Stablecoins Become Default for Internet Payments as Adoption Surges

Alchemy's Engineering Lead, Noam Hurwitz, has highlighted the rapid adoption of stablecoins, which are increasingly becoming the default settlement layer for internet payments. This shift is evident as major companies like PayPal and Stripe integrate stablecoins into their systems, leveraging on-chain infrastructure for faster and cheaper transactions. Alchemy, a key player in this transformation, provides infrastructure to some of the largest stablecoin ecosystems, supporting stablecoin flows for financial giants such as Visa, Stripe, Circle, and PayPal.

The appeal of stablecoins lies in their ability to make money transfers cheap, fast, global, and secure. This has led to their broad adoption across various sectors, including cross-border payments and prediction markets. Stablecoins have also become significant buyers of US Treasurys, with Tether (USDT) alone generating substantial profits while holding a considerable amount of US debt. Hurwitz emphasized that tokenized money is the foundation of the tokenized financial system, driving recent financial innovations.

Despite their growing prominence, stablecoins face challenges due to the fragmented blockchain landscape. Institutions seeking to move quickly must assess provider reliability and counterparty risks, especially in an emerging industry. Hurwitz cited Kinexys, a tokenized bank deposit launched by JP Morgan, as a significant milestone. This permissioned deposit token allows institutional clients to access yield-bearing deposits on a public blockchain with 24/7 settlement and near real-time liquidity.

The regulatory landscape for stablecoins is becoming clearer with the recent passage of the GENIUS Act, which establishes federal guardrails for stablecoins. This legislation benefits established financial players while encouraging innovation. However, technical bottlenecks remain, as companies seek to decouple the user experience from the underlying technology, requiring deep technical expertise.

Looking ahead, Hurwitz expects most financial services to deploy their own blockchains, particularly layer 2 networks, to better scale and monetize their ecosystems. Infrastructure improvements are anticipated to drive seamless cross-chain interoperability, enabling a more connected and efficient financial system built on stablecoins. Despite these optimistic views, a recent report from the Bank for International Settlements challenges the notion that stablecoins can serve as money in a modern financial system, describing them as digital bearer instruments that resemble financial assets more than actual money.