Stablecoins Become Core Market Plumbing in Moody's 2026 Outlook

Stablecoins are increasingly becoming foundational infrastructure in the global financial system. Recent developments show that regulated stablecoins are being integrated into traditional workflows. This shift is supported by clearer regulatory frameworks and broader adoption across both traditional and crypto-native institutions.

In 2025, the U.S. passed the GENIUS Act, a federal framework for dollar-backed stablecoins. The law imposed reserve requirements, audit standards, and supervisory pathways, repositioning stablecoins as regulated financial infrastructure. Similar regulatory clarity in the UK and Europe is also driving innovation in tokenized payments and settlement.

Banks like Lloyds and Barclays are investing in tokenized money solutions. Lloyds completed the UK’s first gilt purchase using tokenized deposits, while Barclays invested in Ubyx, a firm developing clearing systems for tokenized money. These developments highlight how traditional financial institutions are adapting to the new crypto landscape.

Why Did This Happen?

Regulatory clarity in 2025 played a key role in legitimizing stablecoins. Before the GENIUS Act, stablecoin issuers operated in a regulatory gray area, exposing them to volatility and uncertainty. Now, with reserve transparency and federal oversight, stablecoins are seen as a reliable medium for payments and settlements.

The collapse of TerraUSD in 2022 highlighted the risks of unregulated stablecoins. The GENIUS Act addressed these concerns by requiring 1:1 reserves and regular audits. These changes have made stablecoins more attractive to institutional investors and traditional banks.

How Did Markets React?

Market participants are embracing tokenized finance. a16z and Coinbase have both identified stablecoins as a key theme for 2026. a16z noted that stablecoins already recorded $46 trillion in transaction volume in 2025. They are now focusing on improving on-ramps and off-ramps to connect digital assets with traditional financial systems.

Coinbase’s research also points to stablecoins as a central infrastructure element. The firm predicts that stablecoins will play a larger role in delivery-vs-payment (DvP) structures and tokenized collateral will be recognized more broadly. This could drive further institutional adoption and integration with legacy systems.

What Are Analysts Watching Next?

Analysts are closely monitoring the development of on-chain financial infrastructure. Liquid Capital’s founder Daniel Li stated that 2026 marks the first year of on-chain finance, with stablecoins and Ethereum as key infrastructure. WLFI is positioning itself to become a major player in the $30 trillion stablecoin market.

DeFi projects are also preparing for mainstream adoption. Mutuum Finance, a decentralized lending protocol, is nearing its V1 protocol release after raising nearly $20 million. The project has outlined a clear roadmap, including a testnet deployment and security audits, which are important milestones for DeFi credibility.

Investors are also watching regulatory developments in 2026. The U.S. created a federal “Crypto Czar” in 2025 to coordinate policy. Similar efforts in the UK, Singapore, and the EU suggest that global stablecoin frameworks will continue to evolve, influencing cross-border transactions and settlement processes.

Stablecoin issuance is also expanding. Circle’s Arc platform supports regulated payments and tokenized markets via USDC. Tether-aligned Stable launched with $28 million in funding, using USDT as a gas token to reduce fee volatility. These developments indicate growing institutional confidence in stablecoin-backed systems.

As stablecoins gain regulatory legitimacy, they are being integrated into everyday financial systems. New providers are connecting stablecoins directly to local payment rails, cards, and bank-to-bank systems. This integration is helping to bridge the gap between digital and traditional finance.

Overall, 2026 is shaping up to be a pivotal year for stablecoins. With regulatory clarity, institutional participation, and technological innovation, stablecoins are becoming a core component of global financial infrastructure.