Stablecoins: The New Global Financial Infrastructure Reshaping Cross-Border Payments

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Crypto for Advisors: The evolution of stablecoinsCoinDesk Indices

What to know:

As an analyst covering the crypto space, I write ‘Crypto for Advisors,’ CoinDesk’s weekly newsletter. It’s designed to help financial advisors understand digital assets, and I send it out every Thursday. If you’re interested in receiving it, you can subscribe here.

Today’s newsletter features an analysis by Claudia Marcela Hernández on how stablecoins are now driving the growth of tokenized markets and international payments. This shift comes after the GENIUS Act provided clearer regulations, moving stablecoins beyond their original purpose of simply reducing price fluctuations.

In my research, I’ve been following Morva Rohani’s insights from ‘Ask an Expert,’ where she explains how rules for stablecoins are actually the building blocks for the future of digital asset markets. She also points out that some countries are worried about the potential impact of U.S. stablecoin policies, and importantly, she highlights what financial advisors need to look for when deciding if a stablecoin is trustworthy.

Learn about the latest advancements in the Clarity Act in Keep Reading.

Happy Reading.

– Sarah Morton

Are stablecoins the infrastructure reshaping global finance?

Stablecoins were first created to address a major challenge with cryptocurrencies: their price instability. By linking their value to traditional currencies like the U.S. dollar, stablecoins provided a dependable way to trade and transfer value across different blockchains without the dramatic price fluctuations seen with cryptocurrencies like Bitcoin. Initially, they were mainly used to facilitate trading within the crypto world, but their function is quickly expanding beyond that.

Stablecoins are becoming increasingly important, moving beyond just being used for trading. They’re now key to how decentralized financial systems (DeFi) settle transactions, facilitate international money transfers, and act as the main currency for new digital financial markets.

As a researcher tracking the evolution of digital currencies, I’m seeing a significant shift in how institutions view crypto. We’re moving past initial hesitation, and now seeing real acknowledgement of the technology’s potential. For example, the IMF has highlighted how stablecoins could make international payments faster and cheaper by cutting out some of the middlemen. Here in the US, policymakers are actively discussing ways to bring stablecoins *into* the existing, regulated financial framework, which is a major step forward.

Since many of these tokens are valued based on the U.S. dollar, they could be subtly expanding the dollar’s influence throughout the worldwide digital economy built on blockchain technology.

How a Stablecoin Is Issued and why they matter?

Users give traditional money, like U.S. dollars, to an authorized provider. This provider then creates the same amount of stablecoins on a blockchain, ensuring each stablecoin is worth one dollar. The dollars received are kept in secure accounts – usually as cash or short-term U.S. government bonds – and serve as backing for all the stablecoins in use.

To cash out, the process reverses: users exchange their stablecoins for traditional money held in reserve. This cycle of issuing stablecoins and redeeming them for fiat currency is what keeps the stablecoin’s value stable and tied to the asset it represents.

Stablecoins offer quick, around-the-clock transactions, regardless of bank operating hours. They also make it possible to automate payments and integrate them into online systems. Plus, they can give people access to U.S. dollar value, even without a traditional bank account.

The World Economic Forum reports that stablecoin transactions now total tens of trillions of dollars each year, highlighting their increasingly important place in the world of digital finance.

This creates both a chance and a hurdle for those making financial policy. The U.S. Treasury has pointed out that new digital payment methods, like stablecoins, could make finances more efficient, cheaper, and accessible to more people – but only if proper protections are established.

Use cases and applications

Stablecoins make sending money internationally much faster and cheaper than traditional methods like bank transfers. They allow for nearly instant cross-border payments at a significantly lower cost.

Stablecoins can be a quicker and more affordable way to send money to many developing countries, as traditional money transfer services often have high fees.

Decentralized finance (DeFi) relies heavily on stablecoins. They act as a form of security (collateral), provide funds for trading (liquidity pools), and are used to complete transactions across various platforms like lending services, exchanges, and markets for complex financial products.

As more real-world assets like bonds, property, and commodities become tokenized, stablecoins are becoming the preferred way to finalize transactions in digital financial markets.

Companies are exploring stablecoins to simplify how they manage money across different countries and speed up international payments. This includes both financial technology companies and large businesses with global operations.

In short, stablecoins are gradually becoming the base layer of digital financial activity.

