a16z: Stablecoins—A New Framework for the Global Financial System

Author: Noah Levine, Guy Wuollet, Robert Hackett; Source: a16z crypto; Translation: Shaw, Golden Finance

The global financial system is being reconstructed on a brand-new infrastructure, advancing at a pace far beyond what most outside the crypto industry perceive.

Stablecoins are the catalyst for this transformation. They have long evolved from niche trading tools into the foundational infrastructure of finance, becoming the underlying layer for a new generation of global financial products. The industry landscape map included in this article presents our assessment of this ongoing shift. While specific companies within the sector may change, and industry classifications will continue to merge and evolve, the more core transformation lies at the structural level: how the new technology stack of global finance is gradually taking shape, which sectors have matured, and what gaps still remain.

The core logic of this transformation is: Stablecoins are driving the emergence of a new form of Banking-as-a-Service (BaaS). The previous wave of BaaS was essentially fintech companies leasing bank licenses and connecting to outdated traditional core systems; this current wave is fundamentally different: companies are building their businesses on blockchain infrastructure, reducing friction with self-custody wallets, decreasing reliance on intermediaries, and integrating basic financial capabilities such as accounts, payments, foreign exchange, and credit to create end-to-end financial products.

Ten years ago, achieving such comprehensive financial services required holding multiple regional licenses and collaborating with local banks; today, any team that masters this new tech stack can quickly deploy related services.

The acquisitions of Bridge and Privy by Stripe, and BVNK by Mastercard, clearly demonstrate that traditional financial giants are leveraging the same industry insights to adapt to this paradigm shift. Industry consolidation and mergers continue to unfold, with established institutions racing to secure strategic positions in the core of this new infrastructure before it becomes fully standardized.

All signals indicate: the transformation of on-chain finance is already irreversible. Only by actively embracing and adapting to this trend can enterprises avoid being left behind.

Blockchain: Three Major Categories

The old notion that “all blockchains are vying for the same application scenarios” is breaking down. The market has now differentiated into three distinct types of public blockchains, each designed based on different needs and making different trade-offs in performance. Clarifying these differences helps us see the real direction of the fintech industry’s deployment:

1. General-purpose public chains: Represented by Solana, Ethereum, and their main layer-2 networks, they remain the core battleground of the crypto capital market, covering trading, lending, decentralized finance (DeFi), and other activities. This is a large and long-lasting market, but it does not represent the entire industry landscape.

2. Payment-specific blockchains: The second category consists of public chains tailored for financial services payments. Networks like Tempo by Stripe and Arc by Circle compete around capabilities that general-purpose chains have never optimized: native stablecoin transaction fees, privacy protections, and predictable transaction costs. For fintech companies processing millions of payments daily, cost predictability is crucial. Companies in this track generally bet that dedicated payment-focused public chains will become the core settlement layer of the next-generation financial infrastructure.

3. Institutional private networks: The third category includes consortium chains and institutional networks aimed at compliant entities, with Canton as a typical example. These networks balance programmability and data privacy without breaching compliance boundaries, satisfying regulatory requirements for risk control. As banks and asset managers accelerate their involvement, the value of such infrastructure will continue to grow, with its potential gradually becoming apparent.

Banking: Key Barriers Are Easing

For most of the past decade, the banking system has been the biggest bottleneck for native crypto financial services. High entry barriers for partner banks and unstable cooperation relationships have been the primary risks for crypto firms’ survival.

While this dilemma has not disappeared entirely, it has significantly improved. A group of compliant banks embracing the crypto ecosystem are actively building bridges to connect on-chain infrastructure with traditional fiat systems.

The longstanding issues of deposit and withdrawal difficulties are gradually being resolved. The smooth flow of fiat channels is vital for stablecoin-native fintech companies to operate, impacting not only payments but the entire underlying financial chain.

Stablecoin Issuers: Licensing Competition Determines Long-term Landscape

The competition in the stablecoin issuance track is unprecedentedly fierce, with a fundamental shift in logic: regulatory compliance has become the core battleground. Since the enactment of the U.S. GENIUS Act, major issuers have been rushing to apply for national trust licenses from the Office of the Comptroller of the Currency (OCC).

