What did smart money see in BlackRock and Visa's high-stakes stablecoin gamble?

Author | Cathy , Plain Talk Blockchain (ID: hellobtc)

In January 2026, the total market capitalization of the global stablecoin market exceeded US$317 billion, setting a new historical record.

But what's truly noteworthy isn't the number itself, but the underlying trends: Circle's USDC surged 73% in 2025, marking the second consecutive year that its growth rate surpassed Tether's USDT (36%). And in December 2025, Visa announced the launch of USDC settlement services in the United States.

When the world’s largest payment network starts using stablecoins for settlement, when BlackRock, which manages $10 trillion in assets, issues on-chain money funds, and when JPMorgan Chase settles $3 billion a day via blockchain—what are these traditional financial giants really seeing?

01. Why are traditional financial giants going all-in on blockchain?

In March 2024, BlackRock launched BUIDL, a tokenized money market fund.

This isn't BlackRock's first foray into blockchain, but it's the first time it's been so aggressive. BUIDL is issued directly on the public blockchain, holding US Treasury bonds and cash, maintaining a net asset value of $1, and distributing monthly returns to holders.

BUIDL surpassed the $1 billion mark in March 2025, becoming the first on-chain fund to reach this size. By the end of 2025, its size had exceeded $2 billion, making it the largest tokenized fund to date.

What did BlackRock see?

The answer is simple: efficiency and cost.

Traditional money market funds require T+1 or T+2 settlement for subscriptions and redemptions, and cross-border transfers go through the SWIFT system, incurring multiple layers of fees. In contrast, on-chain funds allow transfers in seconds, with fees of less than $1, and operate 24/7.

More importantly, BUIDL opens up a completely new distribution channel. In the past, it was difficult for retail investors to directly buy money market funds (the threshold was usually over $1 million). But through blockchain, anyone can buy them.

This is why protocols like Ondo Finance have been able to rise to prominence.

Ondo's strategy is simple: repackage BlackRock's BUIDL and other institutional-grade RWA products into smaller units and sell them to DeFi users. Its OUSG product invests directly in BUIDL, allowing ordinary users to enjoy the 4-5% annualized yield of US Treasury bonds.

The tokenized US Treasury bond market experienced explosive growth in 2025, surging from less than $200 million at the beginning of 2024 to over $7.3 billion by the end of 2025 (RWA.xyz data). BlackRock's entry into the market, to some extent, provided compliance endorsement for the entire RWA sector.

02. Why choose USDC instead of USDT?

Tether (USDT) remains the king of stablecoins, with a market capitalization of $186.7 billion and a market share of 60%.

But smart money is voting with its feet.

In 2025, USDC's market capitalization is projected to grow from approximately $44 billion to over $75 billion, representing a 73% increase. In contrast, USDT's market capitalization will only grow by 36%, from approximately $137 billion to $186.7 billion. This marks the second consecutive year that USDC's growth rate has exceeded that of USDT.

Why?

The answer is: regulation.

On July 18, 2025, the U.S. President signed the GENIUS Act, the first federal legislation in the United States specifically targeting stablecoins. The act requires that "payment stablecoins" must have 100% reserves (cash or short-term Treasury securities) and cannot pay interest to users.

Circle's USDC fully complies with this standard. Furthermore, Circle became the first global issuer to obtain MiCA compliance status across the entire European Union.

what does that mean?

This means that USDC has obtained a passport to enter the mainstream financial system.

When Stripe selects stablecoin payments, it chooses USDC. When Visa introduced stablecoin settlements, it chose USDC. When Shopify allows merchants to accept stablecoins, it supports USDC.

For banks, payment companies, and compliant exchanges, USDC is a "whitelisted asset," while USDT faces delisting pressure in Europe due to issues with reserve transparency.

But Tether is not worried.

Because its main battleground is not in the United States and Europe, but in high-inflation regions—Latin America, Africa, and Southeast Asia.

In high-inflation countries like Argentina, Turkey, and Nigeria, USDT has effectively replaced some of the functions of their local currencies, becoming a de facto "shadow dollar." The first thing people do after receiving their wages is to exchange them for USDT to preserve their value.

The stablecoin market is diverging into two clear paths:

USDC: A compliance-oriented platform serving European and American institutions and payment scenarios; its investors include top institutions such as BlackRock, Fidelity, and General Catalyst.

USDT: An offshore route serving emerging markets and trading scenarios, holding an irreplaceable position in the Global South.

03. Surrender or evolution of payment giants?

In December 2025, Visa announced the launch of USDC settlement services in the United States.

This is a historic moment.

Previously, Visa's business model involved charging a fee of 1.5%-3% on each transaction. Now, it allows partners to settle in USDC, significantly reducing fees.

This looks like a self-revolution. But in reality, Visa is engaging in a defensive offensive.

What threats does Visa see?

Stablecoins are eroding its core business – cross-border payments.

