Stablecoins are breaking away from cryptocurrency, becoming the next generation of infrastructure for global payments

Author: Prathik Desai

Compiled by: Block unicorn

Introduction

Everyone agrees that stablecoins are thriving. Their circulating supply has more than doubled, and the adjusted trading volume has increased more than twofold. All of this has happened in just two years. Last month, the monthly adjusted trading volume of stablecoins hit an all-time high. Some people are skeptical of these numbers, while the cryptocurrency Twitter community (CT) is celebrating.

However, numbers alone do not tell the whole story of growth. Equally important is the context in which the growth occurs, such as who is using stablecoins, for what purposes, and whether usage patterns are changing. Allium has generously provided us with an early look at their latest report on stablecoin infrastructure, "Stablecoins: The Rise of a New Payment Channel." This report is worth reading, as its charts show that the use of stablecoins is shifting from enabling low-cost cross-border remittances to supporting general commercial activities and vendor payments between enterprises.

Most of the current debates surrounding stablecoins focus on whether they are financial products (such as narrow banks, treasury wrappers, yield instruments) or merely payment infrastructure. Discussions at the policy level about the future of stablecoins are based on the premise that stablecoins are primarily a financial tool. However, the data in the report suggests otherwise. The composition of recent stablecoin trading activity increasingly resembles a payment channel rather than a savings product.

This mirrors the development pattern of the Automated Clearing House (ACH) network: from replacing paper checks in payroll to becoming a foundational infrastructure for general commerce, B2B payments, and consumer bill payments.

In today's in-depth analysis, I will combine data from Allium's stablecoin infrastructure report to illustrate how it has changed my perspective on the direction of stablecoin development.

Speed Differentiation

Since January 2024, the circulating supply of stablecoins (calculated by subtracting non-circulating supply from total supply) has grown by over 100%. During the same period, the adjusted trading volume (calculated by excluding wash trading, internal flows, and round-trip transfers) has increased by 317%.

In any accumulation phase of a new asset, supply typically grows faster than usage. As the asset matures, usage growth will outpace supply growth. This is because asset holders will use the asset more. Here, the fact that the adjusted trading volume of stablecoins is growing much faster than the circulating supply indicates that stablecoins have evolved from a value storage asset into a more ideal medium for value exchange or transfer.

This shift is also reflected in the velocity of stablecoins, which is the adjusted trading volume divided by the circulating supply.

Over the past two years, the transaction velocity of stablecoins has increased from 2.6 times to over 6 times, meaning the turnover rate of each dollar of stablecoin has increased by 2.3 times since January. When compared to traditional payment systems, it is evident that the application of stablecoins has matured significantly.

Another indicator of the maturity of stablecoin usage is the number of transactions. It is minimally affected by large transaction fluctuations. Therefore, when the growth rate of payment transaction numbers exceeds that of trading volume, it indicates that the average payment amount is declining. This phenomenon typically suggests that the payment system is gradually stabilizing rather than being an experimental tool promoted between exchanges.

This raises the question: who is making all these payments, and for what purposes are they being made?

By 2025, consumer-to-consumer (C2C) channels will still be the largest channel, ahead of consumer-to-business (C2B), business-to-business (B2B), and business-to-consumer (B2C) channels. However, its growth rate is the slowest among the four channels.

The slowdown in C2C transaction growth highlights the maturity of stablecoin applications, as person-to-person transfers are the simplest use case. They require no merchant integration, no invoicing tools, no APIs, and have very few barriers to adoption. Every new payment technology typically starts this way.

When India launched the Unified Payments Interface (UPI) a decade ago, retail users were the first to join, largely due to cashback and other customer acquisition strategies. I remember people transferring money between their two accounts using Google Pay (initially named Tez in India) because it offered a $1 cashback at the time. It wasn't until commercial tools, reports, and dedicated payment confirmation voice device systems were introduced that stores and merchants began to join.

As infrastructure matures, commercial use cases begin to capture a larger market share. This shift seems to be happening.

The rapid growth in the C2B sector indicates that more users are using stablecoins for general commercial activities, subscription services, and merchant payments. Meanwhile, the growth in the B2B sector suggests that business counterparties are applying stablecoins for invoicing, supply chain payments, and capital operations. The growth rates for C2B and B2B are 131% and 87%, respectively, both exceeding the overall payment growth rate of 76%, indicating that the share of commercial payments in total payments is expanding.

Combining the continuously growing C2B transaction volume with the average unit price of C2B transactions (which has decreased from $456 to $256) suggests that people are using stablecoins to pay for regular purchases, indicating a trend.

Although peer-to-peer (P2P) models still dominate in absolute numbers, they are quickly giving way to point-to-point models.

Quarterly market share data makes this rotation even more evident.

Since falling below 50% in Q1 2025, the percentage of C2C payments in total payments has never exceeded 50%.

The world seems to be moving beyond the experimental phase of using stablecoins for low-risk, infrequent peer-to-peer transfers, shifting towards their continuous use for frequent payments.

However, the data shows a different situation. When I first began to pay attention to the adoption of stablecoins, one of the mainstream views supporting stablecoins was that they could facilitate cross-border remittances and potentially disrupt the Western Union model by allowing workers in developed economies to send money home. But the data shows a different outcome.

Currently, about three-quarters of stablecoin payment transactions occur domestically. Over the past year, the share of cross-border payment transactions has decreased from 44% to about 25-29%. At the regional level, 84% of payment transactions still occur within the same geographical area.

Based on all our previous charts, it is clear that stablecoins are not competing with SWIFT for the international settlement market. Instead, B2B indicators, including a 74% domestic market dominance, declining average transaction sizes, increasing applications for payroll settlements, and expanding invoicing applications, suggest that stablecoins are competing with domestic payment channels like ACH.

For reference, B2B payments via ACH grew by about 10% in 2025, while stablecoin B2B payments grew by 87% during the same period. I realize that the absolute scales of the two cannot be directly compared, and we must also consider the impact of the lower base for stablecoins. However, this growth momentum cannot be ignored.

The Long Road Ahead

For a long time, I believed that cross-border remittances and peer-to-peer transfers were the main drivers of stablecoin adoption. Imagine someone in Asia receiving dollars from relatives in Dubai during a bank holiday without paying a 7-8% intermediary fee; it is indeed an attractive story. This story still exists, but perhaps it is no longer mainstream.

I find it interesting that domestic commercial theories have quietly and rapidly surpassed everything else. The market share of the C2C category has not regained 50% for over a year, a fact that is rarely discussed in cryptocurrency circles. Yet this metric marks the transition of stablecoins from a crypto product to a financial infrastructure that supports commercial activities between consumers and merchants or between merchants.

It is also worth noting that Allium's payment volume analysis is based on the wallet data they have covered, identified, and labeled. Although this analysis shows that payment volume accounts for only 2-3% of the total adjusted stablecoin trading volume, this can only be considered a lower bound, as there are likely many wallets that Allium cannot cover.

Looking ahead, I will closely monitor whether the shares of C2B and B2B continue to grow, and whether the trend of decreasing average transaction amounts can be sustained in the coming quarters. If these two trends can persist even during downturns in the cryptocurrency market, it would indicate that the stablecoin payment infrastructure has begun to decouple from speculative cryptocurrency activities.