Stablecoins Won't Scale Without Banks

Stablecoins were designed to bypass the traditional banking system, but companies scaling them are actually integrating deeper into the banking infrastructure than initially anticipated. Stripe acquired Bridge for $1.1 billion, and Citi is now offering crypto custody services. Standard Chartered is testing stablecoin settlement in Singapore.

These entities are all gravitating towards a similar banking-centric architecture for handling payments. A cross-border payment typically involves three stages: the payer transferring funds locally, the payee receiving their funds locally, and the middle step of moving value across borders between institutions. This middle step used to be facilitated through correspondent banking and SWIFT messages, which added both time and costs.

However, when both institutions accept a stablecoin, the payment settles on-chain almost instantly. Banks still play a crucial role in the other two stages. Stablecoins handle the middle stage, while banks handle the entry and exit points, compliance requirements, and local payment rails in each market the transaction touches. Companies leveraging stablecoin-based payment rails are building connections with banks, one corridor at a time.

In fact, every enterprise payment flow ultimately begins in a bank account. From payroll and vendor invoices to customer revenue and capital distributions, all these transactions move through regulated financial infrastructure, regardless of the payment provider's chosen technology. The scale of this issue becomes clear when considering that the cross-border payments market reached $208 trillion in 2025, making up roughly 0.02% of global payment volume, according to McKinsey and Artemis.

Most of the $30 trillion or more in annual stablecoin volume actually consists of bots, exchange flows, and automated trading, rather than actual payments. Companies face a dilemma when deciding which banking infrastructure connects reliably to which settlement rails, and who has built it deep enough to handle institutional volumes.

At $50 million in annual payment volume, one banking relationship, one stablecoin issuer, and one compliance layer may suffice. At $500 million, those partners become insufficient. At $10 billion, the critical question shifts from technology quality to the number of corridors their banking, FX, and licensing stack can actually accommodate.

In Brazil, for instance, the instant payment system Pix processed over R$35 trillion in 2025, with 47% of that value in B2B transactions. Both BRL settlement and local rails are essential for institutional payments. Building the necessary banking infrastructure takes years of relationship-building with banks, regulators, and local counterparties.

However, most stablecoin companies struggle with volume growth at this stage. They often depend on a single banking partner, which can lead to significant operational risks. Bank exits, regulatory shifts, and changes in management can all result in the collapse of payment corridors. Recent events, such as the FTC's warning letters to PayPal, Stripe, Visa, and Mastercard over debanking practices, underscore this risk.

In March 2026, the FTC issued formal warning letters to these companies. The GENIUS Act, passed in July 2025, ties stablecoin issuance to bank-grade reserve, disclosure, and licensing requirements. Even non-bank issuers are increasingly partnering with banks and seeking bank-custodied reserves. The demand for stablecoin payments is growing, but the bottleneck is the banking infrastructure that these companies have yet to build.