In the short term, federal backing can quickly enhance compliance credibility and gain recognition from regulators and institutional partners.

In the long term, if regulators allow nationwide licensed banks to directly access the Federal Reserve’s clearing network, issuers that have secured compliance licenses early will deeply integrate into the traditional financial core system, becoming key players in the global financial digital transformation.

The core of this competition is not about branding or marketing but about securing a position within the payment system hierarchy—who can build the foundational layer to support the long-term development of credit and capital markets.

Liquidity Service Providers: The Last Mile Challenge

Stablecoins have made breakthrough progress in the cross-border payment mid-chain link, facilitating digital fund transfers between countries. Relying on stablecoins, cross-border settlement efficiency has greatly improved, reducing dependence on pre-funded correspondent accounts and lowering friction in international fund flows.

The main current shortcoming lies in liquidity for converting stablecoins to local fiat currencies, especially in emerging markets. Many cross-border channels suffer from weak liquidity, leading to spreads, delayed transfers, and unstable quotes. If unresolved, this could severely limit large-scale adoption of stablecoins in B2B scenarios.

Three pathways are working to address this gap:

• Foreign exchange service providers adapted for stablecoins (e.g., OpenFX, XFX);

• Regional exchanges deeply rooted in local fiat markets (e.g., Bitso in Latin America, Yellowcard in Africa, Coins.ph in Southeast Asia);

• Traditional banks gradually implementing direct stablecoin foreign exchange settlement support.

All three are indispensable: FX service providers offer technical integration, regional exchanges solidify local liquidity, and banks leverage their balance sheets and global correspondent networks to provide backstops. No single channel can complete the full cycle independently.

Bank Integration Layer: The Unassuming but Essential Infrastructure

The entire stablecoin infrastructure has long been built by fintech firms, non-bank payment institutions, and native crypto entities, operating outside the traditional banking system. This model enables rapid iteration and an open ecosystem but also introduces structural risks: the underlying architecture of stablecoins is generally incompatible with the outdated core systems used by traditional banks, requiring dedicated bridging layers to connect them.

Bank integration services are precisely this critical bridging layer. These companies develop specialized infrastructure to help banks quickly deploy stablecoin-related services while retaining their existing core systems, avoiding costly full-system replacements and upgrades.

Some leading players have already extended their services from crypto trading and payments to on-chain lending, preemptively preparing for future stablecoin ecosystem expansion within banks.

Application Layer: Business Model Integration and New Financial Components

Two major trends are reshaping the end-user application ecosystem:

The first trend is the accelerating convergence of digital banking and crypto wallets.

Trading platforms are rolling out virtual accounts, payment cards, and rewards; online digital banks are integrating crypto assets and traditional wealth management products. The boundaries between these products are rapidly blurring, ultimately leading to integrated financial terminals that serve both crypto users and the general public through a unified interface.

The ultimate winner in this race may not be the company with the best current product experience but rather the platform that can aggregate traffic, build user trust, and precisely match market needs.

The second trend is the large-scale adoption of stablecoins in enterprise banking scenarios.

In regions with weak local USD banking infrastructure, unstable or costly services (covering most of Latin America, Sub-Saharan Africa, and Southeast Asia), stablecoins have enabled most enterprises to access USD operations that were previously impossible—covering vendor payments, global collections, and corporate treasury management.

The core of this trend is not the crypto asset itself but the inclusive accessibility of USD funds; driven by the real operational needs of businesses in environments with weak financial infrastructure and unstable systems.

But at the application layer, a more profound long-term transformation is occurring beyond account services: the entire on-chain financial ecosystem.

The USD channel is merely an entry point. Whether it’s small business owners in Lagos, freelancers in Buenos Aires, or savers in Jakarta, holding a stable USD on-chain balance grants access to a new financial system, connecting them to a full suite of financial services—credit, investment, wealth management, insurance, and more—that were previously out of reach.