Traditional cross-border payments involve multiple agent banks, each charging its own fees, and take 3-5 days to arrive. Stablecoin payments, on the other hand, arrive in seconds with fees of less than $1.

According to an a16z report, the total transaction volume of stablecoins reached $46 trillion in 2025 (surpassing Visa), with adjusted payment/settlement volume of approximately $9 trillion. The growth rate is quite rapid, and it is eroding the market share of cross-border and emerging markets.

Visa's strategy is: if you can't beat them, join them.

By launching USDC settlement services, Visa transformed itself from a "payment gateway" into a "payment coordinator." Instead of charging exorbitant fees, it generates revenue by providing value-added services such as compliance, risk control, and anti-money laundering.

Meanwhile, other payment giants are also taking action:

Stripe: In October 2024, it acquired stablecoin infrastructure platform Bridge for $1.1 billion, one of the largest acquisitions in crypto history.

PayPal: Its stablecoin PYUSD is projected to surge 600% in 2025, from $600 million to $3.6 billion.

Western Union: USDPT stablecoin to launch on Solana in the first half of 2026

Ten European banks have jointly established Qivalis, with plans to launch a euro stablecoin in the second half of 2026.

It is worth noting that Western Union and Visa's initial partners both chose Solana as their settlement chain, highlighting the advantages of high-performance public chains in payment scenarios—high throughput and low transaction fees.

04. Banks will not sit idly by and wait for their demise.

Faced with the combined pressure from non-bank institutions (Circle, Tether) and payment giants (Stripe, Visa), banks did not sit idly by.

JPMorgan is the most radical one.

In early 2026, JPMorgan expanded its blockchain division, Kinexys, to the Canton Network to enable multi-chain interoperability. This is not a publicly traded stablecoin, but rather a "deposit token."

Kinexys' daily transaction volume exceeds $3 billion. It primarily serves multinational corporations like Siemens and BMW, enabling them to transfer funds between their global subsidiaries within seconds.

JPMorgan's logic is very clear:

We don't need to issue tokens on public blockchains to compete with you. We just need to keep our customers on a private blockchain, using blockchain technology to improve efficiency without relinquishing control.

In Europe, Société Générale has gone even further. Its subsidiary, SG-FORGE, issued the euro stablecoin EURCV and the dollar stablecoin USDCV, marking the first stablecoins issued by a regulated bank on a public blockchain (Ethereum) and listed on compliant exchanges such as Bitstamp.

However, it's important to note that bank-backed stablecoins like JPM Coin and USDCV primarily serve corporate clients and are not geared towards the retail market. They represent a path where traditional financial institutions embrace blockchain technology but maintain centralized control.

05. Stablecoin trend emerges

In summary, the stablecoin market in 2026 is showing four clear trends:

RWA tokenization accelerated

BlackRock, Ondo, and Franklin Templeton are all issuing tokenized US Treasury bonds and money market funds. This sector experienced explosive growth in 2025, surging from less than $200 million at the beginning of 2024 to over $7.3 billion, an increase of more than 35 times. Traditional financial institutions are using tokenization to bring US Treasury yields into the on-chain world.

The compliance path is becoming increasingly clear

USDC grew by 73%, surpassing USDT for two consecutive years. Following the passage of the GENIUS Act, compliance has become the only option for mainstream institutions. Circle's investors include top institutions such as BlackRock and Fidelity. If its 2026 IPO plan materializes, it will be a significant milestone for the stablecoin industry.

Payment infrastructure restructuring

Stripe's $1.1 billion acquisition of Bridge, Visa's launch of USDC settlement, and PayPal's PYUSD surge by 600% all point to traditional payment giants integrating stablecoins into their infrastructure rather than passively defending against them. High-performance public blockchains like Solana, due to their advantages in payment scenarios, are becoming the preferred choice for enterprise-level applications.

Market differentiation intensifies

Stablecoins are no longer synonymous with "stability." They are diverging into two distinct tracks:

Payment-type stablecoins (USDC, PYUSD): do not generate interest, but are backed by compliance, serving institutions and merchants.

Yield-paying stablecoins (Ondo USDY, Ethena USDe): Offer 4-5% annualized yields, attracting DeFi funds.

06. Summary

When BlackRock started launching on-chain funds, when Visa started settling in USDC, and when JPMorgan settled $3 billion a day—stablecoins are no longer just a "crypto" story, but the prelude to the restructuring of the entire financial system.

This is not hype, nor is it just a concept. In 2025, the total transaction volume of stablecoins reached $46 trillion, and the adjusted payment/settlement volume reached $9 trillion. This represents real commercial circulation of real money.

The entry of traditional financial giants signifies that stablecoins are transforming from "crypto toys" into "global financial infrastructure." For those following this market, the key is not predicting the next hot trend, but understanding the underlying logic of this transformation.

Smart money is already in action.