By 2025, the market capitalization of stablecoins will surpass $300 billion, with institutions predicting it will reach $2 trillion in the future. This is no longer just a story about cryptocurrencies, but about a fundamental transformation of money itself. Stablecoin infrastructure is rewriting the future of financial services. This article originates from Stepan | squads.xyz and is compiled, translated, and written by BitpushNews.
(Background: The turning point of cryptocurrencies: in 2026, the rules of the game will be completely changed)
(Additional context: Google searches for “cryptocurrency” have plummeted to an all-time low, with silver becoming the new safe haven)

Table of Contents

• Data Overview
• What We Learned from the Synapse Incident
• Self-Custody and Insurance Issues
• Global Reach and the Last Mile Challenge
• The Battle of Blockchain Built for Specific Purposes
• Intelligent Agentic Finance (Agentic Finance)
• Reflection on Security Issues
• Privacy Challenges
• Looking Ahead

This is no longer primarily a story about cryptocurrencies. It is a story about money.

The year 2025 has made one thing clear: stablecoins have established a firm foothold, and their underlying infrastructure will become the foundation for financial services in the next decade.

As the year draws to a close, I have been reflecting on the stage we are at, the lessons learned in 2025, and the future direction. Here are my observations on the stablecoin economy as we approach 2026.

A few preliminary notes:

• Claude and Deni have also contributed to this article.
• Squads is a fintech company, not a bank or digital asset custodian.
• The content of this article does not constitute financial advice.
• The charts and images are generated by Nano Banana, inspired by the aesthetics of Tom Sachs, whom I greatly admire.

Data Overview

In 2025, the stablecoin market size broke through $300 billion, up from just $205 billion at the start of the year. In less than twelve months, the new supply approached $100 billion.

By comparison: the total supply growth for all of 2024 was $70 billion, and in 2023 there was actually a decline.

These forecast figures reflect strong institutional confidence. JPMorgan predicts that in the coming years, the market cap of stablecoins will reach between $500 billion and $750 billion. Citibank’s baseline forecast is $1.9 trillion by 2030. Standard Chartered predicts it will reach $2 trillion by 2028. Today, stablecoin issuers are among the top ten holders of U.S. Treasuries worldwide.

This is no longer just a story about cryptocurrencies. It is a story about money. And capturing this growth through infrastructure, services, and products will become one of the most valuable pursuits in the next ten years.

What We Learned from the Synapse Incident

Part of what drove this transformation is the increasing recognition that stablecoin infrastructure provides fundamentally different trust assumptions. This is not only because building on stablecoins is cheaper and faster(, although that is true), but more importantly, because you are trusting mathematics and code, not centralized entities’ promises of “trust me, your money is safe.”

To understand why this matters, let’s look at what happened with Synapse.

Synapse Financial Technologies was once a paradigm of Banking-as-a-Service (BaaS). It received support from top-tier investors, connecting over 100 fintech partners with FDIC-insured banks, serving about 10 million end users. Its slogan was very clever: fintech companies could access banking services without becoming banks; banks could distribute without developing apps; consumers could enjoy modern experiences while being protected by traditional safeguards.

In April 2024, Synapse filed for Chapter 11 bankruptcy. Over 100,000 people lost access to their funds. The court-appointed trustee discovered a shortfall of $65 million to $96 million between what customers were owed and what the bank actually held. At a hearing in December 2024, the trustee (former FDIC Chair) compared this situation to her father’s experience of deposit zeroing during the disintegration of Yugoslavia.

The root cause was a failure in the middleware layer’s accounting records and reconciliation breakdowns. Synapse was responsible for tracking asset ownership between fintech firms and banks. When this system failed, there was no traceable “truth.” Banks blamed each other. Fintechs had no direct relationship with customer funds. Ordinary people watched helplessly as their savings vanished into bureaucratic uncertainty.

The crypto space has also experienced its own catastrophic failures: FTX, Celsius, Terra/Luna. But these failures stemmed from centralized custodians making high-risk bets with deposit assets. Their failures are similar to Synapse’s: opaque systems that only reveal the truth when it’s too late.

The lessons from traditional fintech failures and crypto failures are the same: when you cannot see where the money is, you cannot know if it is safe.

( Self-Custody and Insurance Issues

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Self-custody stablecoin accounts change the risk model in a way that makes FDIC insurance less necessary in many use cases.

