The Impact of Stablecoins on Fintech Innovation

I'm getting more excited about stablecoins the more I learn about them. Not because of crypto hype, but because of the real business applications I keep seeing. Last week's Supra session with three industry leaders opened my eyes to just how fast this space is moving: ↳ Ben Reid (Head of Stablecoins, Bitso) ↳ Avinash Chidambaram (Founder & CEO, Cybrid) ↳ Alex McDougall(President, Stablecorp Inc.) Here's what's got my attention: 1/ The cost arbitrage is massive Traditional cross-border payments cost 4-5% and take days. Stablecoins do the same thing for ~10 basis points in real-time. That's not incremental improvement - that's 90% cost reduction with instant settlement. Alex shared an example: Brazilian students paying Canadian tuition through stablecoin rails instead of international wire transfers. 2/ Real-world infrastructure is already here This isn't theoretical anymore. Bitso processes cross-border payments across Latin America using peso stablecoins. Cybrid provides APIs that let any fintech embed stablecoin payments. Major wireless carriers are exploring real-time settlements for roaming charges - eliminating billions in reconciliation overhead. 3/ AI agents + instant payments = new business models The most fascinating use case: AI agents making authorized payments based on business logic. Your ERP detects low inventory → AI gets CFO approval → payment executes → supplier ships immediately. No more "we'll start manufacturing once your wire clears in 3-5 days." 4/ Regulatory clarity is accelerating adoption The GENIUS Act and similar frameworks are giving enterprises confidence to integrate this technology. Banks are now asking stablecoin companies to help them issue deposit tokens. JP Morgan has their own consortium working on this. 5/ Global harmonization advantage Unlike traditional rails that require different systems in each country, stablecoins work identically everywhere. Build your payment infrastructure once, deploy it globally. This is why every fintech is becoming a crypto fintech - whether they realize it or not. The tipping point feels closer than I expected. What stablecoin applications are you most excited about?

The U.S. has just signed the GENIUS Act into law — its first federal framework for stablecoins in the US — and with it, the groundwork has been laid for what may become the most significant transformation of financial infrastructure in decades. This is not just a regulatory update. It’s a signal. The world’s most powerful financial system has now recognized that money no longer has to be tied to the plumbing of 20th-century banking. Fully reserved, on-chain, and programmable digital dollars — once seen as a fringe idea — now have a federally sanctioned legal perimeter. If this is implemented as intended, it won’t just reshape the U.S. market. It will ripple across global capital flows, deposits, and trade. In time, it could make stablecoins the new baseline for holding and moving dollars — at perhaps the expense of traditional bank deposits, especially in markets where trust in domestic banking is weak. What the Act does is simple but transformational: it creates legal space for fully reserved, dollar-backed digital assets to function as programmable, compliant infrastructure — with clear rules on who can issue them, how reserves are held, and how they operate within both U.S. and cross-border financial systems. But the implications are global. This isn’t just about domestic finance — this is about how value moves across borders, how deposits evolve, how banks reorient, and how trust is engineered into financial rails. We’re watching a shift from closed, proprietary banking systems toward open, composable monetary layers — with compliance and control baked in. The long-standing illusion that all dollars are created equal — whether sitting in a global bank or trapped in a local one — starts to fracture here. More importantly, it lays the foundation for a future where dollar liquidity can flow with the precision and compliance of code — across borders, platforms, and financial hierarchies. This could be the beginning of the end for the traditional concept of bank deposits as we know it. The age of programmable money is beginning. #GENIUSAct #DigitalDollar #Stablecoins #MonetaryInfrastructure #ProgrammableMoney #Banking #CrossBorderPayments #EmergingMarkets #Policy #SystemicShift https://lnkd.in/dUBdP7jQ

The regulatory ambiguity is over. Stablecoins are no longer crypto assets. They're a dollar-delivery technology with federal oversight. David O. Sacks, in this video, outlines the strategic implications of the act by clearly stating: "It will extend US dollar dominance." How? The GENIUS Act mandates stablecoin backing through US Treasuries. Previously, regulatory ambiguity in the US had driven stablecoin activity offshore, to less-regulated venues, even as US adoption surged. With $200 billion already in circulation and "trillions of dollars of demand" projected, this act should expand Treasury demand and, in turn, lower American borrowing costs while strengthening the dollar's status as a reserve currency, vital to our national interests. Countries experiencing monetary instability are already gravitating toward the dollar, and now, regulated US stablecoins have the potential to become their preferred alternative. What does this mean for startups and VC? The direct stablecoin issuance game is over for most startups. The GENIUS Act restricts issuance to federally regulated banks, OCC-licensed entities, and state-chartered institutions, all of which require substantial capital and compliance infrastructure that most startups lack. But this creates massive infrastructure opportunities. Banks and licensed entities need fintech solutions for payments, custody, compliance monitoring, and cross-border settlement. The regulatory clarity means institutional demand for these services has just exploded. Smart money will pivot from "building the next stablecoin" to "building for the institutions that can issue stablecoins." The picks-and-shovels play has become a serious game in town for most of the crypto industry.

