What did smart money see in BlackRock and Visa's high-stakes stablecoin gamble?

In January 2026, the global stablecoin market cap soared past $317 billion, setting a new record high.

The real story, however, isn’t just the number—it’s the shift behind it: Circle’s USDC surged 73% in 2025, outpacing Tether’s USDT (36%) for the second straight year. In December 2025, Visa announced USDC settlement services in the US.

When the world’s largest payment network settles with stablecoins, when BlackRock—managing $10 trillion in assets—launches on-chain money market funds, and when JPMorgan settles $3 billion daily via blockchain, what are these financial giants seeing?

Why Are Traditional Financial Giants Going All In Onchain?

In March 2024, BlackRock introduced BUIDL—a tokenized money market fund.

This wasn’t BlackRock’s first blockchain experiment, but it was its boldest. BUIDL launched directly on a public chain, holds US Treasuries and cash, maintains a $1 net asset value, and pays out earnings to holders monthly.

BUIDL crossed the $1 billion milestone in March 2025, becoming the first on-chain fund of its size. By year-end 2025, it surpassed $2 billion—now the largest tokenized fund on the market.

What’s BlackRock’s insight?

It’s straightforward: efficiency and cost.

Traditional money market funds require T+1 or T+2 for settlement, and cross-border transfers run through SWIFT, incurring fees at every step. On-chain funds transfer in seconds, cost less than $1 per transaction, and operate 24/7.

Even more significant, BUIDL opened a brand-new distribution channel. Retail investors once found it nearly impossible to access money market funds (with minimums typically above $1 million). Blockchain makes it accessible to everyone.

That’s why protocols like Ondo Finance are thriving.

Ondo’s model is simple: repackage BlackRock’s BUIDL and other institutional-grade RWA products into smaller shares for DeFi users. Its OUSG product invests directly in BUIDL, letting everyday users earn the 4–5% annualized yield on US Treasuries.

The tokenized US Treasuries sector exploded in 2025, jumping from less than $200 million at the start of 2024 to over $7.3 billion by year-end 2025 (RWA.xyz data). BlackRock’s entry effectively gave the entire RWA sector a regulatory seal of approval.

Why Are Institutions Choosing USDC Over USDT?

Tether (USDT) remains the dominant stablecoin, with a $186.7 billion market cap and 60% market share.

But smart money is moving elsewhere.

In 2025, USDC’s market cap grew from about $44 billion to over $75 billion—a 73% increase. USDT grew only 36%, from around $137 billion to $186.7 billion. That’s two years running where USDC’s growth outpaced USDT.

Why?

The answer: regulation.

On July 18, 2025, the US President signed the GENIUS Act—America’s first federal law targeting stablecoins. The law requires “payment stablecoins” to have 100% reserves (cash or short-term Treasuries) and prohibits interest payments to users.

Circle’s USDC meets all these requirements. Circle also became the first global issuer to achieve full MiCA compliance in the EU.

What’s the significance?

USDC now has a passport to mainstream finance.

When Stripe opted for stablecoin payments, it chose USDC. When Visa rolled out stablecoin settlement, it chose USDC. When Shopify enabled merchants to accept stablecoins, it supported USDC.

For banks, payment companies, and regulated exchanges, USDC is a “whitelisted asset.” USDT, due to reserve transparency concerns, even faces delisting pressure in Europe.

Tether isn’t worried, though.

Its stronghold isn’t the US or Europe, but high-inflation regions—Latin America, Africa, and Southeast Asia.

In countries like Argentina, Turkey, and Nigeria, USDT has effectively replaced part of the local currency, becoming a de facto “shadow dollar.” People’s first move after payday is to convert wages into USDT for value preservation.

The stablecoin market is now splitting along two distinct tracks:

• USDC: The compliance route, serving US/EU institutions and payment use cases, backed by top investors like BlackRock, Fidelity, and General Catalyst
• USDT: The offshore route, serving emerging markets and trading scenarios, holding an irreplaceable position across the Global South

Are Payment Giants Surrendering or Evolving?

In December 2025, Visa launched USDC settlement services in the US.

This was a historic milestone.

Historically, Visa charged 1.5%–3% per transaction. Now, it lets partners settle in USDC, slashing fees dramatically.

This looks like self-disruption, but it’s actually a defensive move.

What threat does Visa see?

Stablecoins are eating into its core business: cross-border payments.

Traditional cross-border payments pass through multiple correspondent banks, each taking a cut, and can take three to five days to settle. Stablecoin payments arrive in seconds, with fees under $1.

