This Week in Stablecoins: Replacing Financial Plumbing, Not Dollars

Stablecoins would rather that the traditional financial sector forgot about the last decade of crypto.

While the industry’s Wild West growth pains during its first dozen years of existence were defined by volatility, scams and regulatory standoffs, stablecoin proponents are eyeing a future where the next chapter of blockchain-based finance may be characterized by digital assets embedded invisibly into payment flows, settling trades, paying suppliers, moving remittances, all without end users needing to know or care about the underlying technology.

Still, the bullish case for stablecoins is tempered by unresolved challenges. Cybersecurity risks are inherent in blockchain systems. Regulatory arbitrage where issuers shop for the most lenient jurisdiction could create uneven playing fields. Liquidity crises could emerge if stablecoin redemptions spike during market stress.

There is also the question of interoperability. Today’s stablecoin ecosystem is fragmented across multiple blockchains, with varying technical standards and levels of security. For global adoption, some level of harmonization will be needed, whether through technical protocols, industry standards or regulatory mandates.

Yet the sector’s momentum, measured across this week’s headlines alone, suggests that stablecoins are not just waiting around to become a core component of global transaction flows. Instead, they’re partnering, building and plugging themselves into traditional finance, with the goal of reshaping not just how money moves but the store of value itself.

Read more: The Ether Machine Makes Billion-Dollar Bet on – Guess What – Ethereum 

Recent stablecoin marketplace moves aren’t about replacing the dollar or euro, but replacing the slow, costly plumbing behind them, particularly for cross-border and B2B flows.

On Thursday (Aug. 7), Corpay, a stalwart in corporate payment services, announced that it had teamed with Circle to expand global stablecoin usage. Their agreement will integrate Circle’s USDC and EURC directly into Corpay’s cross-border payments system, which serves more than 80 countries. Businesses using Corpay’s commercial cards — fleet, purchasing and travel — will be able to fund accounts with stablecoins and settle transactions in local currencies without going through traditional bank intermediaries.

Corpay says it will offer built-in digital wallets, programmable APIs for treasury operations and instant settlement outside of banking hours. For Circle, which has spent years courting institutional adoption, the deal is validation of its enterprise-first approach. USDC’s market share has been under pressure from competitors, but Circle has leaned into transparency, regulated reserves and partnerships with companies like Visa, Stripe and now Corpay.

While Corpay and Circle are building B2B connections, Ripple is buying global scale. Its recent $200 million acquisition of Rail, expected to close in the fourth quarter, gives Ripple a direct foothold in one of the fastest-growing segments of the payments industry. Rail’s platform already handles roughly 10% of global B2B stablecoin flows, offering corporate clients virtual accounts, automated reconciliation, and integration with enterprise resource planning software.

For Ripple, the move is partly about diversification. Once known mainly for its XRP token and its protracted legal battle with the SEC, the company has repositioned as a cross-border payments network that can work with multiple digital assets. Rail’s infrastructure gives it reach into a customer base already transacting in stablecoins daily, and owning a platform like Rail lets Ripple compete not just on currency issuance or liquidity provision, but on the full stack of enterprise payment services.

Read more: This Week in Stablecoins: Building Next-Gen Rails for Enterprise Finance 

Over the past two years, stablecoins have grown from a $140 billion to a $220 billion asset class, with USDC, Tether’s USDT and PayPal USD dominating issuance. But adoption has been slowed by regulatory uncertainty — especially in the U.S.

But all that is changing, with the U.S. Securities and Exchange Commission (SEC) penning an opinion that USD-pegged stablecoins meeting strict standards such as 1:1 fiat reserves, clear redemption rights, and no investment-return features would be treated as cash equivalents rather than securities.

That means such stablecoins could be held on balance sheets like cash, used in corporate payments without securities compliance overhead, and integrated into traditional financial infrastructure with fewer legal uncertainties. For banks, payment processors and FinTech firms, the decision opened a door long feared to be bolted shut.

And if there were doubts about whether large incumbents are ready to embrace stablecoins, the latest corporate earnings season offered a clear answer. Visa, PayPal, SoFi, Coinbase and Robinhood all highlighted blockchain-settled currencies, particularly for cross-border and B2B use, as a key growth vector.

Still, not all recent stablecoin news has been celebratory. Also on Aug. 7, Paxos announced it had reached a $48.5 million settlement with the New York Department of Financial Services over anti-money-laundering and due-diligence deficiencies tied to its relationship with Binance.

The agreement includes a $26.5 million fine and $22 million earmarked for compliance improvements. The settlement is a reminder that while regulators may be warming to stablecoins, they expect robust oversight and controls from issuers.

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