Huge news: Congress just passed the GENIUS Act. It’s headed for a presidential signature and likely to become law by August. This legislation introduces a formal structure and clear lines in the sand for US-backed stablecoins. For the first time, digital dollars will operate under a federal framework. Compliance will take time, but the direction is locked in. This moment matters because it defines who gets to issue programmable money at scale. Not every company will be ready right away. Those with the infrastructure, capital, and tolerance for scrutiny are already moving. Retail giants see the opportunity. A private-label payment rail reduces interchange fees, accelerates settlement, and gives brands a direct line to customer behavior. Once integrated, stablecoins won’t feel novel. They’ll feel normal. The implications for loyalty programs and ownership are massive. Think of it as store credit with superpowers—immediately usable, automatically personalized, and portable across apps. The same token that earns customers rewards could just as easily be used to buy shares of the brand itself. The next bill, the CLARITY Act, will address crypto market structure more broadly. It’s advancing through the Senate now and expected to pass this summer. Policy is catching up to product. The institutions paying attention today will shape the system that follows. #Stablecoins #Payments #DigitalAssets #FintechLaw #DealMaker #GENIUSAct #CLARITYAct

Missed this week’s stablecoin headlines? Start here ⬇️ We’re at the start of a major shift in the global financial system. Stablecoins are no longer optional for fintechs, banks, and global corporates. They’re a strategic necessity. Success will hinge on how quickly firms understand the landscape and adapt. This week’s long reads offer exactly the clarity and context needed to get up to speed. In the latest edition of 𝗧𝗵𝗲 𝗪𝗲𝗲𝗸𝗹𝘆 𝗦𝘁𝗮𝗯𝗹𝗲 we cover: • The Historic signing of the GENIUS Act • Western Union’s stablecoin opportunity • PayPal World’s distribution first cross border payments strategy • Product launches, partnerships and regulatory news from BitGo, Charles Schwab, Ethena Foundation, Ondo Finance, Perena, Polymarket, Telegram Messenger, WisdomTree and more. 📚 𝐄𝐬𝐬𝐞𝐧𝐭𝐢𝐚𝐥 𝐖𝐞𝐞𝐤𝐞𝐧𝐝 𝐑𝐞𝐚𝐝𝐬: • In 𝗧𝗵𝗲 𝘀𝘁𝗮𝗯𝗹𝗲 𝗱𝗼𝗼𝗿 𝗼𝗽𝗲𝗻𝘀: 𝗛𝗼𝘄 𝘁𝗼𝗸𝗲𝗻𝗶𝘇𝗲𝗱 𝗰𝗮𝘀𝗵 𝗲𝗻𝗮𝗯𝗹𝗲𝘀 𝗻𝗲𝘅𝘁-𝗴𝗲𝗻 𝗽𝗮𝘆𝗺𝗲𝗻𝘁𝘀, Matthew Higginson, Partner at McKinsey & Company, provides a strategic primer on the evolving stablecoin landscape that explains how regulatory clarity, institutional demand, and maturing infrastructure are driving adoption—an accessible and data-rich starting point for newcomers seeking to understand why stablecoins matter and how they challenge legacy payments. • In 𝗚𝗟𝗢𝗕𝗔𝗟 𝗦𝗛𝗜𝗙𝗧: 𝗚𝗘𝗡𝗜𝗨𝗦 𝗔𝗰𝘁 𝗣𝗔𝗦𝗦𝗘𝗦, 𝗥𝗲𝗱𝗲𝗳𝗶𝗻𝗲𝘀 𝗘𝗩𝗘𝗥𝗬𝗧𝗛𝗜𝗡𝗚, Austin Campbell of Zero Knowledge Consulting argues that the GENIUS Act marks a transformative bipartisan milestone for U.S. financial regulation—ushering in regulated stablecoins that realign incentives for banks, payments firms, asset managers, and consumers, while destabilizing incumbents like Tether, Circle, and legacy institutions unable to adapt. • Messari's latest stablecoin report: 𝗦𝘁𝗮𝘁𝗲 𝗼𝗳 𝗦𝘁𝗮𝗯𝗹𝗲𝗰𝗼𝗶𝗻𝘀 𝗝𝘂𝗹𝘆 𝟮𝟬𝟮𝟱 • 𝗚𝗘𝗡𝗜𝗨𝗦 𝗔𝗰𝘁 𝗯𝗿𝗶𝗲𝗳𝗶𝗻𝗴 𝗱𝗼𝗰𝘂𝗺𝗲𝗻𝘁𝘀 from EY-Parthenon & Deloitte The Weekly Stable is brought to you by This Week in Fintech and Stablecon