Traditional banking operates on a fractional reserve basis. When you deposit funds, banks lend out most of it, keeping only a small fraction on hand. Your “balance” is just an IOU. If enough people demand withdrawals simultaneously, or if loans turn bad, the money might not be there. FDIC insurance is designed to prevent this failure mode. It insures your funds against mismanagement by the bank.

Self-custody stablecoin accounts work differently. Assets are stored in smart contracts. At any moment, anyone can verify whether the funds are there. Not as an IOU, not as a claim on reserves, but as actual assets under user control. There is no counterparty risk from bank lending decisions.

But this argument often misses one point: stablecoins themselves carry issuer risk. A smart contract filled with USDC is useless if its issuer, Circle, faces regulatory crises or reserve runs. Holding USDT is essentially a bet on Tether’s reserve management. Self-custody eliminates intermediary risk but does not eliminate issuer risk.

The difference is that issuer risk is monitorable. You can check reserve proofs. You can observe on-chain fund flows. You can diversify across different issuers. Traditional bank risk, on the other hand, is hidden inside the institution’s black box until a disaster occurs.

This does not mean self-custody is suitable for everyone. Large institutions may still need regulatory frameworks and insurance products. But for many use cases, a self-custody model with monitorable issuer risk is superior to opaque institutional trust requiring insurance backstops.

( Global Reach and the Last Mile Challenge

Stablecoins offer something that traditional fintech cannot: true global reach from day one.

A wallet can be used anywhere. Smart contracts do not care about jurisdiction. Transactions among stablecoins are inherently borderless. For businesses paying remote contractors, managing cross-entity funds, or settling with suppliers accepting stablecoins, this infrastructure can operate instantly and globally.

Compare this with traditional international expansion: you need local banking partners, local licenses), which often require different licenses for different activities###, local compliance teams, local legal entities. Each country is essentially a new startup. That’s why most digital banks operate only domestically or take years to expand to a few markets.

Revolut has been working for nearly a decade without full coverage.

The bottleneck in stablecoin infrastructure is the “last mile”: connecting to fiat currency. Fiat on- and off-ramps still require local licenses and local partners. You cannot fully escape this.

But the difference between “we need to solve fiat connectivity in this market” and “we need to rebuild the entire banking stack in this market” is vast. The “last mile” is modular. You can partner with local fiat on/off ramps without rebuilding core infrastructure from scratch. You can reach most of the world via stablecoin channels and then gradually onboard fiat partners where needed.

Traditional fintech cannot launch services in a market without building a complete tech stack. Native stablecoin companies are global from inception and gradually solve the last mile as needed. This is a fundamentally different expansion paradigm.

( The Battle of Blockchain Built for Specific Purposes

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Several well-funded teams are building new blockchains specifically for stablecoin payments. The core idea: existing blockchains are optimized for trading, not payments, and purpose-built infrastructure can offer better throughput, lower latency, and compliance tools tailored for payments.

It’s a reasonable idea, proposed by smart people. Stripe and Paradigm are building Tempo, Circle is building Arc.

But there is a counterpoint worth pondering.

Building a new Layer 1 from scratch means trust must be rebuilt from zero. Blockchains are trust machines, and trust is accumulated through operation. It comes from years of failure-free records, safeguarding billions in funds without vulnerabilities, from a developer ecosystem that deeply understands edge cases, from code that has withstood attacks. This is the Lindy effect (Lindy effect) applied to infrastructure.

Mature chains have this accumulated trust. Solana has processed trillions of dollars in transactions, with robust tools, wallets, bridges, and integrations. Ethereum’s operational history is even longer. The question is whether the gap between what these chains currently offer for payments and the trust they have built exceeds the trust gap new chains must fill.

There is also the consideration of neutrality. Chains controlled by large payment companies, regardless of how “neutral” they claim to be, embed the interests of those companies into their architecture. Building on truly neutral public infrastructure can provide different guarantees.

( Agentic Finance )Agentic Finance###

Today, when people talk about Agentic Finance, they often imagine intelligent agents managing your financial life: making investment decisions, managing your portfolio, optimizing your entire financial existence.

But that’s not the real opportunity, at least not yet.

The real opportunity lies in the mundane and boring parts. Automating agents to handle routine financial processes that currently require manual intervention: monitoring invoices, matching them with purchase orders, initiating payments, handling reimbursements, executing periodic trades. Not replacing human judgment on key decisions, but automating tedious, operationally resistant tasks.

The question is: how do these agents actually move funds?

