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The Rise of Stablecoins: What TradFi Institutions Need to Know in 2025

  • Writer: Harsim Ranjit Singh
    Harsim Ranjit Singh
  • Jun 4
  • 4 min read

Updated: Jun 13

June 5, 2025 | Payments | Crypto | By Harsim Ranjit Singh


Stablecoin adoption has surged over the past two years, transforming digital assets from a niche tool into a mainstream financial instrument. As of early 2025, USD-pegged stablecoins surpassed a $220 billion market cap – over 1% of the U.S. money supply (M2) – after roughly 60% year-to-date growth1. Daily transactions in stablecoins are soaring: total stablecoin transfer volume reached $27.6 trillion in 2024, overtaking the combined volumes of Visa and Mastercard2. This explosive growth signals that stablecoins are now a foundational part of the financial ecosystem, not just for crypto traders but for institutions worldwide.


Why are stablecoins rising so rapidly?


For one, they fill a demand for instant, 24/7 dollar liquidity in a digital form. In 2024, stablecoins accounted for nearly half of all transactions on Fireblocks (an institutional crypto platform), representing 15% of global stablecoin volume3. Speed and efficiency are key drivers. In a recent survey of ~300 banks and payment providers, 48% cited real-time settlement as the number-one advantage of stablecoins (far above cost savings)3. For example, Worldpay found that using stablecoins cut settlement times by 50% compared to traditional methods3. Institutions see this speed as a growth lever: a faster way to move money and unlock liquidity across markets.


Institutional adoption of stablecoins is accelerating in 2025


A striking 86% of TradFi firms report their infrastructure is now ready to handle stablecoin flows (wallets, APIs, compliance tools, etc.)3. This reflects the significant investment banks and fintechs have made to integrate digital assets. It’s no longer a question of “if” stablecoins can be used, but where to deploy them first. Use cases span cross-border payments, on-chain settlement for trades, treasury management, and access to decentralized finance (DeFi) yields. Family offices and hedge funds are also jumping in: as of January 2025, 86% of surveyed institutional investors either already have exposure to digital assets or plan to allocate to them this year, with stablecoins viewed as a convenient entry point4. Even money market giants are integrating stablecoins – Franklin Templeton’s $600M tokenized government money fund now allows direct USDC funding of shares5, marrying the stability of a dollar fund with the on-chain liquidity of a stablecoin.


Regulation is turning from a barrier into a tailwind


In 2023, regulatory uncertainty kept many banks on the sidelines. But by mid-2025, 85% of institutions see new crypto rules as “green lights” rather than red tape3. The tone has shifted dramatically. In North America, 88% now view regulatory clarity as enabling stablecoin adoption rather than inhibiting it3. This optimism is fuelled by concrete developments: the U.S. Congress is advancing comprehensive stablecoin legislation, and Europe’s MiCA framework is in place, providing clear standards on reserve quality, issuance, and supervision. Global stablecoin oversight is strengthening, which paradoxically makes traditional institutions more comfortable embracing them. For instance, the U.S. Senate’s proposed GENIUS Act would mandate robust reserves, audits, and disclosure for issuers, and reaffirm the dominance of the U.S. dollar in digital form6. Such measures give TradFi players confidence that stablecoins can be used safely under proper supervision.


Finally, stablecoins are aligning with macroeconomic interests in a way that TradFi cannot ignore. As Outlier Ventures notes, U.S. dollar stablecoins now constitute a new class of large Treasury buyers – in fact, stablecoin issuers collectively hold enough U.S. T-bills to rank among the top 20 global holders1. This offers strategic opportunities: policymakers increasingly recognize that private dollar stablecoins can help extend dollar influence globally and deepen demand for U.S. debt1. The White House’s emerging stance (under a new administration) explicitly prioritizes dollar-backed stablecoins to safeguard the dollar’s global role, while casting a skeptical eye on central bank digital currencies (CBDCs)7.


Stablecoins in 2025 are no longer a crypto experiment – they are a $200+ billion asset class and growing, underpinning trillions in transactions. TradFi institutions need to understand that stablecoins are becoming the digital liquidity layer of global finance. From enabling lightning-fast cross-border settlements to integrating with capital markets, stablecoins present both a competitive opportunity and, if ignored, a competitive threat. Those banks, asset managers, and payment firms that leverage stablecoins as a tool for faster settlement, broader client reach, and new product offerings (like on-chain yield) are positioning themselves at the forefront of finance’s next evolution. In short, stablecoins have risen – and TradFi must rise to the occasion by embracing the trend or risk falling behind8.





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