This Week in Stablecoins: Wall Street, FinTech and Crypto Converge

Once the preserve of crypto traders seeking a dollar proxy, stablecoins are now poised to become the next contested layer of global finance.

From Wall Street banks to Silicon Valley FinTechs, companies are increasingly interested in stablecoin infrastructure play. The emerging landscape reveals three themes: institutional adoption, competitive convergence and regulatory brinkmanship. Together, they are reshaping the rails, rules and reach of money itself.

The conversation has shifted from “Should we explore stablecoins?” to “Where do we plug them in?”

Citigroup’s latest move is emblematic. Building on its Citi Token Services, which already shuttles tokenized U.S. dollars between hubs in New York, London and Hong Kong, the bank is preparing to offer crypto custody and stablecoin-powered payments.

CEO Jane Fraser has called token-based treasury tools “superior” for corporate liquidity management, pointing to their scalability, compliance readiness and operational efficiency.

In Europe, Visa has moved from pilot to production with Wirex, enabling near-real-time settlement in EURC, Circle’s euro-backed stablecoin. This follows Visa’s earlier integration of multiple USD-backed stablecoins into its settlement stack.

Stripe is building its own blockchain, “Tempo,” in partnership with Paradigm. This Layer-1 chain is being designed as a high-performance, payments-centric network compatible with Ethereum’s tooling. Combined with Stripe’s $1.1 billion acquisition of stablecoin infrastructure firm Bridge and crypto wallet developer Privy, Tempo signals an ambition to control both the on-ramp and the underlying settlement fabric.

The operational reality is simple but powerful: merchants and partners can now settle transactions faster, with programmable settlement logic, while sidestepping legacy correspondent banking bottlenecks.

See also: Institutional-Grade Custody Remains Missing Link in Crypto’s Mainstream Breakthrough

Stablecoins have also created an unusual arena in which banks, FinTechs and crypto-native firms are colliding and collaborating. The lines between competitors and partners are blurring, with each side bringing distinct advantages.

Mesh, backed by PayPal Ventures, exemplifies the FinTech bridge role. Its SmartFunding engine lets users pay with any digital asset, while merchants receive instant settlement in stablecoins or fiat. The technology powers PayPal’s own “Pay with Crypto” service, settling transactions in PayPal USD (PYUSD). With integrations into Coinbase, Binance and OKX, Mesh is deeply embedded in the crypto ecosystem while meeting enterprise demands for scale, security and compliance.

Canadian payments provider Nuvei offers another take. It’s now enabling global payouts via stablecoin rails alongside traditional bank transfers and card networks. For emerging markets, where correspondent banking is slow or inaccessible, Nuvei’s model—settle in stablecoins on-chain, pay out locally in fiat—offers a blend of speed and familiarity.

On the crypto-native side, Coinbase and Circle are orchestrating scale and liquidity.

Coinbase has revived its Stablecoin Bootstrap Fund to seed USDC liquidity into DeFi protocols like Aave, Morpho and Jupiter. The aim: ensure deep, reliable liquidity so stablecoins can function as frictionless payment rails. Circle, meanwhile, has emerged from its IPO quarter with USDC circulation up 90% year-over-year to $65.2 billion, processing $5.9 trillion in transaction volume.

Even Western Union, with 175 years of remittance history, is considering launching its own dollar-backed stablecoin for non-U.S. markets. The idea is a token that could act as a USD-like savings account in places where local currencies are volatile or dollar access is restricted.

Read more: Explainer: How Blockchain Network Layers Apply Across CFO Tech Stacks 

If technology and partnerships are driving the infrastructure and competitive landscape, regulation will determine the pace and shape of adoption.

The U.S. GENIUS Act has already triggered pushback. The American Banking Association, Bank Policy Institute and state banking associations are pressing Congress to close perceived loopholes. They argue that stablecoin issuers might skirt prohibitions on paying interest by routing yields through affiliates or exchanges, effectively offering deposit-like products without bank oversight.

This standoff mirrors the deeper structural tension in finance: how to extend the benefits of speed, transparency and global reach without compromising systemic stability. The outcome will influence whether stablecoins remain a parallel track for niche use cases or become the backbone of everyday financial flows.

The post This Week in Stablecoins: Wall Street, FinTech and Crypto Converge appeared first on PYMNTS.com.