Written by: Sidhartha Shukla, Bloomberg

Compiled by: Saoirse, Foresight News

Key points of this article

  • According to data from Visa and Allium, by 2025, the trading volume of stablecoins has reached $5 trillion, involving 1 billion payments.

  • Using stablecoins to exchange different fiat currencies incurs costs similar to conventional exchanges, including bid-ask spreads, exchange fees, intermediary fees, and slippage.

  • When discussing the limitations of stablecoins as emerging payment tools, Mike Robertson, CEO of foreign exchange infrastructure company AbbeyCross said: "In the cryptocurrency space, some believe that code and technology can solve all problems. But in the foreign exchange field, this idea is too naive."

Despite the peak period that stablecoins have entered as expected, seasoned professionals in the fintech field still believe that these tokens have limitations as emerging payment tools.

According to data from Visa and Allium, by 2025, the total trading volume of stablecoins has reached $5 trillion, involving 1 billion payments, which is not far from the total of $5.7 trillion for the entire year of 2024. Since Donald Trump was elected President of the United States in November 2024, the total market capitalization of these cryptocurrencies, which aim to track the prices of mature currencies like the US dollar, has grown by 47% to $255 billion.

The prospects for stablecoins bring a faster, lower-cost, and more efficient future for the payment sector, especially for cross-border payments. From the data, this potential is gradually being realized, but there are still doubts about whether this technology can solve the long-standing problems that have plagued the foreign exchange business for decades.

When using stablecoins to exchange different fiat currencies (for example, euro to Hong Kong dollar), many costs similar to conventional exchanges are incurred.

"In the cryptocurrency space, some believe that code and technology can solve all problems. But when applied to the foreign exchange sector, this idea is too naive," said Mike Robertson, CEO of foreign exchange infrastructure company AbbeyCross. "Each currency has its unique dynamics. Moreover, most banks and payment institutions derive their profits from foreign exchange trading, not from fees."

Stablecoin trading volume is expected to double compared to last year

Source: Visa, Allium

Note: Data for 2025 is as of July

Foreign exchange costs typically include bid-ask spreads, exchange fees, intermediary fees, and slippage. These costs also exist in cross-border cryptocurrency transactions and may be particularly pronounced during fund inflows and outflows, challenging the 'low cost' claim made by stablecoin advocates.

The growth in stablecoin payment volume is primarily attributed to two major application scenarios: one is to simplify cross-border transactions that traditional financial institutions have inadequately covered, and the other is payment businesses in emerging markets.

BVNK, a startup focused on stablecoin payment infrastructure, is not particularly concerned about payment channels related to the British pound and the US dollar. According to Sagar Sarbhai, Managing Director for Asia Pacific at BVNK, the company is focusing on 'alternative' payment channels, such as payment routes from Sri Lanka to Cambodia.

"This type of route often requires multiple intermediaries, which not only increases costs but also slows down the process. Stablecoins simplify this process. Although current costs may not be low, the speed is faster and the efficiency of capital usage is higher," he stated. Currently, BVNK's annual trading volume is about $15 billion.

However, BVNK is not the only startup focused on helping businesses engage in stablecoin operations.

After experiencing a winter in the cryptocurrency industry in 2022, Conduit transformed into the stablecoin payment sector. This startup began utilizing stablecoins to allow users to remit through local systems like Brazil's Pix and receive payments via SEPA (the Single Euro Payments Area, a standardized payment system covering the EU and some European countries). According to CEO Kirill Gertman, the company's annual processing scale is currently $10 billion.

Singapore-based Thunes and Canada's Aquanow are also attempting to collaborate with stablecoin issuers and enterprises to simplify payment processes.

"The rise of stablecoins is a business opportunity," said Floris de Kort, CEO of Thunes, which raised $150 million in April this year. "The infrastructure may change, but people will always need to make 'last mile' payment deliveries using local currencies and wallets."

Venture capitalists reignite interest in stablecoins

Source: CB Insights

Note: Data for 2025 is as of July 23

Compared to the scale of mature payment operators, the above data may seem insignificant. According to Visa's latest annual report, Visa alone processed $132 trillion in payments in 2024, more than double the total trading volume of stablecoins during the same period.

However, the rapid growth of the market has made payment giants highly vigilant. They are exploring the so-called 'stablecoin layer' model: introducing stablecoins between two fiat currencies to bypass traditional banking networks like SWIFT for transaction settlements within minutes, focusing on markets with dollar liquidity shortages and inefficiencies in traditional systems.

In October 2024, Visa launched a platform allowing banks to mint, burn, and transfer tokens backed by fiat currencies, including tokenized deposits and stablecoins.

The recently passed (GENIUS Act) in the U.S. has brought a clear regulatory framework for the world's largest stablecoin market, allowing banks and payment institutions to enter this field with greater confidence. This has led to a global race among regulators to establish similar regulatory rules for stablecoin issuers.

"We are just beginning to see signs of exponential growth," said Sarbhai of BVNK. "The foundation laid in the past five years may lead to an explosion in the next 12 months."