Stablecoins: The New Backbone of Internet Payments
Stablecoins are rapidly emerging as the default settlement layer for the internet, outperforming traditional payment networks like Visa and Mastercard in onchain transaction volume. Their adoption is fueled by faster processing times, lower costs, and enhanced security for global transactions. Noam Hurwitz, head of engineering at Alchemy, describes this shift as “explosive,” signaling a transformative moment in digital payments.
Major Companies Driving Stablecoin Integration
Leading financial platforms such as PayPal and Stripe are now incorporating stablecoins to capitalize on the efficiency of onchain infrastructure. According to Hurwitz, stablecoins have exceeded Visa and Mastercard’s onchain volume by 7%, underscoring their rising prominence. Alchemy supports this evolution by providing critical infrastructure for major stablecoin networks.
The Expanding Role of Stablecoins in Finance
Beyond revolutionizing payments, stablecoins are becoming key players in the U.S. Treasury market. For instance, Tether (USDT) reported $13 billion in profits last year, backed by approximately $113 billion in U.S. debt holdings. Hurwitz highlights tokenized money as the cornerstone of a new financial ecosystem, enabling groundbreaking innovations.
Navigating Challenges and Regulatory Progress
Despite their benefits, stablecoins face hurdles like blockchain fragmentation and trust issues. The U.S. GENIUS Act aims to clarify regulations, fostering innovation while ensuring stability. However, the Bank for International Settlements questions whether stablecoins can fully replace traditional money, citing unmet criteria.
The Future Landscape of Stablecoins
Looking forward, Hurwitz predicts widespread adoption of proprietary blockchains by financial institutions, particularly layer 2 solutions, to enhance scalability and profitability. He envisions a future where improved infrastructure enables seamless crosschain interactions, creating a more interconnected financial system powered by stablecoins.
