BlackRock and Visa's bold bet on stablecoins, what are the smart money seeing?

Author | Cathy, Plain Blockchain (ID: hellobtc)

In January 2026, the total market capitalization of global stablecoins surpassed $317 billion, reaching a record high.

But what’s truly worth paying attention to isn’t this number itself, but the trends behind it: Circle’s USDC surged 73% in 2025, outpacing Tether’s USDT (36%) for the second consecutive year. In December 2025, Visa announced the launch of USDC settlement services in the United States.

When the world’s largest payment network begins settling with stablecoins, when asset manager BlackRock issues on-chain money market funds holding $100 trillion in assets, and when JPMorgan settles $3 billion daily via blockchain—what are these traditional financial giants seeing?

01. Why are traditional financial giants all in on the chain?

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

This isn’t BlackRock’s first attempt at blockchain, but it’s their first such aggressive move. BUIDL is issued directly on a public chain, holding U.S. Treasuries and cash, maintaining a $1 net asset value, and distributing earnings monthly to holders.

BUIDL broke the $1 billion mark in March 2025, becoming the first on-chain fund to reach this scale. By the end of 2025, its size 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. On-chain funds, however, transfer in seconds, with fees under $1, and operate 24/7.

More importantly, BUIDL opened a brand-new distribution channel. In the past, retail investors found it difficult to directly buy money market funds (usually requiring over $1 million minimum). But through blockchain, anyone can buy.

This is why protocols like Ondo Finance can rise.

Ondo’s approach is straightforward: repackage BlackRock’s BUIDL and other institutional-grade RWA products into smaller shares and sell them to DeFi users. Its OUSG product directly invests in BUIDL, allowing ordinary users to enjoy annual yields of 4-5% on U.S. Treasuries.

The tokenization of U.S. Treasuries exploded in 2025, skyrocketing from less than $200 million at the start of 2024 to over $7.3 billion by the end of 2025 (RWA.xyz data). BlackRock’s entry, to some extent, provided regulatory legitimacy for the entire RWA sector.

02. Why choose USDC instead of USDT?

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

But smart money is voting with its feet.

In 2025, USDC’s market cap grew from about $44 billion to over $75 billion, a 73% increase. Meanwhile, USDT only grew 36%, from about $137 billion to $186.7 billion. This marks USDC’s second consecutive year of faster growth than USDT.

Why?

The answer is regulation.

On July 18, 2025, the U.S. President signed the GENIUS Act, the first federal legislation targeting stablecoins in the U.S. The bill requires “payment stablecoins” to hold 100% reserves (cash or short-term government bonds) and prohibits paying interest to users.

Circle’s USDC fully complies with this standard. Moreover, Circle became the first global issuer to obtain full MiCA compliance from the European Union.

What does this mean?

It means USDC has gained access to the mainstream financial system.

When Stripe chooses stablecoin payments, it opts for USDC. When Visa launches stablecoin settlement, it chooses 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 pressures in Europe due to transparency issues regarding reserves.

But Tether isn’t worried.

Because its main battlefield isn’t in the U.S. or Europe, but in high-inflation regions—Latin America, Africa, Southeast Asia.

In countries like Argentina, Turkey, and Nigeria, USDT has already replaced some local currencies’ functions, becoming a de facto “shadow dollar.” The first thing people do after receiving wages is convert to USDT for value preservation.

The stablecoin market is diverging into two clear paths:

USDC: Compliance route, serving European and American institutions and payment scenarios, backed by top investors like BlackRock, Fidelity, and General Catalyst.

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

03. Are payment giants surrendering or evolving?

In December 2025, Visa announced the launch of USDC settlement services in the U.S.

This is a historic moment.

In the past, Visa’s business model involved charging 1.5%-3% per transaction. Now, it allows partners to settle with USDC, significantly reducing fees.

This appears to be a self-revolution. But in reality, Visa is engaging in defensive offense.

What threats does Visa see?

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

Traditional cross-border payments involve multiple correspondent banks, layered fees, and take 3-5 days to settle. Stablecoin payments, however, settle in seconds with fees under $1.