According to a16z, total stablecoin transaction volume reached $46 trillion in 2025 (already surpassing Visa), with adjusted payment/settlement volume at about $9 trillion. Growth is rapid, and stablecoins are steadily capturing cross-border and emerging market share.

Visa’s strategy: If you can’t beat them, join them.

With USDC settlement, Visa is shifting from “payment channel” to “payment coordinator.” Instead of high transaction fees, it now earns by providing compliance, risk management, and anti-money laundering services.

Other payment giants are making moves, too:

• Stripe: Acquired stablecoin infrastructure platform Bridge for $1.1 billion in October 2024—one of crypto’s largest deals ever
• PayPal: Its stablecoin PYUSD soared 600% in 2025, from $600 million to $3.6 billion
• Western Union: Will launch USDPT stablecoin on Solana in the first half of 2026
• Ten European banks: Formed Qivalis, planning to launch a euro stablecoin in late 2026

Notably, both Western Union and Visa’s first partners chose Solana as the settlement chain, underscoring the advantages of high-performance public blockchains for payments—high throughput and low fees.

Banks Refuse to Stand By

With nonbanks (Circle, Tether) and payment giants (Stripe, Visa) on the attack, banks aren’t sitting idle.

JPMorgan is leading the charge.

In early 2026, JPMorgan expanded its blockchain arm Kinexys’s JPM Coin to the Canton Network, enabling multi-chain interoperability. This isn’t a publicly traded stablecoin, but a “deposit token.”

Kinexys now handles over $3 billion in daily transactions, primarily serving multinationals like Siemens and BMW for rapid global subsidiary fund transfers.

JPMorgan’s logic is clear:

We don’t need to issue tokens on public chains to compete. We just need to keep our clients on private chains, using blockchain for efficiency—without losing control.

In Europe, Société Générale has gone even further. Its subsidiary SG-FORGE issued EURCV (euro stablecoin) and USDCV (dollar stablecoin)—the first stablecoins from a regulated bank on a public chain (Ethereum), now listed on compliant exchanges like Bitstamp.

However, it’s important to note that bank-issued stablecoins like JPM Coin and USDCV mainly serve corporate clients, not retail. They represent traditional finance adopting blockchain technology while maintaining centralized control.

Clear Stablecoin Trends

The 2026 stablecoin market reveals four clear trends:

RWA Tokenization Accelerates

BlackRock, Ondo, and Franklin Templeton are all issuing tokenized US Treasuries and money market funds. This sector exploded in 2025, growing more than 35x—from under $200 million at the start of 2024 to over $7.3 billion. Traditional finance is bringing Treasury yields on-chain.

Compliance Pathway Becomes Dominant

USDC’s 73% growth outpaced USDT for two years running. After the GENIUS Act, compliance is now the only real option for mainstream institutions. Circle’s backers include BlackRock, Fidelity, and other top firms. If Circle’s planned 2026 IPO succeeds, it will mark a major milestone for the stablecoin industry.

Payment Infrastructure Is Being Rebuilt

Stripe’s $1.1 billion Bridge acquisition, Visa’s USDC settlement launch, and PayPal’s PYUSD surging 600%—traditional payment giants are integrating stablecoins into their infrastructure, not just defending their turf. High-performance chains like Solana are becoming the go-to for enterprise payment applications.

Market Segmentation Intensifies

Stablecoins are no longer just about “stability.” The market is splitting into two distinct tracks:

• Payment stablecoins (USDC, PYUSD): Non-interest-bearing, compliance-backed, serving institutions and merchants
• Yield stablecoins (Ondo USDY, Ethena USDe): Offering 4–5% annualized returns, attracting DeFi capital

Conclusion

With BlackRock issuing on-chain funds, Visa settling in USDC, and JPMorgan clearing $3 billion daily, stablecoins are no longer just a “crypto” narrative—they’re the opening act in the restructuring of the global financial system.

This isn’t hype or theory. In 2025, total stablecoin transaction volume hit $46 trillion, with adjusted payment/settlement volume at $9 trillion—real money, real commerce.

The arrival of traditional financial giants signals that stablecoins are evolving from “crypto toys” into foundational global financial infrastructure. For market watchers, the key isn’t predicting the next hot trend—it’s understanding the underlying logic of this transformation.

Smart money has already made its move.

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1. This article is republished from [Plain Blockchain]; copyright belongs to the original author [Cathy]. For republication concerns, contact the Gate Learn team for prompt resolution.
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