The internet runs on stablecoins

July 8, 2025

Another week, another wave of validation for stablecoins. The highest levels of government explicitly endorse private digital dollar infrastructure over central bank alternatives, and programmable money is already surpassing Visa and Mastercard’s volume.

While institutional adoption across traditional banking and venture capital is accelerating, it’s all working together to reinforce stablecoins' emergence as fundamental internet infrastructure. Let’s dive in!

Key Highlights

• Treasury Secretary Backs Stablecoins Over CBDCs: Treasury Secretary Scott Bessent declared that markets will choose US-regulated stablecoins over central bank digital currencies "all day, every day," providing the strongest government endorsement of private stablecoin infrastructure to date and signaling official policy preference for market-based solutions.

• Stablecoins Become Internet's Default Settlement Layer: Alchemy reported that stablecoins are becoming the "default settlement layer" for internet transactions, while venture capital funding for stablecoin startups surpassed 2021 peaks as institutional money pours in, validating the technology's fundamental infrastructure role. 

• USDT on TRON Hits $80 Billion Milestone: The USDT supply on TRON surpassed $80 billion, strengthening TRON's position as the leading stablecoin network and demonstrating global users' continued preference for efficient, low-cost blockchain infrastructure.

Government Policy & Regulatory Framework

Political momentum around stablecoin regulation is accelerating. Treasury Secretary Bessent's endorsement signals historic executive branch support, but the GENIUS Act's could spell trouble for Tether, the industry’s largest issuer. A key pillar of the bill is reserve transparency – something Tether has long struggled with. And yet, let’s not forget: forget Trump’s Secretary of Commerce, Howard Lutnick, made a 5% investment in Tether just last November. This will be interesting to watch play out. 

Enforcement activities are also intensifying across multiple jurisdictions, as the focus increasingly moves towards compliance. The Financial Action Task Force reported that most illicit on-chain activity now involves stablecoins, prompting increased regulatory scrutiny. The Department of Justice's record $225 million USDT seizure from pig butchering scams highlights aggressive enforcement strategies and real-world impact on criminal enterprises that opt to use stablecoins. 

Global regulatory approaches are all moving towards accommodating stablecoin initiatives. Germany's financial regulator approved DWS venture's euro stablecoin initiative, while China's tech giants lobby for yuan-based stablecoin development amid broader de-dollarization efforts. Russia's defense conglomerate Rostec plans to adopt ruble stablecoins for secure transactions, demonstrating the market’s preference for native digital currencies.

However, compliance challenges persist. Circle faces scrutiny over USDC usage by North Korean IT workers, highlighting ongoing sanctions enforcement complexities with the velocity and ease of transfer of stablecoins relative to traditional financial systems. Just like the legacy financial system, blockchain payment rails require constant vigilance to deter bad actors. 

Corporate Infrastructure & Banking Integration

Traditional banking infrastructure is integrating stablecoins at breakneck speeds, and for good reason. Banks could potentially unlock $10.1 trillion for Treasury markets via stablecoin adoption, meaning massive liquidity. Circle's national trust bank license application signals institutional-grade infrastructure development for USDC reserve custody in a move to capture part of these liquidity flows. And Peter Thiel’s launching a crypto-focused bank with Palmer Luckey. You’re going to see more and more existing banks + newly launched banks continue to cater to the demands of the stablecoin hungry market.    

Payment network integration is also accelerating. Mastercard and Visa are integrating PYUSD, USDC, and other stablecoins for global payments, while banks increasingly eye Ethereum for stablecoin infrastructure, with 51% of stablecoins operating on the network. Ripple's RLUSD achieved its first bank integration via AMINA, demonstrating institutional adoption momentum.

Fintech infrastructure continues expanding, with payment company Ivy adding Circle's USDC and EURC stablecoins. AllScale raised $1.5 million to develop stablecoin solutions specifically for small businesses, while BitRail launched turnkey stablecoin and branded digital wallet services. Taurus also introduced the first private stablecoin contract, addressing institutional privacy requirements.

Market Growth & Technical Innovation

Market performance metrics demonstrate explosive growth across multiple dimensions. Ripple's RLUSD became June's fastest-growing stablecoin while TRON solidified its position leading global stablecoin networks. USDC Treasury minted 5.5 billion tokens on Solana during Q2, indicating strong institutional demand for multi-chain infrastructure.

Venture capital activity reached historic levels, with stablecoin startup funding surpassing 2021 peaks as institutional money floods the sector. Polymarket's $1 billion valuation surge fueled massive USDC demand, according to Coinbase reports, demonstrating prediction market applications driving stablecoin adoption.

Technical innovation continues advancing through specialized infrastructure. Stable unveiled the first Layer 1 blockchain explicitly built for USDT payments, while new Bitcoin-backed stablecoin vaults offer yield strategies without requiring BTC sales. But it’s not all good news, as Resupply protocol has proposed burning 6 million tokens following a $10 million exploit.

Regional Adoption & Payment Integration

Nearly every geography is experiencing accelerated stablecoin innovation. Binance Pay enabled 80+ French Riviera merchants to accept stablecoins instantly, while Global Dollar (USDG) officially launched in the European Union. Asian markets showed serious momentum, with Naver Pay and Kakao Pay driving stablecoin success through utility and ecosystem development.

Cross-border payment infrastructure continues to mature. Stablecoins could prove key to PAPSS' new blockchain platform for cross-border settlements, while Hokkoku and Soft Space prepare to unveil SoftPOS systems supporting stablecoin payments. On the physical side, hardware wallets are powering stablecoin growth in Hong Kong markets.

Market dynamics reveal significant currency preferences, with dollar-pegged tokens beating yuan alternatives 80:1, raising questions about China's stablecoin strategy effectiveness. While Hong Kong’s new licensing regime on August 1st may start to chip away at this ratio, industry analysis suggests that euro stablecoins will surpass €100 billion market capitalization, indicating European digital currency momentum. But today, the US dollar’s dominance of the stablecoin market remains at a comfortable first place.

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