Traditional payment channels are designed for humans. They assume the initiator is a person with credentials. Giving an agent bank login credentials is a security nightmare and a compliance violation. Agents might hallucinate, be manipulated, or make errors at machine speed.

This is where stablecoin channels and smart contracts become truly important. Agents do not get credentials; they get a set of permissions encoded in smart contracts: each transaction can move up to X dollars, only to pre-approved addresses, only at certain times or for specific purposes. These constraints are enforced by code. Agents are structurally incapable of overreach because the permissions are baked into the architecture.

The verifiable, bounded, transparent trust assumptions provided by blockchain are exactly what is needed when software autonomously moves funds. Traditional systems require you to trust the agent not to misbehave. Smart contract systems make misbehavior impossible within the defined constraints by design.

This does not eliminate all issues. What happens when an agent makes a mistake within its permissions? Who is responsible if an agent approves a fraudulent invoice that appears compliant? These questions need answers.

But the starting point—permissions enforced by architecture—is inherently a blockchain feature, very hard to retrofit onto traditional channels. Autonomous finance will arrive. Its secure infrastructure will necessarily be stablecoin-native.

( Reflection on Security Issues

The gold rush in stablecoins is attracting teams with very different security philosophies. Unfortunately, for some of these teams)and their customers###, the outcome will not be good.

A pattern is emerging: rapid action, gaining users, then solving problems later. Teams use vague “self-custody” definitions that obscure the actual trust model. They rush to integrate without proper security and vendor vetting. They take shortcuts in key management. They treat operational security as a cost center.

Some of this is understandable. The market is evolving fast. Competition is fierce. Spending several months on security might mean losing market share to competitors.

This trade-off makes sense in most industries. But not in financial infrastructure.

Building a bank or similar institution means establishing trust over decades, not quarters. It means even aggressive growth strategies must be risk-averse. It means creating systems that can handle unforeseen edge cases.

Teams that succeed in 2026 and beyond will be those with real domain expertise and a security-first mindset.

( Privacy Challenges

One non-mainstream view I hold is that, so far, privacy issues in crypto have largely been a checkbox concern. For trading, DeFi, and speculation, lack of substantial privacy has not been a barrier. The ecosystem has functioned well with pseudonymous addresses and transparent transaction histories.

But as stablecoin infrastructure brings real business activity and productive economic activity on-chain, this will change.

When real companies use stablecoin channels for operations, privacy becomes critical. Competitive intelligence leaks are a real concern: your suppliers, customers, cash flows are all visible to anyone willing to look. No serious company wants its financial operations exposed to competitors, and no CFO will want to move large funds through channels where every transaction can be publicly analyzed.

This is a problem we need to solve today, to prevent it from becoming a bottleneck for future adoption.

The good news is that stablecoin privacy models do not require full-blown crypto-anarchy. We do not need complete anonymity. What we need is selective disclosure—a fundamentally different goal.

Selective disclosure means: proving what needs to be proven without revealing everything else. Proving you have sufficient funds without showing your balance; proving a transaction is compliant without exposing counterpart details; proving your identity meets requirements without submitting documents. Fund owners see everything; the system can verify compliance; others see only what is deliberately disclosed.

We have the technology to solve this. I have spoken with many outstanding teams building privacy infrastructure.

The challenge is that this technology is still early. These codebases are large, hard to audit, difficult to formally verify, and untested in production. They require trust and security assumptions very different from what we have built into existing infrastructure. The crypto ecosystem has spent years strengthening core protocols, accumulating operational trust through attack and edge case resilience. Adding new, unproven privacy layers risks undermining this foundation.

The real challenge is how to add privacy features without compromising security significantly. This might mean embedding privacy more deeply into the first layer protocol or finding ways to avoid relying on large-scale trust in new cryptographic systems.

) Looking Ahead

The growth story of stablecoins in 2025 mainly revolves around migrating existing fintech functions onto better infrastructure: payments, yields, consumption, card services. Like the globalized Mercury or on-chain Revolut. That’s good. It’s faster, cheaper, and can reach markets that took years of traditional effort.

But what stablecoin channels unlock is much bigger than just doing the same things more efficiently. You get programmable money. You connect to the networked capital markets, where new financial primitives are built daily. You gain the ability for intelligent agents to manage funds under truly secure conditions—not just trusting they won’t do harm.

This is a chance to rethink what financial services should really be.

I have yet to see enough teams pursue this vision. The opportunity is right in front of us, yet most industry participants are still running 2015 fintech playbooks on a new track. I hope to see this change by 2026.

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