a16z Report Analysis: How Stablecoins Evolve into Global Financial Infrastructure and New BaaS Models

On April 11, 2026, the total market capitalization of stablecoins reached a record high of $318.6 billion, a year-over-year increase of approximately 34% compared to about $238 billion in the same period in 2025. In the same week, a16z crypto released an analytical report titled “The New Stack of Global Finance: Stablecoins Edition,” which presents a key judgment: stablecoins are evolving into a foundational financial pipeline, giving rise to a new “Banking-as-a-Service” (BaaS) model that differs from traditional fintech paradigms.

What is Banking-as-a-Service? The previous wave of BaaS was fundamentally about fintech companies leasing bank licenses and connecting to legacy core banking systems. This current transformation is structurally different: enterprises are building their businesses directly on blockchain infrastructure, leveraging self-custodied wallets to reduce transaction friction and dependence on intermediaries, integrating accounts, payments, foreign exchange, and credit into an end-to-end, all-in-one product. This means that financial services that ten years ago required numerous regional licenses and local banking partnerships can now be rapidly deployed by any team with the appropriate tech stack.

“Crossing the Point of No Return”: Why On-Chain Financial Transformation Is Irreversible

The report makes a watershed judgment: the migration of finance onto blockchain has crossed an irreversible critical point. This conclusion is not based on narrative hype but is validated by the superimposition of multiple structural changes.

In terms of market size, stablecoins have evolved from “internal tools within the crypto industry” to a normalized cycle of trillions of dollars. In Q1 2026, the global adjusted trading volume of stablecoins was approximately $4.5 trillion, with annual trading volume reaching $33 trillion. Notably, the usage structure of stablecoins is also changing significantly: commercial payments (C2B) are growing at 128% annually, far surpassing peer-to-peer transfers. This indicates that stablecoins are penetrating into the real economy, facilitating payments for goods and services.

Meanwhile, the velocity of stablecoin circulation has increased from 2.6 times at the start of 2024 to about 6 times—transaction demand is outpacing new issuance. Each stablecoin unit is being used more frequently for real transactions rather than just internal crypto exchange fund turnover. All these data points lead to a conclusion: stablecoins have found product-market fit, and this fit is expanding into broader financial applications.

New BaaS vs. Traditional BaaS: Why This Is a Completely Different Story

To understand the depth of the transformation brought by stablecoins, it is essential to analyze the structural differences between two generations of “Banking-as-a-Service” models.

The core logic of the previous BaaS wave was “license embedding”: fintech startups leased bank licenses and connected to banks’ legacy core systems, enabling them to offer banking-like services. The constraints of this model are that it remains fundamentally limited by the efficiency ceiling and compliance costs of traditional banks. API access to core banking systems was limited, settlement cycles were constrained by bank operating hours, and cross-border payments still relied on correspondent banking networks.

In contrast, the new generation of BaaS driven by stablecoins involves a fundamental infrastructural shift. Enterprises are no longer building on bank core systems but on blockchain infrastructure—self-custodied wallets, stablecoin settlement rails, and on-chain account systems. The immediate result is a significant increase in modularity: financial functions such as accounts, payments, foreign exchange, and credit, which previously required multiple bank or payment provider integrations, can now be combined into end-to-end products within a single blockchain stack.

The capital movements of traditional financial institutions also confirm this trend. For example, Stripe’s $1.1 billion acquisition of stablecoin infrastructure platform Bridge, and Mastercard’s acquisition of BVNK, demonstrate that traditional giants are strategically positioning themselves within this new infrastructural layer.

The Tri-Polarization of Underlying Public Blockchains: An Emerging Independent Track for Payment Chains

An under-discussed but emerging trend is that blockchain networks are no longer in a “homogenized competition” but are diverging into three distinct functional categories.

The first category is general-purpose public chains. Represented by Solana, Ethereum, and their main layer-2 networks, these remain the core battleground of the crypto capital market, supporting functions like trading, lending, and decentralized finance (DeFi). This is a large, long-term viable track, but it does not encompass the entire stablecoin financial landscape.

The second category is dedicated payment blockchains. Designed specifically to address core pain points in stablecoin trading—cost predictability, native gas fees, and privacy—networks like Stripe’s Tempo and Circle’s Arc are emerging. These are competing in dimensions that general-purpose chains have not optimized for. For fintech firms processing millions of payments daily, establishing reliable cost models is crucial.

The third category is institution-specific networks. Exemplified by Canton, these are designed for regulated banks and asset managers, balancing programmability and data privacy while meeting compliance and risk standards. As banks and asset managers accelerate their adoption, dedicated permissioned chains for regulated entities are becoming increasingly important.

The Two Acts of Stablecoin Financial Evolution: Payments and Lending

Within the stablecoin narrative, payments are often viewed as “Act One.” However, the report suggests that the real structural turning point may come with “Act Two”—the on-chainization of the credit market.

The logic of payments is relatively straightforward: replacing fiat currency with stablecoins for value transfer, resulting in higher efficiency, lower costs, and settlement times compressed from days to seconds. But credit involves complex processes such as credit assessment, collateral management, interest rate setting, and default handling. On-chainization of these processes could enable capital to form new allocation channels outside traditional banking systems.

