Stablecoins Remain Little Used for Payments

Why It Matters

Stablecoins remain underutilized for everyday payments, limiting their potential to streamline cross‑border and B2B transactions. Regulatory clarity and corporate adoption could unlock a sizable new layer of digital finance.

Key Takeaways

• Stablecoins $300.5B market, 48.8% used for trading
• Only 0.7% of stablecoins serve payments
• 21.2% of stablecoins sit idle
• PayPal launched stablecoin in 68 countries
• GENIUS Act could expand stablecoin payment use

Pulse Analysis

The stablecoin ecosystem, now valued at roughly $300 billion, is dominated by a trading function. Federal Reserve data shows that almost half of all tokens act as liquidity or collateral for crypto exchanges, while a modest 29% support fund transfers for corporate treasuries. Yet a striking 21% of the supply is effectively dormant, underscoring a mismatch between market capitalization and real‑world utility. This concentration in speculative and liquidity roles limits the technology’s impact on traditional finance.

Regulatory developments are beginning to shift that balance. The GENIUS Act, signed into law in 2025, establishes a clear legal framework for stablecoin issuers and users, addressing compliance, consumer protection, and anti‑money‑laundering concerns. The Kansas City Fed’s analysis suggests that this clarity could gradually lift the 0.7% payment share, as firms gain confidence to integrate stablecoins into payroll, remittances and B2B settlements. However, awareness remains low—only about 12% of U.S. consumers recognize stablecoins—so education and transparent standards will be critical for broader adoption.

Corporate players are already testing the waters. PayPal’s rollout of its own stablecoin across 68 countries, alongside participation from Mastercard and Fiserv, helped push total stablecoin transaction volume to $1.78 trillion in February, more than double the figure a year earlier. These pilots demonstrate that, when paired with established payment networks, stablecoins can deliver faster, cheaper cross‑border flows. As the market is projected to grow to $434 billion by 2028, the convergence of regulatory certainty and strategic partnerships is likely to expand the payment use case, turning stablecoins from a niche trading tool into a mainstream financial instrument.