Stablecoins, a type of cryptocurrency pegged to a stable asset like the US Dollar, have been gaining traction in the Western world. While they have been widely used in developing countries, regulatory hurdles and existing digital payment systems have slowed down their adoption in the US, UK, and Europe. However, recent developments in the stablecoin ecosystem are changing the game.
In 2025, the US Congress passed the GENIUS Act in July, establishing a federal licensing framework for dollar-pegged stablecoins. Around the same time, fintech giants Stripe and Paradigm introduced Tempo, a blockchain network designed for stablecoin-based payments, focusing on payroll, remittances, marketplace transactions, and machine-to-machine interactions.
Under the GENIUS Act, stablecoin issuers are required to maintain full reserves in cash and short-dated Treasuries, disclose their reserves monthly, and adhere to regulatory oversight by banking regulators and the Office of the Comptroller of the Currency (OCC). The law also prohibits stablecoin issuers from paying interest to holders, creating a policy challenge around rewards programs offered by some platforms.
Market projections by consulting firm McKinsey suggest that daily stablecoin transactions could reach $250 billion within three years, driven by increasing merchant acceptance and business-to-business payments on low-fee blockchain networks. Major payment processors like Visa and Mastercard have already started integrating stablecoin settlement into their platforms, further boosting the adoption of stablecoins.
The revenue potential for stablecoin networks is significant. With projected daily transaction volumes reaching $250 billion by 2028, annualized settlement values could exceed $90 trillion. A small percentage of transaction fees could translate to billions of dollars in revenue for stablecoin networks, with potential for additional value capture through compliance services and fraud prevention.
In this evolving landscape, winners and losers will be determined by regulatory compliance, fiat currency support, and integration with existing financial systems. Established stablecoins like USDC and EURC are well-positioned to benefit from their existing network and settlement infrastructure, while newer players like Tempo are targeting enterprise-scale payment solutions.
Despite the promising outlook, challenges like network fragmentation and regulatory scrutiny remain. The European Central Bank’s recent call for safeguards on foreign stablecoins underscores the importance of global regulatory coherence in shaping the future of stablecoin adoption.
Overall, the stablecoin market is poised for significant growth in the coming years, driven by regulatory clarity, technological advancements, and increasing demand for efficient cross-border payments and digital transactions. As the industry continues to mature, stablecoins are set to play a key role in shaping the future of finance and digital payments. The debate surrounding the rewards workaround in the stablecoin industry is intensifying, with bank groups like BPI and contributors from the National Law Review pushing back against the current system. This pushback may result in regulatory changes that could impact user incentives at the individual level.
One of the key concerns raised by these groups is the issue of superpriority for stablecoin holders in bankruptcy. While this provision helps reduce the risk of a run on stablecoins, it also raises the costs associated with resolving issuer insolvency, potentially creating barriers to entry for new players in the market. Additionally, the need for compliance with sanctions and anti-money laundering regulations will add fixed overhead costs, giving an advantage to larger issuers and networks that have the resources to meet these requirements.
It is important to recognize that the take-rates projected in this industry should be viewed as flexible ranges that may narrow as competition increases. The success of stablecoin issuers will not solely depend on transaction throughput, but also on their ability to integrate with enterprise systems. This shift in focus could inadvertently disadvantage smaller issuers who may struggle to keep up with the regulatory and compliance demands of the industry.
Looking ahead, there are several key developments to monitor in the stablecoin space. These include the full-scale implementation of stablecoin settlement by major payment networks like Visa and Mastercard, the adoption of stablecoins for merchant and payroll transactions through platforms like Tempo, and the release of guidance from the Treasury Department under the GENIUS Act regarding licensing, disclosures, and reserve requirements.
If the current trajectory outlined by McKinsey continues, stablecoins are poised to directly compete with traditional payment methods like credit cards and bank transfers in terms of speed and cost. With an estimated settlement volume of $250 billion per day projected by 2028, stablecoins are on track to become a significant player in the global financial landscape.
In conclusion, the evolving landscape of stablecoin rewards and regulations presents both challenges and opportunities for industry participants. By staying informed and adapting to changing market dynamics, stakeholders can position themselves for success in this rapidly growing sector.