keep records, verify customers under a Know Your Customer (KYC) regime, and establish technological controls to prevent, freeze, or refuse illicit transfers. The Treasury Department is directed to establish targeted regulations, but the statutorily prescribed duties—customer due diligence, SAR reporting, and sanctions screening—are akin to those of banks.

Limiting Factors for Stablecoin Adoption

Stablecoins represent a popular innovation in the global payments infrastructure space, with the expectation that they will help reduce costs and bring new benefits to consumers. However, the widespread adoption of stablecoins still faces limitations, partly due to the proven effectiveness of certain competitive payment innovations. Additionally, the underlying blockchain infrastructure lacks some features necessary for stablecoins to fully realize their potential.

Many large countries have already seen the emergence of fintech platforms offering low-cost, nearly instantaneous retail payment services. These platforms include China's Alipay and WeChat Pay, India's UPI, and Brazil's Pix. Furthermore, some companies are working to interconnect these systems for more efficient cross-border payments. Other fintech firms are focused on cross-border payments, such as Revolut, Remitly, and Wise. These services can offer cost-effective and rapid cross-border payments when both parties have accounts on the platform. Lastly, stablecoins may ultimately have to compete with tokenized deposits, which are another form of digital U.S. dollars on the blockchain. Tokenized deposits operate under a bank-centric framework, lacking some of the advantages of stablecoins (as circulating digital non-identity-linked assets), but have found favor with some regulators (and certainly some banks).

Ultimately, consumers may have a choice between stablecoins and Central Bank Digital Currencies (CBDCs). The numerous potential types of CBDCs go beyond the scope of this report. However, in simple terms, CBDCs are another form of digital token that has a more direct peg to the dollar due to a claim on central bank money (see Figure 12). CBDCs may or may not circulate on public chains like Ethereum. The main advantage of CBDCs over stablecoins is that digital tokens are more directly tied to the economy's monetary system (rather than indirectly through collateral). However, some policymakers are concerned that CBDCs may lead to decreased privacy or introduce other risks. The U.S. House of Representatives also considered anti-CBDC legislation last week; the bill passed in the House with 219 votes for and 210 votes against, with two Democrats voting in favor and Republicans in the majority.

Figure 12: CBDC Can Directly Access Central Bank Money

One of the most significant limitations of recent stablecoin applications may stem from the underlying blockchain infrastructure itself. Over the past decade since Ethereum's launch, smart contract platforms have made significant strides, processing millions of transactions successfully every day. However, they still exhibit some weaknesses in the payments space. For instance, most blockchains do not inherently provide privacy — every transaction is recorded on a public ledger — and users may be unwilling to expose their spending history with each payment. To fully unlock the potential of stablecoins, blockchain may need a system that combines verifiable identity with privacy elements. Some researchers propose embedding this logic directly into the blockchain using zero-knowledge proofs.

Like stablecoins, blockchain is a nascent technological innovation that is still evolving. As blockchain technology matures beyond its adolescence with the support of more robust regulatory frameworks, we believe it will bring numerous benefits to consumers, enhancing the efficiency of digital payments and other financial services.

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