In emerging markets where traditional financial services are absent, digital banks and super apps that first establish strong user account relationships will have a decisive advantage across multiple product categories. Payments are just the entry point; credit and investment are where the real business value accumulates.

Lending: A Deeply Impactful Secondary Transformation

If payments represent the first phase of transformation, then lending may become the second, with even greater influence.

Market perceptions of stablecoin growth often focus narrowly on scaled banking activities: dollar tokenization, wallet custody, real-time settlement, on-demand redemptions. But this view overlooks the deeper changes that will occur once stablecoins reach massive scale: when trillions of dollars in stablecoin funds accumulate, there will be enormous capital deployment needs. Companies holding stablecoin pools will seek to generate yields on idle funds; on-chain protocols will require liquidity; end users will develop borrowing needs.

Consequently, a new on-chain credit market is almost certain to emerge. This will no longer be the early DeFi speculative lending model—collateralized by crypto assets and driven by crypto market speculation—but a return to the core productive lending system of banking: facilitating capital formation, relying on real assets and receivables, and providing working capital to businesses in underserved regions.

The early era of DeFi’s wild growth is ending, and a more mature, sustainable on-chain financial system is arriving.

This evolution mirrors the development of the non-standard private credit industry over the past decade. Under regulatory pressure, banks have retracted some lending activities, while private credit funds have filled the gap, growing from niche alternative assets into a core industry worth trillions of dollars, capable of competing directly with syndicate loans. The underlying logic of on-chain credit markets is similar: detaching from traditional banking, leveraging new architectures to gather capital, and serving borrowers overlooked by traditional finance. The fundamental difference is the infrastructure: on-chain finance inherently features openness, programmability, and global reach—attributes that private credit cannot match.

Traditional credit institutions are beginning to pay close attention to this track; those with early insights and the ability to deploy via in-house development or acquisitions will shape the future landscape of on-chain capital markets.

The U.S. Dollar’s Dominance and Geopolitical Implications

The profound impact of this financial transformation extends beyond fintech, creating a two-way geopolitical effect.

For individuals and enterprises, connecting to this new global financial system means real economic empowerment: avoiding local currency devaluation, enabling global payments, and conducting operations in the world’s most liquid currency—USD. Farmers in Sub-Saharan Africa, manufacturers in Southeast Asia, small importers in Latin America—no longer need to open U.S. bank accounts or rely on cross-border correspondent banking systems. They can hold, transact, and save USD independently. USD is no longer a privilege but a universal tool—an unprecedented shift.

For the U.S., **stablecoins further reinforce the dollar’s global dominance. Since the Bretton Woods system collapsed, dollar hegemony has relied on institutions like the IMF, World Bank, global correspondent networks, and bilateral agreements, allowing the U.S. Treasury and Federal Reserve to maintain long-term control over global financial rules. Now, stablecoins open a more direct pathway: every USD stablecoin wallet becomes a new node in the dollar financial network, capable of settling value across borders at near-zero cost and instant speed. As stablecoin adoption grows, network effects strengthen, and the dollar’s reach into previously underserved economies deepens.

This is the most far-reaching geopolitical consequence of the stablecoin era: as regulations like the GENIUS Act are implemented, the U.S. government is not merely regulating a new financial product but strategically betting—using stablecoin infrastructure to solidify the dollar’s long-term leadership. In the current context of the Bretton Woods system’s disintegration and dollar dominance facing unprecedented challenges, this strategic move is highly significant.

Beyond Payments: The Underlying Rebuilding of Global Finance

The new global financial technology stack is still being built, and its strategic value extends far beyond just upgrading payments.

What is happening now is a comprehensive upgrade of the financial system’s foundational layer. The new transmission networks are inherently open, programmable, and interconnected, capable of reaching regions, populations, and business scenarios that traditional finance has never touched. Its value includes:

• Providing inclusive USD services in underserved regions;

• Creating yield on vast idle funds;

• Offering credit to groups excluded from traditional finance;

• Opening investment opportunities to billions who have never participated in capital markets.

Today, companies deeply involved in full-chain financial infrastructure and layered deployment will define the next era of global finance and lead the future of the dollar economy worldwide.