FinTech and Big Finance Fight to Own the Stablecoin Stack

Stablecoins can no longer be viewed as a single product category. Recent developments point to their emergence as the foundation for a multi-layered infrastructure system, similar to the early architecture of the internet.

The headlines this week paint a picture of momentum. Visa and Bridge expanded their cross-border stablecoin capabilities. BitGo and SoFi announced a partnership around “stablecoin stack” infrastructure, with Mastercard joining as a distribution partner. PayPal is pushing stablecoins deeper into logistics and merchant settlement. Wirex reported a tenfold jump in stablecoin payment volume.

Meanwhile, central banks from the Federal Reserve to the European Central Bank have published new research examining both the risks and opportunities of stablecoins.

Add to that the ongoing policy debate in Washington over whether stablecoins should offer yield to holders, plus the milestone development of Kraken Financial gaining access to Federal Reserve infrastructure alongside new Office of the Comptroller of the Currency (OCC) charter applications from crypto-native platforms.

Taken together, these developments signal a structural shift: the standing up of a relatively complete ecosystem around stablecoins just as they begin to specialize by use case.

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The Rise of a Stablecoin Infrastructure Layer

Stablecoins are no longer just tokens circulating on blockchains. They are becoming the connective tissue of a new financial architecture that spans issuers, liquidity providers, custodians, payment networks FinTech platforms, and developers.

At the base layer sit issuers, the companies minting digital dollars and other fiat-pegged tokens. Historically, this category has been dominated by cryptocurrency-native players such as Tether and Circle. But the landscape is diversifying as FinTechs, banks and payments companies explore their own issuance strategies.

Above issuers are liquidity providers and market makers that ensure stablecoins maintain tight pegs and deep trading markets across exchanges and blockchains. These players, long essential to crypto trading, are increasingly critical for payment flows as well.

Custody and compliance providers form another layer. Firms like BitGo have spent years building institutional-grade custody for digital assets, and their expansion into stablecoin settlement infrastructure reflects growing demand from regulated financial institutions.

Then come wallets, payment gateways and card network integrations — the distribution channels that bring stablecoins into real-world financial applications. Partnerships like BitGo’s collaboration with SoFi, with Mastercard as a network partner, illustrate how traditional financial rails are now interfacing directly with blockchain-based money.

Finally, at the top of the stack are developer platforms and APIs. These tools allow fintechs and startups to integrate stablecoin payments into everything from payroll systems to supply-chain finance platforms.

The result is something that looks increasingly like a parallel financial system built around programmable dollars. For now, of course, the system is still emerging. Regulation remains uncertain, adoption uneven and technical standards still evolving.

See also: Stablecoins Face Tax-Time Reckoning as GENIUS Act Sets Compliance Bar

An on-Chain Financial Ecosystem Is Taking Shape

Payment giants are accelerating the shift toward embracing stablecoins as a new payment rail. Visa’s expansion of stablecoin-enabled cross-border payments through its partnership with Bridge is a sign that card networks see blockchain-based settlement not as competition, but as infrastructure.

In this model, the end user may never know stablecoins are involved. A transaction might start with a card payment and end with a merchant receiving stablecoins or local currency, with blockchain rails quietly handling the settlement in between. This hybrid model — traditional front-end interfaces with blockchain-based settlement — could become the dominant architecture for stablecoin adoption.

The partnership between BitGo and SoFi illustrates another emerging theme: vertical integration combining custody, issuance support, payment infrastructure, and consumer distribution. Mastercard’s involvement as a payment network layer suggests the stack could bridge both crypto-native applications and traditional financial products.

PayPal’s ongoing expansion of its stablecoin strategy adds another dimension: vertical use cases. Rather than focusing solely on consumer payments, PayPal has increasingly emphasized merchant settlement, logistics and supply-chain finance.

PayPal’s push suggests stablecoins may gain traction first in operational finance — behind-the-scenes payment flows — before becoming mainstream consumer money.

Regulators and central banks are watching closely. This week saw institutions including the Federal Reserve and the European Central Bank generally converging on a similar conclusion: stablecoins can offer meaningful efficiency improvements for payments but also raise questions around financial stability, monetary policy transmission and consumer protection.