The US just passed its first-ever federal crypto law. The GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins) was signed into law on Friday. This is the first time stablecoins have clear national rules in the US. === What's a stablecoin? === Stablecoins are digital dollars designed to maintain a 1:1 peg with fiat currency. They combine the stability of the dollar with the speed, accessibility, and programmability of crypto. Today, over $250 billion worth of stablecoins are in circulation, and the market is growing fast. === Why this law matters === The GENIUS Act gives stablecoins a legal foundation and sets clear rules for how they're issued and managed: - Requires 1:1 backing with US dollars or 3-month Treasuries - Mandates monthly reserve disclosures and annual audits for large issuers - Enforces KYC/AML compliance - Provides legal protections for customers if an issuer fails === Why this is a turning point === - Global access to digital dollars (available to anyone with internet) - Confidence for banks, fintechs, and institutions to build on stablecoin rails - Reinforces USD strength in a digital, onchain economy Just yesterday, I spoke with the Chief Business Architect of a regional bank who sees stablecoins as a strategic threat & opportunity. His words: “Most banks are 'deer in the headlights.' Borders are going away. All value will be in internet-based wallets." No wonder that every bank is scrambling to figure out its stablecoin strategy ASAP. === Bottom line === The GENIUS Act brings cryptocurrency into the regulatory mainstream. It lays the foundation for stablecoins to power payments, payroll, remittances, and onchain treasury management, positioning the future of money onchain. Where do you see stablecoins gaining the most traction first?

Simply Genuis The GENIUS Act establishes the U.S. as epicenter for Stablecoins, cementing its role in the global financial system as we enter the digital age. This legislation sets the regulatory framework that legitimizes digital assets with a legal and formative foundation for digital assets, while reversing the repressive framework that limited financial institutions participation and put digital asset investors at greater risk. This act signed into law by super-majority with over 100 Democrats joining their Republican colleagues to pass the bill that paves the way for innovation, fosters trust, and positions the U.S. as the epicenter of the next financial revolution. Paul Atkins, the new SEC Chair helped reverse measures put in place by Gary Gensler and other members of the prior administration whose goal was to kill digital assets. Stablecoins have a market capitalization exceeding $150 billion and now it is set to grow rapidly. Treasury Secretary Scott Bessent says Stablecoins will create trillions in demand for short-term UST since every dollar in stablecoin must maintain 100% reserve backing with short-term, high-quality liquid assets, such as UST bills. Secretary Bessent further stated that this legislation will “expand US dollar usage via these stablecoins all around the world." The Act requires monthly audits, and best practices for AML/KYC rules. By establishing clear, balanced regulations, entrepreneurs feel free to innovate utilizing blockchain technology. Stablecoins will ultimately reduce costs for businesses and consumers, as citizens around the world can transact instantaneously with minimal friction. Blockchain technologies will power the next generation of payments, as the U.S. dollar comes on-chain. Will we see a “Walmart Coin," a “JPMorgan Coin?" Will the payment rails begin to move away from Visa and MasterCard? The American Bankers Association (ABA) warned that banks avoiding stablecoins risk losing customer deposits to fintech companies or other banks issuing stablecoins, i.e., cross-border payments or remittances. Other major currencies such as the Euro and the Yen will move towards a stablecoin architecture as there are strong use cases to drive efficiency gains and cost savings. Beneficiaries: USDC, Coinbase and other exchanges (Kraken), Banks who now have a green light to trade and custody digital assets, or issue their own stablecoin, while PayPal and select fintech companies should also benefit. Bankruptcy laws are also favorable for stablecoin holders since the law states that stablecoin holders must be paid if front of other creditors. As a credit investor focused on principle protection, an important feature of stablecoins is they are 1:1 backed by treasuries and other liquid assets. What other assets will move on to the blockchain for efficiency, transparency, and cost savings? We are already seeing mortgages and notably, a major credit manager has raised >$100m for Private Credit on the blockchain.

