Bitcoin gets the headlines. Ethereum powers the smart contracts. Yet behind closed doors on Wall Street, the conversation keeps circling back to something most retail investors barely notice: dollar-pegged stablecoins.
This isn’t just another crypto trend catching institutional attention. What’s happening runs deeper. Stablecoins are quietly positioning themselves at the intersection of payments infrastructure, regulatory frameworks, and government financing in ways that make them impossible for traditional finance to ignore.
Follow The Money Through Payment Rails
Every wire transfer that takes three business days to clear represents friction in the global economy. Every international payment that burns fees on correspondent banking signals inefficiency. Stablecoins eliminate both problems, and major corporations are noticing.
When PayPal Holdings Inc. (NASDAQ:PYPL) launches its own stablecoin, that’s not a crypto experiment. When Visa Inc. (NYSE:V) builds settlement infrastructure for USD Coin (CRYPTO: USDC), that’s strategic repositioning. According to Andreessen Horowitz’s State of Crypto report, stablecoins processed $46 trillion in total transaction volume through 2025, doubling from the previous year. These companies see the writing on the wall: instant, near-zero-cost settlement will eventually become table stakes.
Traditional banks earn billions from payment processing fees and float periods between transactions. Stablecoins compress those revenue streams into negligible margins. JPMorgan Chase & Co. (NYSE:JPM) responded by creating its own internal stablecoin for client payments, reportedly processing over $1 billion daily, rather than watching competitors capture the market.
The threat extends beyond just payment fees. When businesses can settle cross-border invoices in minutes using Tether (CRYPTO: USDT) instead of waiting days for correspondent banking networks, the entire value proposition of international banking relationships changes. That’s not disruption at the margins. That’s core business model risk.
The Government Debt Puzzle Nobody Expected
Here’s where things get interesting for Wall Street analysts tracking stablecoins: these tokens have accidentally become significant participants in U.S. government financing.
Stablecoin issuers need safe, liquid assets to back their tokens. Short-term Treasury bills check every box. Tether reported holding $135 billion in U.S. Treasuries through Q3 2025, positioning it as the 17th largest holder of U.S. government debt globally, ahead of several countries. Circle holds approximately $127 billion in total Treasury exposure as of Q2 2025, representing a significant portion of its reserves.
This creates a feedback loop that policymakers are just beginning to understand. Growing stablecoin adoption directly increases demand for government debt. Not through traditional investment channels, but through …Full story available on Benzinga.com
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