Written by: Sidhartha Shukla, Bloomberg
Compiled by: Saoirse, Foresight News
Key Points of the Article
According to data from Visa and Allium, as of July 2025, the transaction 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.
Mike Robertson, CEO of foreign exchange infrastructure company AbbeyCross, spoke about the limitations of stablecoins as an emerging payment tool: "In the cryptocurrency space, some believe that code and technology can solve all problems. But in the foreign exchange space, that idea is too naive."
Although stablecoins have entered the anticipated peak period, seasoned professionals in the fintech sector still believe that as an emerging payment tool, these tokens have limitations.
According to data from Visa and Allium, as of July 2025, the total transaction volume of stablecoins has reached $5 trillion, involving 1 billion payments, 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 dollar, has grown by 47%, reaching $25.5 billion.
The prospects for stablecoins promise a faster, lower-cost, and more efficient future for the payment sector, especially in cross-border payments. According to data, this potential is gradually being realized, but doubts remain about whether this technology can solve the long-standing problems that have plagued the foreign exchange business for decades.
Using stablecoins to exchange different fiat currencies (e.g., euros to Hong Kong dollars) incurs many of the same costs as conventional exchanges.
"In the cryptocurrency space, some believe that code and technology can solve all problems. But when it comes to foreign exchange, that 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 earn profits from foreign exchange trading, not transaction fees."
Stablecoin transaction volume is expected to double compared to last year.
Source: Visa, Allium
Note: Data as of July 2025
Foreign exchange costs typically include bid-ask spreads, exchange fees, intermediary costs, and slippage. These costs are also present in cross-border cryptocurrency transactions, and may be particularly pronounced during the capital inflow and outflow stages, posing a challenge to the proponents' claims of 'low costs' for stablecoins.
The growth in stablecoin payment volume is mainly due to two application scenarios: one is simplifying cross-border transactions where traditional financial institutions have insufficient coverage, and the other is payment services in emerging markets.
BVNK, a startup focused on stablecoin payment infrastructure, is less concerned about payment channels related to the British pound and the dollar. According to Sagar Sarbhai, managing director for the Asia-Pacific region at BVNK, the company has instead focused on 'alternative' payment channels, such as payment routes from Sri Lanka to Cambodia.
"Such routes typically require multiple intermediaries, which not only increases costs but also slows down the process. Stablecoins simplify this process. While current costs may not be low, the speed is faster, and the capital efficiency is higher," he stated. Today, BVNK's annual transaction volume is about $15 billion.
However, BVNK is not the only startup focused on helping businesses develop stablecoin operations.
After the cryptocurrency industry experienced a winter in 2022, Conduit transformed into the stablecoin payment sector. This startup began utilizing stablecoins to enable users to remit via local systems like Brazil's Pix and receive payments through 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 volume currently reaches $10 billion.
Singapore-based Thunes and Canada's Aquanow are also trying to collaborate with stablecoin issuers and businesses to simplify payment processes.
"The rise of stablecoins is a business opportunity," said Floris de Kort, CEO of Thunes, which raised $150 million this April. "The infrastructure may change, but people will always need to complete 'the last mile' of payment delivery using local currencies and wallets."
Venture capitalists rekindle their interest in stablecoins.
Source: CB Insights
Note: Data as of July 23, 2025
Compared to the scale of established payment operators, the above data may seem insignificant. According to Visa's latest annual report, Visa alone has a payment processing scale of $132 trillion in 2024, which is more than twice the total volume of stablecoin transactions during the same period.
But 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, achieving transaction settlements within minutes, with a focus on markets suffering from dollar liquidity shortages and inefficiencies in traditional systems.
In October 2024, Visa launched a platform that allows 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. provides a clear regulatory framework for the world's largest stablecoin market, allowing banks and payment institutions to enter the field with more confidence. This has triggered a competitive response from global regulators, who are formulating similar regulatory rules for stablecoin issuers.
"We are just beginning to see signs of exponential growth," said Sarbhai of BVNK. "The foundation laid over the past five years could lead to an explosion within the next 12 months."