The large-scale issuance of stablecoins could catalyze a new on-chain credit market. Collateral holders might obtain liquidity by staking stablecoins, and the absence of intermediaries could be a feature rather than a bug—constructing self-regulating credit systems through over-collateralization and on-chain liquidation mechanisms. This is still in early exploration but warrants ongoing attention.

Regulatory Turning Point: The GENIUS Act and the Divergence in Global Stablecoin Governance

A key prerequisite for stablecoins to become foundational financial infrastructure is a clear regulatory framework. In 2025, significant progress was made across major jurisdictions.

The U.S. GENIUS Act was signed into law in July 2025, establishing the first federal-level regulatory framework for payment stablecoins, setting clear standards for reserve backing, disclosure, and supervision. By 2026, policy focus shifted from investor protection and price stability to systemic risks such as liquidity structures, settlement mechanisms, and cross-border capital flows.

Meanwhile, regulatory approaches are diverging across jurisdictions. After the EU’s MiCA framework took effect at the end of 2024, many exchanges delisted USDT for compliance reasons, leading to rapid growth in non-dollar stablecoins—total supply reaching about $1.2 billion, with wallet counts rising from 40k in early 2023 to 1.2 million. Hong Kong’s Monetary Authority implemented a stablecoin issuer regime in August 2025, becoming a regional regulatory benchmark.

This global regulatory divergence is shifting the competitive landscape of stablecoin issuance: from a focus on technological advantage and liquidity depth to licensing and regulatory positioning.

The Power Shift in Tech Stack Reconstruction: Who Is Building the New Financial Foundation?

a16z’s market map offers a systematic perspective: the bottom layer is the segmentation of general-purpose chains, payment chains, and institutional networks; the middle layer involves bank connectivity, fiat on/off ramps, foreign exchange liquidity, and license competition among stablecoin issuers; the top layer encompasses new banks, crypto wallets, enterprise banking, on-chain credit, investment, and wealth management applications.

From this map, key positions being reconstructed are clear:

At the infrastructure level, the rise of dedicated payment chains indicates that the settlement layer itself is evolving. At the service layer, bridges connecting on-chain and off-chain—fiat on/off ramps and FX liquidity aggregators—are becoming critical nodes in the financial tech stack. At the application layer, the boundary between traditional banks and fintech firms is being redefined: a company may never have held a banking license but can still offer comprehensive accounts and payment services via on-chain stacks.

The core question is: who can control account entry points, liquidity nodes, compliance channels, and credit capabilities within this new tech stack? Those who do will likely occupy central positions in the next-generation global financial system. This explains why giants like Mastercard, Stripe, and PayPal are accelerating their investments in on-chain infrastructure—aiming to seize the emerging new infrastructure landscape.

Summary and Outlook

In summary, the evolution of stablecoins is undergoing a three-stage transformation: from a quote tool among crypto exchanges, to an efficiency solution for value transfer, and now to a core component of financial infrastructure. Multiple dimensions revealed by the a16z report—market size, structural segmentation, regulatory trends, capital flows—support an overarching conclusion: the transition to on-chain finance is now irreversible.

The current landscape remains in flux. Key questions include whether dedicated payment chains can truly carve out independent markets from general-purpose chains, how the second act of credit will unfold, and whether global stablecoin regulation will move toward interconnected frameworks rather than fragmentation. These issues will continue to be high-priority topics in the stablecoin industry over the next two to three years.

Frequently Asked Questions

Why are stablecoins called “foundational financial pipelines” rather than just payment tools?

The meaning of foundational financial pipelines extends far beyond payment functions. Stablecoins not only facilitate value transfer but also serve as account entry points, collateral assets, settlement media, and foreign exchange channels. The essence of the new “Banking-as-a-Service” model is that enterprises only need to master on-chain technology stacks to assemble integrated financial products—accounts, payments, foreign exchange, credit—where stablecoins play a continuous foundational role.

What is the core difference between the new generation of BaaS and the previous one?

The previous BaaS involved fintech companies leasing bank licenses and connecting to legacy core banking systems—essentially “license leasing.” The new BaaS involves enterprises building products directly on blockchain infrastructure (wallets, settlement rails, on-chain account systems) without relying on bank core systems. Its core capability is “modular composition.”

How is global stablecoin regulation evolving?

Global stablecoin regulation is shifting from “regulatory vacuum” to “regulatory convergence.” The U.S. GENIUS Act, EU’s MiCA, and Hong Kong’s stablecoin issuer regime all came into effect between 2025 and 2026, establishing common regulatory principles: mandatory full reserve backing, disclosure and audit obligations for issuers, and systemic risk controls for cross-border flows. While specific implementation varies, compliance is an irreversible trend.

Why is the credit function of stablecoins more important than the payment function?

Payments are a more direct substitution scenario, but the credit market’s scale far exceeds that of payments. Large-scale stablecoin issuance could enable new capital allocation channels outside traditional banking, reshaping global credit flows. On-chain credit involves complex issues like credit assessment, collateral management, and interest rate setting, and remains in early exploration.

Does the growth in stablecoin market cap also indicate increasing speculative demand?

Data shows that the usage structure of stablecoins is changing substantively. In 2025, commercial payments (C2B) grew at 128% annually, becoming the fastest-growing transaction type, and circulation velocity increased from 2.6 times to about 6 times, indicating transaction demand growth outpacing new issuance. These structural indicators suggest that growth is shifting from internal exchange turnover to real economic applications.