An Overview of Current and Future Battleground in Stablecoin Payments

Stablecoins have moved from being a crypto-native use case into one of the most contested payment infrastructure markets in fintech. Stablecoin adoption has accelerated meaningfully, with total supply rising by more than 56% since the start of 2025 to reach $322 billion. At the same time, annualized adjusted stablecoin transaction volume in 2025 reached $10.79T, almost doubling 2024’s volume and rivalling traditional payment rails like Visa and Mastercard. While stablecoin utilities need no further validation in real world payments, it is premature to think the industry has reached its prime. Just looking at global B2B payments today, the number stands at roughly $1.6 quadrillion which is 149x larger than today’s stablecoin volume. Beyond stablecoins, CBDCs, tokenized deposits, interbank settlement networks, and institutional blockchain payment rails are all converging around the same objective: modernizing how money moves across borders, institutions, merchants, and consumers. Therefore, modernizing legacy financial infrastructure has been a key funding theme since 2025 with a significant amount of capital being deployed across various infrastructural stacks of blockchain payments such as: blockchain, fiat/crypto on/off ramp, wallet infrastructure, payment processing, and card infrastructure. Funding for blockchain payments has also reached close to $4B over the past year. However, the uneven distribution of capital highlights that the battleground of blockchain payments is gravitating toward those who control distribution, possess regulatory edge, and establish strategic market positioning that form durable competitive moats.

Capital Allocation Over The Past Year

Source: CB Insights

The first major funding cluster is stablecoin settlement and payouts. This category attracted $1.29B in equity funding over the past year across 23 deals, the most within the payment industry accompanied by the fastest annual growth of 437.9%. This is important because settlement and payouts are where stablecoins become practical payment infrastructure. Companies in this category include Bridge, Ripple, Circle, ZeroHash and 1Money Network which help users and businesses move money across borders, pay suppliers, while managing fiat-to-stablecoin conversion in the backend. This is also an area that continues to rapidly scale led by meaningful acceleration in cross border B2B stablecoin flows. Volumes have surged from $100M per month in early 2023 to around $6B per month in 2025 and now takes up 60% of the global stablecoin payment volume although penetration rate of global B2B payment volumes remains in its infancy.

The second-largest funding category is blockchain interbank payment, which raised $703 million over the past year, up 116.9% year over year across 7 deals. This segment reflects growing interest from banks and financial institutions in settlement networks for tokenized assets. Companies in this category include Digital Asset, Fnality, R3, Partior. Unlike retail-facing networks, interbank payment infrastructure focuses on liquidity movement, and bank-to-bank transaction efficiency. Platforms such as Partior are being used by banks for 24/7 atomic settlement of tokenized commercial bank money, multi-currency liquidity management, and FX settlement. The deal count is smaller, but the funding per deal is high, suggesting large institutional investment into institutional-grade blockchain that does not overlap with retail-facing blockchain networks.

The third-largest category is fiat-backed stablecoins, which raised $670.65 million over the past year across 13 deals, although the segment declined 68.2% year over year. This does not mean fiat-backed stablecoins are becoming less important. Rather, it suggests that pure issuance is becoming more mature and concentrated. Issuers such as Tether, Circle, Paxos, and Ripple benefit from scale, trust, liquidity, regulatory positioning, and reserve economics. New entrants can still emerge, and the opportunity remains vast in non-USD stablecoins, but competing as a fiat-backed issuer requires addressing a multitude of factors such as licensing and regulatory costs, banking and custodian relationships, robust compliance program across jurisdictions, exchange listing, and distribution that can make barrier to entry high for smaller players.

Where The Next Funding Wave Is Headed To?

The Fastest Growing Funding Segments

The fastest-growing segment is stablecoin settlement and payouts, with 437.9% YoY funding growth. This is the clearest signal that investors are moving downstream from stablecoin issuance into real payment workflows. The reason is that settlement and payout platforms sit closest to revenue-generating use cases. Revenue source is diverse and can consist of transaction fees, FX spreads, withdrawal fees, treasury management fees, and account fees etc. Value accrual grows exponentially as more fintechs, marketplaces, corporations, SMB integrate stablecoin infrastructure into their backend, allowing these stablecoin infrastructure companies to ride on the volumes of their customers. These companies also gain a defensible distribution moat as switching costs post-integration compounds over time.

Source: CB Insights, Funding and deal count for stablecoin settlement and payouts.

The second-fastest-growing segment is crypto payment processing, with 253.8% YoY funding growth. Companies in this market help merchants to accept, process and convert stablecoin payments. They provide APIs, plugins, point-of-sale systems, and card issuance infrastructure enabling legacy payment infrastructure to support digital payments. Within this segment, crypto card issuers and program managers have seen rapid adoption due to credit and debit cards being one of the most used payment methods at in-store point-of-sale (POS) globally. Their revenue is also diversified comprising of transaction fee, FX fee, network incentive (Visa or Mastercard), and interchange fees. Similar to stablecoin settlement and payout, revenue scales exponentially as volume grows and switching cost builds over time. Players like Reap and Rain are full stack card issuers, differentiating themselves from other players by having principal membership at Visa/Mastercard, enabling them to act as BIN sponsors and increase revenue.

The reason this segment is growing quickly is that payment processing is where stablecoins connect to merchant acceptance. Visa’s head of crypto, Cuy Sheffield, has noted that there is still no stablecoin “merchant acceptance at scale,” and that stablecoin companies still need to connect back into existing acceptance ecosystems if they want real customer usage. This explains why card networks, payment processors, and stablecoin infrastructure companies are increasingly converging. Therefore, the fastest growth is likely to accrue to companies that abstract away the underlying technical complexity and enable seamless integration into existing merchant systems.

Source: CB Insights, Funding and deals for crypto payment processing

The third-fastest-growing segment is CBDC development, with 134% YoY funding growth. While not considered stablecoin because CBDCs are sovereign-backed and issued only by central banks, funding of CBDCs still matters because CBDCs and stablecoins are part of the same broader competition over digital money infrastructure. CBDC-related funding comes as central banks race to preserve the value of central bank currency and optimize interbank settlement. CBDC efforts by central banks also serve to homogenize credit risk and guarantee 1:1 redemption without the volatility of fiat-backed stablecoins.

Data source: BIS Annual Economic Report 2025

However, CBDC development is unlikely to replace private stablecoins in the near term. CBDCs are usually slower to deploy, more politically sensitive, and dependent on government timelines. Stablecoins, by contrast, are already circulating across public/private blockchains, exchanges, fintech apps, and payment platforms. The more likely future is coexistence: CBDCs may play a role in retail or wholesale settlement, while private stablecoins remain relevant for cross-border payments, offshore dollar access, crypto markets, and fintech distribution.

From a global lens, CBDCs have only officially launched in Jamaica, Bahamas, Nigeria, and Kazakhstan with many countries still actively in research, proof of concept or pilot phase, underscoring potential for accelerated growth in this area.

Source: cbdctracker.org