Stablecoins: the next payment rail for global commerce

Gabriel Lucas, Director at Redbridge Debt and Treasury Advisory, talks about the key use cases for stablecoins in payments, why they matter, and what's next.

The payments industry often chases buzzwords before considering real, operational benefits. We saw it with Buy Now, Pay Later (BNPL) when we challenged the hype versus the actual value. Stablecoins are quietly moving through the same arc.

Stablecoins – context and definitions

First things first, a stablecoin is a digital token pegged to fiat currency, such as the US dollar or the euro, designed to maintain a stable value over time. Unlike volatile cryptocurrencies, the peg is maintained through reserves, which may include cash, cash equivalents, or short-term government debt. Security and reliability depend on the quality and transparency of reserves, the governance model, and regulatory oversight. Fully backed, regularly audited coins, such as USD Coin (USDC) and Pax Dollar (USDP), are generally considered among the most reliable due to published attestation reports and reserve holdings in short-term US Treasuries, although Tether (USDT) is used the most. Most regulators treat stablecoins as financial assets rather than as money – they become money only when converted into fiat. Here is the paradox: money was created to simplify the trade of assets, yet today, an asset, the stablecoin, is facilitating how money moves. In international commerce, this classification means they can move across borders without being treated as currency until conversion. For merchants, selling goods or services for an asset creates unique accounting considerations. Value is recorded at the time of the transaction, and changes before conversion may be taxable. Many convert to fiat immediately, but frameworks must evolve as adoption grows.

Economics and market entrants

The stablecoin ecosystem has gone from niche to massive. As of mid-2025, the total market capitalisation of stablecoins stood at USD 252 billion, with USDT holding around 68% market share (over USD 112 billion in circulation) and USDC following at roughly USD 64 billion.

How do stablecoin issuers profit from this activity? The core revenue driver is interest income from reserves. Tether’s Q4 2024 attestation reveals net profits of USD 13 billion, buttressed by over USD 113 billion in US Treasury holdings and a reserve buffer above USD 7 billion. Earlier in 2024, it reported USD 5.2 billion for the first half alone. Issuers also earn from fees, API licencing, and white-label services.

Traditional finance is aligning with stablecoins. J.P. Morgan’s JPM Coin, live for institutional settlement, enables 24/7 wholesale payments between clients. PayPal launched PayPal USD (PYUSD) in 2023, a fully fiat-backed stablecoin redeemable 1:1 and available on Ethereum and Solana. Visa and Mastercard are also piloting USDC-based settlement programmes on Ethereum and Solana, allowing merchants to receive USDC directly. However, profits rely on high rates, while liquidity mismatches or sudden redemptions could strain issuers. For merchants and PSPs, the challenge is integrating off-ramps and securing regulatory cover.

Key use cases for stablecoins in payments

Stablecoins prove their worth where speed, cost, and transparency matter most. For settlement, they bypass cutoff times and weekend delays, enabling a marketplace to pay a seller on Sunday and have funds available within minutes. In cross-border scenarios, this removes correspondent banks, cutting time and fees while improving visibility. This strengthens liquidity and reduces the need for pre-funding. In cross-border and volatile markets, stablecoins enable merchants to lock in value at the moment of payment, avoiding currency swings and, in some cases, earning yield until conversion. Compared to traditional FX channels, this brings stability in revenues and flexibility in cash flow while lowering conversion costs.

For low-value, high-frequency transactions, stablecoins make micropayments viable by removing the fee burden that undermines sub-dollar sales. With on-chain compliance, each transaction is traceable in real time, giving regulators, merchants, and consumers clearer visibility and faster reconciliation. Emerging sectors highlight the edge: digital content platforms experiment with sub-dollar tips, ride-hailing apps pilot instant driver payouts, and corporates test treasury sweeps across subsidiaries. These cases show the shift from theory to practice.

Why it matters and what’s next?

According to McKinsey, tokenized cash can reduce operational risk, accelerate settlement, and improve liquidity when integrated into institutional systems. Legislative frameworks such as the GENIUS Act in the US and MiCA (Markets in Crypto-Assets Regulation) in the EU are providing clearer rules on issuance, redemption, and compliance – the kind of certainty needed for scale. The cross-border market is where stablecoins could deliver the most immediate impact, replacing multi-day, high-cost transfers with near instant, low-fee, and fully auditable transactions on transparent ledgers. For merchants and payment providers, they offer faster settlement, reduced FX exposure, and new billing models without overhauling infrastructure. For issuers and financial institutions, they offer a scalable product with recurring yield from reserves, creating a new profit centre in payments.

The next frontier is programmability. If stablecoins embed tax calculation, invoice matching, or ESG tagging at the transaction level, they move from being just cheaper rails to becoming a value-added infrastructure. That is where merchants, banks, and regulators will need to collaborate – not just to move money faster, but to move it smarter.

If adoption continues its current trajectory, stablecoins could become a default settlement method in global trade, a liquidity tool for corporates, and a new compliance benchmark in regulated payments. I truly believe that those who integrate early, align with regulations, and solve merchant challenges will shape the next generation of payment infrastructure.

This editorial piece was first published in The Paypers' Global Ecommerce Report 2026, which provides a complete overview of key trends and strategies to help businesses worldwide succeed. Download your free copy today to explore in-depth insights on global ecommerce trends, the latest innovations in payment solutions, and strategies to stay ahead in a competitive market.

About the author

Gabriel Lucas heads the European payment practice at Redbridge, advising global merchants on payment transformation and optimisation since 2020. Previously, he served as Chief Operating Officer at a France-based Electronic Money Institution specialising in digital wallets and alternative payment methods.

 

 

About Redbridge

Redbridge Debt and Treasury Advisory is a leading financial management partner to corporations around the globe. It is committed to providing each client with all the information required to make the best decisions and optimise their financial performance. Redbridge’s teams are located in Houston, New York, Chicago, Paris, Geneva, and London.