This week, the GENIUS Act passed on a bipartisan basis and was signed into law. GENIUS creates a framework for how we can use and issue stablecoins in the US. A lot of my friends are crypto skeptics, but if you care about a more accessible financial system and a stronger dollar, you should care about stablecoins. This is a monumental change in how money will move globally and an opportunity to re-entrench the dollar as the world’s reserve currency. Here are some implications of a new stablecoin regulatory regime: Cheaper, faster remittances: 10% of remittances from the US to Mexico are already in stables. Stablecoins cut out high middlemen fees and make it simpler to reach family members who don’t have easy access to a Moneygram location or bank, and send them money 24/7. Cross-border/global payments: Uber and Airbnb are exploring stablecoins to simplify global payouts, making it faster and cheaper for gig-workers and freelancers to access their earnings. Nonprofits and NGOs like Mercy Corps and the World Food Program are exploring stablecoins to make it easier to move money between offices in different countries, cutting operational overhead and making it faster to deliver funds where they’re needed most. Increasing global access to and reliance on dollars: As Americans, we’re privileged to have never experienced serious currency volatility. Countries like Turkey and Argentina have some of the highest stablecoin adoption rates in the world, because people use USD-pegged stablecoins as a savings mechanism and a protection against volatility. (Stablecoin purchases in Turkey represent 3.7% of GDP). GENIUS helps ensure that the dollars they hold are truly worth real dollars, helping maintain US-dollar dominance - critical for American national and economic security. TLDR: Don’t let your crypto skepticism let you ignore the impact of stablecoins on the global economy or American security. No bill is perfect, but we often spend too long letting the perfect be the enemy of the good when it comes to tech regulation. Stablecoin legislation is a long overdue step in helping us lead the world in technology, establish clear rules for stablecoin issuance, and create a more open, accessible financial system. (A good read on stables adoption in emerging markets, if you're curious: https://lnkd.in/eAy5r4DN)

I had the privilege of participating in the latest article from PYMNTS which makes it clear: stablecoins are no longer theoretical, they’re becoming central to the payment strategies of institutions like Citi and JPMorgan. With the CLARITY and GENIUS Acts providing long-awaited regulatory momentum, the conversation is shifting from if stablecoins will be adopted to how fast they can be scaled and made interoperable. Key takeaways: • Major banks now see stablecoins as core infrastructure • Regulatory clarity is accelerating enterprise adoption • There’s increasing demand for universal, interoperable platforms • Stablecoins are evolving beyond crypto into real-time, programmable financial rails

The GENIUS Act becomes U.S. law – a game-changer for stablecoins & crypto innovation! On July 18, 2025, President Trump signed the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins), marking the first comprehensive U.S. federal law directly regulating stablecoins (plus a great acronym). What the Act does: Requires 1:1 backing with U.S. dollars or short-term Treasuries, monthly reserve disclosures, and annual audits for large issuers Creates a licensing regime: federal (via OCC/Fed/FDIC) or certified state-charter paths for “permitted payment stablecoin issuers” Exempts payment stablecoins from being classified as securities or deposits, while reinforcing AML/sanctions rules under the Bank Secrecy Act Prioritizes stablecoin holders in insolvency events, placing them ahead of other creditors Why it matters: Boosts adoption: Lowers transactional friction and builds business/consumer confidence; major brands like Walmart and Amazon are exploring stablecoin use Levels the playing field: Traditional banks, fintechs, and crypto-native issuers now have a clear, regulated path Dollar dominance & liquidity: Treasury-backed reserves could strengthen dollar demand. Critics warn about possible strains on the Treasury market in mass redemptions Winners and losers: Circle/USDC may lead the pack under new transparency rules, but opaque issuers like Tether face pressure to adapt or exit the U.S. Industry Impact: Regulatory clarity enables stablecoins to serve as true payment rails: fast, global, 24/7. This means disrupting legacy payment networks Institutional integration: Financial firms can embed stablecoins into capital markets, lending, treasury services, and cross-border remittances Future-focused innovation: Opens doors for tokenized assets, programmable money, and decentralized finance within a legal framework. My take: The GENIUS Act is a watershed moment. Stablecoins are no longer legal grey zones. They now have a path to legitimacy, but with significant compliance obligations and systemic risks to manage. Expect a wave of institutional momentum, innovative use-cases, and fresh regulatory moves to define the next chapter of DeFi and digital payments. Let's go!