Stablecoins are doing something every financial institution should care about:
They turn dollars into always-on software: instant, global, 24/7 settlement on digital rails.
That’s the headline. But it’s not the story.
The story is that stablecoins weaken the assumptions the modern system quietly depends on:
- Money primarily lives as bank deposits
- Money moves through batch-based networks
- Money settles during business hours
- Control sits with the intermediaries who run those rails
Stablecoins break that. Dollars can sit outside traditional deposit accounts while still behaving like transactional cash, and move continuously without correspondent chains.
This is no longer theoretical. Stablecoins are now roughly $300B+ in circulation.
So here’s the real question:
If stablecoins become a mainstream money rail, who owns the infrastructure that makes them usable in regulated finance?
Because whoever owns that layer owns the economics.
Deposits Are the Prize (But Not the Only Prize)
This isn’t a “crypto” conversation. It’s a funding and control conversation.
Deposits, especially non-interest-bearing operating balances, are among banks’ cheapest sources of funding and a major driver of net interest margin. If those balances leak, banks don’t just lose payments volume. They lose their cost of capital advantage.
Even the Federal Reserve research community is modeling stablecoin adoption’s implications for deposits and intermediation because outcomes depend on what stablecoins substitute for and how issuers are regulated.
But deposits are only part of the prize.
A bank can retain deposits and still lose the war if it loses the rails, the customer interface, and the transaction data. When the money movement layer shifts elsewhere, the bank doesn’t just lose fees. It becomes nothing more than a regulated balance sheet behind someone else’s product & someone else’s brand. And then, the bank loses relevance.
Finance doesn’t change overnight. It changes through gradual re-plumbing, and then suddenly the old economics stop working. And if you’re not paying attention while the plumbing is being updated, you might be surprised when the water stops flowing.
The Part Everyone Skips: Trust Has to Scale First
Faster, cheaper, more transparent is the easy part to pitch.
The part that actually determines whether stablecoins become mainstream financial plumbing, is trust.
Not trust as a vibe. Trust as infrastructure:
- identity and KYB that works globally
- continuous monitoring, not one-time onboarding
- policies enforced inside the flow of funds
- audit trails regulators accept
- fraud controls that keep consumer and merchant experiences intact
That trust layer is still fragmented, and it’s the difference between stablecoins as a meaningful rail and stablecoins as a perpetual almost.
This is also why we invested in companies like AIPrise: building verification and compliance infrastructure that can keep up with always-on money, continuous KYC, ongoing monitoring, and the operational controls institutions need to scale.
And here’s what happens once trust does scale. Stablecoins stop being a payments innovation and start acting like a wedge.
The Wedge Is the Weapon
Square didn’t replace banks on day one. It started with a POS terminal, the wedge. Once Square owned the merchant workflow and the transaction stream, everything else became available: banking, credit cards, lending, treasury.
The bank didn’t lose because it couldn’t hold deposits. The bank lost because it stopped being the primary interface.
A wallet. A card. A checkout button. A payout rail. A treasury tool.
Once value lives and moves there, and once trust is strong enough, banks risk being relegated to a utility layer. You can keep the deposits and still lose the relationship.
The Stablecoin Winner Is Largely Decided. The Infrastructure Winners Aren’t.
Let’s be honest: most serious investors already agree that the “which stablecoin wins” debate is mostly over.
The stablecoin market has consolidated around a small number of issuers, and the token itself is becoming a commodity, an interface, not a moat.
Which is exactly why the real fight is shifting up the stack.
The durable winners will be defined by who owns the infrastructure that makes stablecoins safe enough, compliant enough, and integrated enough to become boring in institutional workflows, and who captures the economics that come with that.
What has to exist for that to happen? Where should founders be building & scaling now?
1) Compliance at internet speed
Always-on money needs real-time controls: sanctions screening, policy enforcement inside the flow of funds, and audit trails regulators accept.
2) Institutional custody + controllership
Permissions, key management, provable controls, and reporting that holds up in audits, especially when stablecoins sit inside nonbank platforms.
3) Treasury primitives for 24/7 money
Sweeps, programmable liquidity, intraday risk, dynamic collateral, policy-driven yield routing.
4) Orchestration and integration
Routing across rails, abstraction across chains and wallets, reconciliation, and ERP and payment stack integration.
5) Distribution
The choke point. The elegance of tokens alone won’t allow stablecoins to scale. Adoption must become low-risk & embedded in default workflows. And distribution is critical for adoption.
This is the war: distribution plus trust plus compliance plus integration.
And that war is already being fought, not in press releases, but in how the biggest institutions are rebuilding cash, settlement, and connectivity for a 24/7 world.
Three Endgames (And Why the Middle Wins)
The next phase won’t be decided by a better token. It will be decided by which architecture becomes default, and who owns control across architectures.
Endgame A: Banks win with tokenized deposits
Banks keep money inside the perimeter while modernizing settlement. Tokenized deposits preserve the existing bank structure while enabling on-chain settlement.
Need: orchestration, trust controls, and integration so clients don’t know or care which bank rail they’re on.
Endgame B: Stablecoins become the default transactional layer
Platforms own distribution; banks fade into utility balance sheets. Stablecoins win here because they’re composable and easy to embed into workflows.
Winners: whoever owns distribution and operating balances, and therefore owns the customer interface.
Endgame C: Hybrid coexistence (most likely)
Stablecoins plus tokenized deposits plus tokenized cash equivalents, like tokenized money market funds, coexist. In this world, issuers matter less than orchestrators, the AWS of tokenized cash that provides routing, controls, reconciliation, and treasury automation across forms and rails.
In other words, the middle wins, the layer that makes tokenized dollars safe enough, compliant enough, and integrated enough to be boring.
Our Bet
We’re most excited about the institutional adoption layer, the infrastructure that makes tokenized dollars boring: safe, regulator-ready, and embedded in default workflows.
That means backing the companies building:
- always-on compliance and auditability
- orchestration across rails, wallets, and ledgers
- treasury, liquidity, and collateral tooling
- integration and distribution into banks and enterprise workflows
- and most importantly, trust infrastructure that scales with 24/7 money
The rails are being laid now.
The question is who owns the plumbing, and who gets disintermediated when it works.
