Stablecoins have emerged as one of the most compelling success stories within the cryptocurrency landscape, and venture capitalists (VCs) are now viewing them as a significant long-term investment. The adoption of stablecoins is gaining momentum, with billions of dollars being transacted daily. Their versatility is becoming evident across various sectors, including payments, savings, and business applications, leading investors to regard stablecoins as a bridge connecting cryptocurrency to the broader real economy.

A pivotal moment that reignited VC interest in stablecoins occurred last October when Stripe completed its landmark $1.1 billion acquisition of Bridge, marking the largest merger and acquisition deal in the crypto space to date. This acquisition was seen by many as a watershed moment, signifying a major fintech player integrating stablecoin infrastructure on a large scale. Juan Lopez, a general partner at VanEck Ventures and former leader at Circle Ventures, highlighted Stripe’s impressive $1 trillion total payment volume as a prime illustration of the substantial growth potential in this sector. He suggested that should Stripe manage to transition that payment volume onto its proprietary stablecoin and develop a widely adopted, interoperable platform, it could unlock a remarkable $40 billion per year in net interest margins over the subsequent years, contingent on treasury yields maintaining an approximate 4%.

This kind of monetization potential is a key factor contributing to VCs viewing stablecoins as a trillion-dollar opportunity that extends beyond the confines of crypto and into the realm of global finance. Stefan Cohen, a partner at Bain Capital Crypto, pointed out that the annual settlement volume for stablecoins exceeds $10 trillion, emphasizing that we are still in the early stages of this burgeoning market.

Unlike previous cycles where stablecoin growth was closely linked to the broader cryptocurrency market, this current growth trajectory is happening independently and at scale. Data from The Block's Data Dashboard indicates that the total supply of stablecoins has surged from approximately $125 billion at the start of 2024 to nearly $230 billion today—an impressive 84% increase. Moreover, cross-border payments processed using stablecoin technology have skyrocketed to $50 billion per month, a dramatic rise from virtually nothing just fifteen months prior. This significant real-world application, particularly beyond the scope of trading, indicates that stablecoins are increasingly being recognized as vital components of the financial ecosystem rather than mere adjuncts to crypto.

Venture capitalists are not merely interested in traction but are also scrutinizing the underlying economics of stablecoin operations. Leading issuers, such as Tether, are reportedly generating billions in revenue through treasury yields while maintaining lean operational teams and minimal overhead costs. Cohen remarked, “Stablecoins are inherently a very profitable business,” leading to a surge in interest from startups, banks, and fintech companies all eager to develop their own stablecoin solutions. “There isn’t a single financial services or fintech company globally that doesn’t have a stablecoin strategy today,” added Hadick, emphasizing the pervasive interest in the sector.

The investment opportunity extends far beyond just stablecoin issuers. VCs are increasingly backing startups that are developing the necessary infrastructure to make stablecoins viable—this includes blockchains, digital wallets, payment platforms, and compliance tools. Many investors are backing app-first models where stablecoins serve as an enabling layer rather than the primary product. Cohen succinctly noted, “The most valuable stablecoin businesses will either be scalable permissionless infrastructure or centralized applications where stablecoins are seamlessly integrated into products people already utilize on a daily basis.”

However, the rapid scaling of stablecoins hinges on achieving regulatory clarity, which VCs perceive as both a potential catalyst for growth and a source of significant risk. A consensus exists that the establishment of a clear regulatory framework in the U.S. could drive widespread adoption from banks, fintechs, and enterprises alike. David Pakman, managing partner and head of venture investments at CoinFund, anticipated at least a fivefold increase in both stablecoin supply and transfer volume “in a short amount of time” once appropriate regulations are enacted.

Lopez from VanEck suggested that if a stablecoin regulatory bill were passed, we could witness stablecoins achieving cloud-level scalability within five years. He likened the potential growth to the swift rise of cloud computing, where companies had to adapt quickly or risk being left behind. Yet, others are carefully examining the nuances of regulatory proposals. Jed Breed, founder of Breed VC and former head of digital assets at Circle, cautioned that should regulations favor large institutions to the detriment of smaller players, it could stifle innovation and growth. “We need to ensure that it doesn’t become overly challenging for smaller entities to issue their own stablecoins,” he insisted.

Hadick pointed to early indications of this dynamic already manifesting, referencing legislation influenced by banking lobbies and the deployment of stablecoin integrations within closed systems. “The most significant risk remains regulatory action and the entrenchment of established players,” he stated, warning that much of the adoption from banks like JPMorgan has involved utilizing tokenization and stablecoins in a way that reinforces their position and limits broader market access, where true innovation is often taking place. The prevailing sentiment is that while regulation could facilitate the next wave of growth, if it skews in favor of incumbents, it may inhibit competition before it truly has a chance to flourish.

The strategic bet that crypto VCs are placing is not merely on the continued growth of stablecoins; rather, they are betting that stablecoins will evolve into the default mechanism for transferring value online. The foundational infrastructure is being established, regulatory frameworks are beginning to take shape, and genuine demand from the real world is already surfacing. While this transition may not occur instantaneously, the wheels of change are already in motion.

As Hadick aptly remarked, “Stablecoins may not be the optimal solution for every payment scenario, collateral movement, or savings strategy, but they are arguably superior and will continue to improve across countless applications, gradually penetrating that multi-trillion-dollar potential market.”

In 2024, stablecoins achieved remarkable milestones, processing an impressive $5.5 trillion in adjusted volume across over 1.2 billion transactions, as per Visa's on-chain dashboard. This upward momentum has shown no signs of waning: just in the initial months of 2025, adjusted volumes have already surpassed $2 trillion, with more than 300 million transactions recorded. If this growth trajectory remains consistent, 2025 could very well eclipse the previous year’s total, potentially reaching $6 trillion in volume by the end of the year. It’s important to note that these figures are derived from Visa's adjusted methodology, which filters out bot activities, exchange rebalancing, and high-frequency trading noise to accurately reflect real economic usage. The trend is unmistakable—stablecoins are not retracting from the market; rather, they are solidifying their position as a commonplace element in the financial landscape.

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Disclaimer: The Block is an independent media organization dedicated to delivering news, research, and data. As of November 2023, Foresight Ventures is a majority investor in The Block. Foresight Ventures also invests in several other companies involved in the crypto space, and crypto exchange Bitget serves as an anchor LP for Foresight Ventures. The Block continues to operate independently to provide objective and timely information regarding the crypto industry. For more details, please review our current financial disclosures.

© 2025 The Block. All Rights Reserved. This article is intended solely for informational purposes and is not offered or intended to serve as legal, tax, investment, financial, or other types of advice.