In 2025, stablecoins settled more transactions than Visa, with real-world stablecoin payments doubling to $400 billion and adjusted transaction volume reaching $10.9 trillion, according to latest reports. Total stablecoin settlement volume hit $33 trillion in 2025, surpassing Visa's annual throughput, with Morph's research projecting 2026 stablecoin settlement could top $50 trillion. Sixty percent of the $400 billion in real-world payments was business-to-business activity - companies paying suppliers, settling cross-border invoices, managing treasury, and moving payroll. Visa, Mastercard, Stripe, PayPal, and Western Union all turned on stablecoin rails inside their existing products, with Visa's stablecoin settlement program hitting a $7 billion annualized run rate in late April 2026, up fifty percent from the previous quarter. The GENIUS Act became U.S. law in July 2025, giving banks and regulated firms a legal framework to issue and integrate stablecoins, accelerating adoption across the financial sector.
The United States strategy centers on stablecoins like USDT and USDC, which now hold approximately $113 billion in U.S. Treasuries as of Q1 2026, according to reports. Fiat-backed stablecoin supply crossed $319 billion in April 2026, representing a forty-fold expansion from roughly $7 billion six years earlier. Tether's USDT holds roughly $189.6 billion in circulation while Circle's USDC sits at around $77.6 billion, together accounting for well over eighty percent of the global stablecoin supply. Ninety-nine percent of fiat-backed stablecoin value is pegged to the dollar, while the remaining one percent includes the euro, yuan, and other currencies combined, reinforcing demand for U.S. dollar assets. The GENIUS Act explicitly addresses failure modes and provides a comprehensive regulatory framework for stablecoin issuance and operation, though the law's allowance for issuers to hold uninsured bank deposits as reserves has drawn warnings from observers.
China's e-CNY has achieved significant cross-border adoption through Project mBridge, which processed over $55 billion in transactions by late 2025, with the e-CNY accounting for more than 95 percent of mBridge settlement volume. As reported, cross-border e-CNY activity reached roughly $2.38 trillion by November 2025, representing an 800 percent expansion since 2023. The People's Bank of China made a structural change on January 1, 2026, allowing banks to pay interest on verified digital yuan wallets and treating the e-CNY as a deposit-like instrument with national deposit insurance coverage. 180 million wallets have been created with 29 pilot cities integrated into public transit and retail systems. China's approach focuses on state control and alternative settlement networks, building a sovereign, interest-bearing digital currency system that bypasses the dollar for cross-border trade within its political and trade alliances.
Despite de-dollarization efforts from BRICS nations, the dollar's share of foreign exchange transactions increased to 89.2 percent in April 2025 from 88.4 percent in 2022, according to the Bank for International Settlements' 2025 Triennial Survey. The renminbi's share rose to 8.5 percent, but remains a fraction of the dollar's dominance. The paradox is that stablecoins, which allow transactions without touching U.S. banking systems, are overwhelmingly dollar-pegged with 97 percent of the market denominated in dollars. This creates a contradiction where even workarounds reinforce the dollar system, as noted by Tether's CEO Paolo Ardoino, who argues that stablecoins like USDT reinforce dollar hegemony by offering decentralized alternatives that remain dollar-pegged. Despite efforts by BRICS and others to de-dollarize, dollar-pegged stablecoins dominate global digital settlements, reinforcing demand for US assets and maintaining the dollar's central position in digital finance.
The competition extends beyond the U.S.-China binary, with the European Union's MiCA regulation creating a comprehensive stablecoin licensing framework and the European Central Bank developing a digital euro with implementation expected in 2027 and beyond. The Global South represents 400 million-plus users who rely on dollar-backed stablecoins, many in jurisdictions where their governments would prefer they not use the dollar. Three key factors will determine the race's outcome: how the e-CNY's interest-bearing transition affects cross-border adoption, whether the U.S. can maintain stablecoin expansion without political backlash, and technological developments in programmable money and AI-driven transactions. The winner will likely be the system that captures the next layer of finance, with the US holding advantages in developer momentum and open networks, while China benefits from state coordination and mandated adoption capabilities. This competition will shape the architecture of global finance for decades, with the outcome determining whether digital money remains dollar-dominated or splits into competing blocs.
