Stablecoins are rapidly emerging as the backbone of internet payments, surpassing traditional giants like Visa and Mastercard in onchain transaction volume. Noam Hurwitz, head of engineering at Alchemy, mentioned that stablecoins are becoming the “default settlement layer for the internet,” thanks to their ability to provide fast, cheap, and secure transactions globally. This shift marks a pivotal moment in how money moves online, with stablecoins increasingly adopted by major financial players and fintech innovators alike.
The Rise of Stablecoins in Payments
Hurwitz highlighted the “explosive” adoption of stablecoins, noting their growing dominance over traditional card networks. In fact, stablecoins now exceed Visa and Mastercard’s onchain transaction volume by 7%. Companies like PayPal and Stripe are integrating stablecoins into their platforms to leverage blockchain infrastructure, enabling faster settlements and reduced costs compared to legacy systems.
As a leading provider of blockchain infrastructure, Alchemy plays a central role in this transformation. Hurwitz revealed that Alchemy powers stablecoin flows for major players such as Visa, Stripe, Circle, and PayPal, and serves as the onchain provider for Robinhood Wallet. These partnerships underscore the growing reliance on stablecoins for modern financial operations.
Why Stablecoins Are Gaining Traction?
Stablecoins offer several advantages that make them ideal for internet-based transactions. Hurwitz emphasized that they enable money to be transferred “cheaply, quickly, securely, and globally.” These features have led to widespread adoption across industries, including cross-border payments and prediction markets like Polymarket.
Additionally, stablecoins have become significant buyers of U.S. Treasurys. For instance, Tether generated $13 billion in profits last year while holding approximately $113 billion in U.S. debt. Hurwitz described tokenized money as the foundation of a broader tokenized financial system, calling recent innovations built on this framework “exciting.”
Challenges in Adoption
Despite their rapid growth, stablecoins face challenges stemming from the fragmented nature of blockchain ecosystems. Hurwitz noted that institutions eager to adopt stablecoins must carefully assess provider reliability and counterparty risks, particularly in this nascent industry.
“Can a small startup really support enterprise-grade operations while building and scaling the services they need?” he questioned.
This concern highlights the importance of robust infrastructure and regulatory clarity to ensure stablecoin adoption continues smoothly.
One notable milestone is Kinexys, a tokenized bank deposit launched by JP Morgan. This permissioned deposit token allows institutional clients to access yield-bearing deposits on a public blockchain, offering “24/7 settlement, near real-time liquidity, and the potential to pay interest to holders.” Such innovations demonstrate the evolving role of stablecoins in institutional finance.
Regulatory Clarity Boosts Confidence
The recent passage of the Guiding and Establishing National Innovation for US Stablecoins (GENIUS Act) by the U.S. Senate is a landmark development. Hurwitz explained that this bill establishes federal guardrails for stablecoins, providing clearer regulations that benefit both established financial players and innovators.
“With the recent passage of the GENIUS Act, the regulatory landscape is becoming clearer and more structured, which encourages innovation while protecting consumers,” Hurwitz said.
This regulatory progress is expected to further boost confidence in stablecoins as a viable payment solution.
Technical Challenges and Future Outlook
While stablecoins have seen remarkable growth, technical bottlenecks remain. Hurwitz pointed out that companies want to decouple the user experience from the underlying blockchain technology, but achieving this requires deep technical expertise.
Looking ahead, he predicts that most financial services will deploy their own blockchains—particularly layer 2 networks —to scale and monetize their ecosystems. Infrastructure improvements will drive “seamless crosschain interoperability,” creating a more connected and efficient financial system powered by stablecoins.
Criticism from the Bank for International Settlements (BIS)
Despite Hurwitz’s optimistic outlook, a recent report from the Bank for International Settlements (BIS) challenges the notion that stablecoins can serve as money in a modern financial system. The BIS Annual Economic Report 2025 claims stablecoins fail critical tests of singleness, elasticity, and integrity. The BIS describes stablecoins as “digital bearer instruments” that resemble financial assets more than actual money.
This critique highlights ongoing debates about the role of stablecoins in the global economy. However, proponents argue that their utility and adoption speak for themselves, with real-world use cases continuing to expand.
Conclusion
Stablecoins are undeniably reshaping the way money moves across the internet, with their adoption surpassing traditional payment networks like Visa and Mastercard. As Alchemy’s Hurwitz noted, they are becoming the “default settlement layer for the internet,” offering unparalleled speed, security, and cost-efficiency.
With regulatory frameworks like the GENIUS Act providing clarity and technological advancements driving scalability, stablecoins default settlement layer are poised to play an even greater role in the financial ecosystem. While challenges remain, their potential to revolutionize payments and foster a more connected global economy is undeniable.
For businesses, developers, and policymakers, understanding the transformative power of stablecoins is essential to navigating the future of finance.
