Stablecoins Emerge as Crypto’s Breakout Star and VCs Are Betting Billions on It

In a crypto market often defined by volatility, hype cycles, and speculative fervor, one corner of the space is quietly — and definitively — proving its staying power: stablecoins. What began as a simple mechanism to peg crypto assets to the U.S. dollar has evolved into a financial revolution moving billions daily, and venture capitalists are taking notice in a big way.

Stablecoins, long seen as a secondary layer in crypto’s tech stack, are now being treated as crypto’s gateway to the real economy, with use cases in payments, savings, cross-border transfers, and enterprise finance expanding at an unprecedented rate.

“We’re still in the early innings,” said Stefan Cohen, partner at Bain Capital Crypto. “But the scale is already staggering.”

The turning point for many came last October, when fintech giant Stripe acquired crypto infrastructure startup Bridge for $1.1 billion,  the largest crypto M&A deal to date. The acquisition wasn’t about speculation. It was about putting stablecoin rails into real-world financial infrastructure.

With $1 trillion in total payment volume, Stripe’s move unlocked an entirely new outlook for stablecoins.

Juan Lopez, general partner at VanEck Ventures and former Circle Ventures leader, sees enormous upside: “If Stripe transitions its volume to its own stablecoin and runs an interoperable platform, that’s a potential $40 billion annual net interest margin opportunity, assuming treasury yields remain steady around 4%.”

That kind of monetization is turning stablecoins from a fringe innovation into a serious contender in global finance and investors are racing to position themselves accordingly.

The numbers back up the optimism, stablecoin settlement volumes have surpassed $10 trillion annually, with cross-border payments hitting $50 billion per month,  up from near zero just over a year ago.

Total stablecoin supply has grown from $125 billion at the start of 2024 to nearly $230 billion today, an 84% surge, and it’s increasingly decoupled from traditional crypto market cycles.

That decoupling is critical. Investors no longer see stablecoins as tied to Bitcoin or Ethereum booms, they see them as the new money movement layer for the internet.

“Stablecoins aren’t just supporting crypto anymore,” said Lopez. “They’re becoming the product.”

Top issuers like Tether (USDT) are already generating billions in revenue from treasury yields with relatively lean operations. But the race is heating up. Circle’s USDC is making a strong institutional push, with plans to go public, while Ripple recently launched its own stablecoin, expanding its footprint.

Meanwhile, USXM, a newer entrant exclusive to the Pecu Novus blockchain, is gaining recognition for its precise utility, privacy-first design, transparency and financial flexibility.

“These aren’t just coins — they’re platforms,” said Justin Belle, managing director at FGA Partners. “Once U.S. regulations fall into place, we’re looking at a 10x boom in stablecoin activity. This is the beginning of the golden era of crypto utility.”

VCs aren’t just pouring money into the issuers,  they’re backing the rails that make stablecoins usable at scale. That includes everything from compliant wallet infrastructure and blockchains to B2B payment platforms and regulatory tooling.

Some are placing bets on app-first platforms that treat stablecoins as monetization enablers rather than core products. The most valuable future businesses may be either permissionless infrastructure layers or centralized platforms that integrate stablecoins seamlessly into everyday services, from payroll to ecommerce.

Yet, the biggest catalyst and the biggest risk is still regulation.

There’s broad agreement that a clear U.S. framework could unlock mass adoption by fintechs, banks, and enterprises. VanEck’s Lopez even suggested that, with the right regulatory environment, stablecoins could reach cloud computing-level scale within five years.

“We’re at the same moment AWS was at 15 years ago,” he said. “Move now or get left behind.”

But some warn of potential pitfalls. Jed Breed, founder of Breed VC and former head of digital assets at Circle, cautioned that restricting stablecoin issuance to large institutions could choke innovation.

“We can’t shut out the smaller players,” Breed said. “They’re where the real breakthroughs are happening.”

VCs also worry about entrenched incumbents, like JPMorgan,  using closed stablecoin systems that wall off access and stifle competition.

Despite the regulatory uncertainty, one thing is clear: the stablecoin revolution is already underway. As value continues to migrate online, stablecoins are emerging as the default financial layer of the internet, programmable, scalable, and borderless.

“The rails are being built,” said Belle. “The shift won’t happen overnight, but it’s already in motion.”

Gerald Foster
UCW Newswire