Stablecoins are shifting from crypto-native experiments to instruments embedded in existing banking and payment infrastructure.
Analysis
Traditional finance institutions across the US, Europe and Asia are moving into stablecoins now that regulatory uncertainties are easing.
Payment companies like PayPal, Mastercard and Visa are either launching stablecoins, integrating stablecoin settlement into payment systems or building the infrastructure to support them.
The race is not limited to corporations but is also developing at the banking level. In early October, a group of major international banks, including Goldman Sachs, Deutsche Bank, Bank of America, BNP Paribas and Citi, issuing a “reserve-backed” digital money on public blockchains.
Development has accelerated after the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act was on July 18. Different entities are choosing different models, from fully collateralized retail stablecoins to tokenized deposits and wholesale settlement tokens.
Here’s how the race is unfolding.
GENIUS shoots the starting gun for the US stablecoin race
Before the GENIUS Act, the primary path for US stablecoins was New York’s trust charter regime. PayPal followed that route in August 2023 by issuing PayPal USD () through Paxos, which is licensed by the New York State Department of Financial Services.
Wisconsin-based Fiserv FIUSD in June 2025 and plans to integrate it into banking and merchant settlement systems by year-end, using Paxos and Circle infrastructure. After GENIUS was signed, Fiserv by partnering with the Bank of North Dakota on the “Roughrider Coin” interbank settlement pilot.
Mastercard joined Paxos’ Global Dollar Network in June 2025 to enable stablecoin settlement across its merchant and payment rails, expanding support for PYUSD, USDC and FIUSD. Visa began settling USDC on Ethereum in 2021 and extended that to Solana in 2023, allowing processors such as Worldpay and Nuvei to settle obligations directly in stablecoin rather than by wire.
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Custody and trust banks have moved to secure the asset-servicing layer. BNY Mellon now custodies stablecoins issued by Ripple and Société Générale.
Some banks are taking a different approach. JPMorgan is , on Base. According to JPMorgan’s blockchain arm, Kinexys, deposit tokens are an alternative to stablecoins for cash settlement and payments for its institutional clients.
Large retailers are also exploring issuance. Walmart and Amazon are . Meanwhile, remittance processor Western Union is .
The GENIUS Act takes effect after an 18-month implementation period or 120 days after final rules are issued.
MiCA is live, but US dollar still dominates stablecoins
Euro stablecoins still represent only a small share of stablecoin volume globally, with most liquidity in dollar-pegged USDC and USDT. That dominance was built before the GENIUS Act. And with US TradFi giants racing into the stablecoin ecosystem, that dominance is expected to grow.
“Without a strategic response, European monetary sovereignty and financial stability could erode,” Jürgen Schaaf, payments adviser at the European Central Bank, warned in a .
Europe’s stablecoin shift is being shaped by the Markets in Crypto-Assets (MiCA) regulation, which took . The rulebook gives banks and regulated financial firms a path to issue euro-denominated stablecoins, and compliant stablecoin activity has accelerated accordingly.
In France, Société Générale’s digital asset arm, SG-Forge, has issued EURCV and USDCV, with custody handled by BNY Mellon. Germany’s AllUnity, a joint venture between DWS, Deutsche Bank, Galaxy and Flow Traders, has and plans to expand it across multiple blockchains.
One of the largest moves came from a group of nine European banks working to create a shared alternative. ING, UniCredit, KBC and DekaBank are among those that formed a company in the Netherlands .
The project is expected to launch in 2026 and is framed as part of the bloc’s push for payments sovereignty and reduced reliance on US-based stablecoin infrastructure.
Asia’s fragmented stablecoin race
Asia’s approach to stablecoins is developing along regional regulatory lines rather than through a cross-border framework like MiCA.
Japan put the earliest stablecoin regime in place among major economies. Amendments to the Payment Services Act took effect in June 2023, creating a legal category for “issuer-backed” stablecoins that must be fully redeemable at par and issued either by banks, trust companies or licensed money transmitters.
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The country’s megabanks — Mitsubishi UFJ, Sumitomo Mitsui and Mizuho — have been building toward a joint launch of a yen-backed stablecoin, with a possible launch at the end of the fiscal year, which ends March 31. Mitsubishi announced on Friday that its stablecoin issuance has been approved by the Financial Service Agency.
Hong Kong’s regime took effect in August under the Hong Kong Monetary Authority. Several firms expressed interest, but the HKMA has cautioned that most applicants will have their applications . Chinese tech giants have also lined up for a Hong Kong stablecoin permit but have since reportedly halted their plans .
One of the high-profile announcements came from a planned joint venture between Standard Chartered Hong Kong, Hong Kong Telecom and Animoca Brands, which intends to issue a Hong Kong dollar-backed stablecoin once licensed.
Cleansing the image of stablecoins
Stablecoins were pushed into regulatory focus after the collapse of Terra’s UST in 2022, which showed the systemic risks of algorithmic peg mechanisms.
Rules introduced since generally define stablecoins as tokens fully backed by cash or short-term liquid assets and redeemable at par. This effectively excludes algorithmic stablecoins from licensed issuance, though they continue to exist in the corners of decentralized finance.
Clearer regulation has opened the door for TradFi entities to enter the market with centrally managed stablecoins and bank-issued deposit tokens. These instruments are being integrated into their existing payment networks, settlement systems and corporate flows.
As a result, stablecoins are increasingly functioning as operational payment and settlement infrastructure across consumer payments, institutional transfers and cross-border transactions.
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