Stablecoins have emerged as a pivotal component in the digital payment landscape, with their adoption rates surpassing those of major traditional card networks in terms of onchain volume. Noam Hurwitz, head of engineering at Alchemy, highlighted the rapid growth and integration of stablecoins into the internet’s financial infrastructure. According to Hurwitz, stablecoins are increasingly becoming the default settlement layer for online transactions, offering faster, cheaper, and more secure payment options.

Companies such as PayPal and Stripe are incorporating stablecoins to leverage onchain infrastructure, which facilitates more efficient transactions. Hurwitz noted that stablecoins have already surpassed Visa and Mastercard in onchain volume by 7%, indicating a significant shift in how money is transferred online. Alchemy, a key player in this transformation, provides infrastructure to some of the largest stablecoin ecosystems and supports stablecoin flows for major fintech companies like Visa, Stripe, Circle, and PayPal.

Stablecoins are utilized for a variety of purposes, including cross-border payments and prediction markets like Polymarket. Their ability to make money transfers cheap, fast, global, and secure has driven their broad adoption. Additionally, stablecoins have become significant buyers of US Treasurys, with Tether (USDT) alone generating $13 billion in profits last year while holding around $113 billion in US debt. Hurwitz described tokenized money as the foundation of the tokenized financial system, emphasizing the exciting potential of recent financial innovations built on this base.

Despite their growing popularity, stablecoins face challenges due to the fragmented blockchain landscape. Institutions seeking to move quickly must assess provider reliability and counterparty risks, especially in an emerging industry. Hurwitz highlighted the launch of Kinexys, a tokenized bank deposit by JP Morgan, as a major milestone. This permissioned deposit token allows institutional clients to access yield-bearing deposits on a public blockchain with 24/7 settlement, near real-time liquidity, and the potential to pay interest to holders.

The regulatory environment for stablecoins is becoming clearer with the recent passage of the GENIUS Act, which establishes federal guardrails for stablecoins. Hurwitz noted that this structured regulatory landscape benefits established financial players while encouraging innovation. However, technical bottlenecks remain in improving the developer and end-user experience, despite strong growth. Companies benefit from settling on crypto rails but seek to decouple the user experience from the underlying technology, which requires deep technical expertise.

Looking ahead, Hurwitz expects most financial services to deploy their own blockchains, particularly layer 2 networks, to better scale and monetize their ecosystems. He predicted that infrastructure improvements would drive seamless crosschain interoperability, enabling a more connected and efficient financial system built on stablecoins. Despite Hurwitz’s optimistic view, a recent report from the Bank for International Settlements challenges the notion that stablecoins can serve as money in a modern financial system, describing them as digital bearer instruments that resemble financial assets more than actual money.

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