The Regulatory Turning Point: The GENIUS Act

In 2025, stablecoins rapidly moved from being a specialized part of the crypto world to becoming a more mainstream financial tool, largely thanks to the passage of the GENIUS Act in the United States. This law, officially called the Guiding and Establishing National Innovation for U.S. Stablecoins Act, helped pave the way for their wider acceptance.

This new law establishes the first national rules for issuing payment stablecoins. It allows banks and certain approved financial companies to issue these stablecoins, but only if they are backed by safe, easily-convertible assets. These issuers must also meet strict standards, including being open about their reserves, undergoing regular checks, and following anti-money laundering and counter-terrorism financing rules.

A key benefit of the GENIUS Act was that it provided clear rules for stablecoins. Previously, it was unclear if these digital currencies should be regulated like stocks, raw materials, or traditional bank products, which made institutions reluctant to get involved. The law solved this problem by officially defining stablecoins as a unique type of digital payment.

Stablecoins and monetary power

As a crypto investor, I’ve noticed that dollar-based stablecoins are way more popular than those tied to other currencies. This is a big deal because it basically means the U.S. dollar could expand its influence beyond traditional banks, all thanks to crypto. It’s like the dollar is finding new ways to be used, and stablecoins are the vehicle.

Other countries are also developing rules for crypto. The European Union, with its new MiCA regulations, is setting firm standards for stablecoin companies that operate there, like needing sufficient reserves and protecting the euro. At the same time, the EU is looking into creating its own digital currency issued by the central bank.

Hong Kong and Singapore are creating rules to oversee stablecoins and bring them into mainstream financial systems. China is focusing on developing its own digital currency, the digital yuan, with the goal of increasing its global financial reach.

Whether stablecoins succeed in the future hinges on people trusting the assets backing them, the rules governing them, and the organizations that monitor them. Their lasting worth won’t be about how quickly they grow, but about how reliably and responsibly they integrate into the worldwide financial system.

– Claudia Marcela Hernández, digital assets specialist

Ask an Expert

Q. How important is stablecoin regulation to tokenized capital markets?

Regulating stablecoins is crucial because they’re needed for reliable transactions in the growing digital capital markets. However, regulation isn’t the whole answer. For stablecoins to be widely adopted by institutions in these markets, we also need clear legal rules about when a transaction is truly final, how to redeem stablecoins for their face value, the risks associated with the companies that issue them, and how these digital settlements work with existing payment and securities laws.

Regulating stablecoins is an important first step towards building well-functioning digital capital markets, but it’s not the complete solution. What financial institutions really need is assurance that the digital assets used for settling transactions are trustworthy, that legal commitments are fulfilled when those transactions are completed on the blockchain, and that the entire market operates under clear and consistent supervision.

Q. Are some jurisdictions starting to see U.S. stablecoin policy as a risk?

There’s increasing awareness that stablecoins have significant international and financial consequences. Since most stablecoins are valued in U.S. dollars, their use could expand the dollar’s influence within blockchain-based finance. As the U.S. develops clear rules for regulated dollar-backed stablecoins, this trend will likely strengthen, potentially allowing the U.S. to set the standards and currency for the future of digital finance.

In Canada, factors like its closeness to the U.S., strong financial ties, and global instability are increasing concerns about stablecoins. The worry isn’t so much about competition, but rather a reliance on stablecoins issued by other countries, particularly those based in U.S. dollars. Without a Canadian system in place, individuals and organizations here might end up using these foreign stablecoins instead.

Canada is building a system to encourage innovation and competition in the stablecoin market, all while keeping things safe for consumers and working with international standards. The goal is to allow both Canadian and foreign stablecoins to operate under Canadian regulations, protecting the Canadian dollar and giving Canadians reliable, regulated choices in the growing world of digital finance.

Q. How can advisors assess whether a stablecoin is credible?

For stablecoins to be trustworthy, especially as they become more regulated, a few things are essential. First, they need to be backed by safe, easily-sold assets, and this backing needs to be openly and regularly verified. Second, users must be guaranteed the ability to easily redeem their stablecoins for their full value. Third, reliable stablecoin companies follow clear legal and regulatory rules. How the company is structured, where it’s located, and how its reserves are held also matter. The most important thing isn’t just that a stablecoin is currently worth $1, but whether it’s built to handle lots of redemptions and maintain user trust, even during difficult times.

– Morva Rohani, executive director, Canadian Web3 Council

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2026-03-26 18:20