According to a16z’s report, in 2025, total stablecoin transaction volume reached $46 trillion (surpassing Visa), with an adjusted payment/settlement volume of about $9 trillion, growing rapidly and eating into cross-border/emerging market shares.

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

By launching USDC settlement services, Visa is transforming from a “payment channel” into a “payment orchestrator.” It no longer charges high fees but profits from providing compliance, risk management, and anti-money laundering services.

Meanwhile, other payment giants are also taking action:

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

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

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

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

Notably, Western Union and Visa’s first partners both chose Solana as the settlement chain, highlighting the advantages of high-performance public chains in payment scenarios—high throughput and low transaction costs.

04. Will banks sit idly by?

Faced with the pressure from non-bank institutions (Circle, Tether) and payment giants (Stripe, Visa), banks are not sitting still.

JPMorgan is the most aggressive.

In early 2026, JPMorgan expanded its blockchain division Kinexys’ JPM Coin to the Canton Network to enable multi-chain interoperability. It’s not a publicly traded stablecoin but a “deposit token.”

Kinexys’ daily transaction volume exceeds $3 billion. It mainly serves multinational corporations like Siemens and BMW for global intra-company fund transfers within seconds.

JPMorgan’s logic is clear:

We don’t need to issue tokens on public chains to compete with you. We just need to lock our clients into private chains, using blockchain technology to improve efficiency without losing control.

In Europe, Crédit Agricole is taking it even further. Its subsidiary SG-FORGE issued euro stablecoin EURCV and dollar stablecoin USDCV, the first stablecoins issued on a public chain (Ethereum) by a regulated bank, listed on compliant exchanges like Bitstamp.

However, it’s important to note that bank-issued stablecoins like JPM Coin and USDCV mainly serve corporate clients and are not aimed at retail markets. They represent a path where traditional financial institutions embrace blockchain technology while maintaining centralized control.

05. Emerging trends in stablecoins

To summarize, the stablecoin market in 2026 is showing four clear trends:

RWA Tokenization Accelerates

BlackRock, Ondo, Franklin Templeton are issuing tokenized U.S. Treasuries and money market funds. This sector experienced explosive growth in 2025, skyrocketing from less than $200 million at the start of 2024 to over $7.3 billion, a 35-fold increase. Traditional financial institutions are tokenizing to bring U.S. Treasury yields into the on-chain world.

Regulatory Path Becomes Clearer

USDC grew 73%, surpassing USDT for two consecutive years. After the GENIUS Act’s passage, compliance has become the mainstream choice for institutions. Backed by top investors like BlackRock and Fidelity, if its 2026 IPO plans materialize, it will be a major milestone for the stablecoin industry.

Payment Infrastructure Rebuilt

Stripe’s $1.1 billion acquisition of Bridge, Visa’s USDC settlement launch, and PayPal’s 600% surge in PYUSD—traditional payment giants are integrating stablecoins into their infrastructure rather than passively resisting. High-performance chains like Solana are becoming preferred platforms for enterprise applications due to their high throughput and low costs.

Market Divergence Intensifies

Stablecoins are no longer just “stable.” They are diverging into two distinct tracks:

Payment stablecoins (USDC, PYUSD): No interest, but with regulatory backing, serving institutions and merchants.

Yield-bearing stablecoins (Ondo USDY, Ethena USDe): Offering 4-5% annual yields, attracting DeFi funds.

06. Summary

When BlackRock starts issuing on-chain funds, when Visa begins settling with USDC, and when JPMorgan settles $3 billion daily—stablecoins are no longer just a “crypto” story but the beginning of a broader financial system overhaul.

This isn’t hype or concept. In 2025, total stablecoin transaction volume reached $46 trillion, with $9 trillion in adjusted payment/settlement volume. These are real business flows.

The entry of traditional financial giants signifies that stablecoins are transforming from “toys of the crypto world” into “foundations of global finance.” For those paying attention, it’s not about predicting the next hot spot but understanding the underlying logic of this transformation.

Smart money is already in action.