Stablecoins are one of the most promising yet disputable digital assets of the XXI century. Some praise their potential to revolutionize the inefficient legacy cross-border payment settlement, while others speak of stablecoin risks for national banking systems. Our today’s discussion will focus on the scalability of stablecoin economy and factors that hinder it. Here’s what horsepower, sandwiches and fragmented liquidity have to do about it.
Andreessen Horowitz’s crypto arm a16z calls “Stablecoin” term relic
Just a few days ago, a16z team argued that the term “stablecoins” which came up as an opposite to the volatility of other cryptocurrencies, e.g. Bitcoin, altcoins, is severely outdated.
Robert Hackett, a cohost of the Web3 with a16z podcast, compared it to the “horsepower” notion. Initially, people couldn’t understand the car engine’s potential better than using the number of horses analogy. Yet, as time and technology progressed, imagining what amount of work, say, ten horses could do, is much harder for a person than understanding the actual tech characteristics of a vehicle’s engine performance. This way, the term that stuck with us since 1800s is actually puzzling more than explanatory.
Andreessen Horowitz experts believe a similar process is currently happening to the term “stablecoin”. It was introduced as an opposite to the perceived volatility of Bitcoin and altcoins. However, the underlying blockchain technology and stablecoins’ programmable mechanisms have developed greatly since that time. Therefore, today, these digital assets represent much more than a token with a stable price.
Their utility is especially important for cross-border transactions, where stablecoins move monetary value and settle transactions across borders and systems instantly. They are used for embedded finance scenarios, serve as collateral for crypto trading and lending, leveraged for internal treasury operations and yield-earning.
Though the name itself now sounds like an understatement, stablecoins are unlikely to be rebranded at their peak of popularity. Hackett believes their programmable money technology will just become ubiquitous, to the extent that the name itself won’t matter much.
“As stablecoins scale into the many trillions, underpin global payment flows, and sit at the center of financial applications worldwide, the name will matter less and less. What will matter is that money, for the first time, behaves like the rest of the internet: fast, programmable, ubiquitous. And as that day arrives, “stablecoin” will sound less like a description and more like what it always was: a leftover metaphor… from the moment just before everything changed.”
Robert Hackett, Features Editor and Head of Special Projects for a16z crypto
Why Is Stablecoin’s Most Popular Payment Use Case Compared to a Sandwich?
The financial system has different use cases for digital assets. Be it retail payments, cross-border payments, treasury operations, or securities settlement, they all have different needs and require different assets for efficiency. Apart from already mentioned “volatile” cryptocurrencies, we have stablecoins, tokenized deposits, CBDCs, and tokenized money market funds. They each have their own structure, risk profile, and design. Each of those assets is also best-suited for a different purpose.
If we’re not speaking of stablecoin’s collateral utility, in payments, the idea of a “stablecoin sandwich” is fueling cross-border transactions. Here’s what it means. Both sender and receiver deal with fiat, but in the middle of those fiat layers, there’s a stablecoin filling, so to speak. Stablecoins serve as a middle layer for fiat-to-fiat cross-border payments, reducing fees, processing time, and other inefficiencies of traditional banking systems.
To enable that perfect scenario, having a blockchain network isn’t enough, of course. We need the whole infrastructure ecosystem, with non-custodial swap tools, direct fiat off-ramps, built-in KYC and AML compliance mechanisms, and much more. However, all that is still easier and cheaper to handle than intricate cross-border networks of multiple banking and fintech intermediaries.
Can we ultimately move from stablecoins being the middle layer for fiat to them being the only asset needed for cross-border transactions at all? That would make cross-border payments even less complicated, wouldn’t it? Well, both yes and no. For starters, most popular stablecoins are pegged to USD, and who wants even greater dollarization of their national economy today? Even if we put that rhetorical question aside and imagine there are two interacting entities in countries that do not mind extra dollar inflows, stablecoins are still far from that desired level of mainstream, where they can be used for any further retail payment or business transaction. Here we arrive at the next discussion point: why aren’t stablecoins massively used even though they are clearly highly efficient?
What Hinders Stablecoin Adoption
If you are in a certain fintech community bubble, it may seem that stablecoins are already everywhere. All major tech firms, banks and payment platforms today engage in a stablecoin initiative of some kind. And yet, the vast majority of modern stablecoin flows are still happening in crypto capital markets use cases, not real-world payments.
To better understand the actual share of stablecoin payments in the global payment landscape, McKinsey teamed up with Artemis Analytics. Together, the analytic firms discovered that the annual volume of actual stablecoin payments (not trading, internal crypto owners’ shuffling of funds, or automated blockchain activity) is about $390 billion, which is roughly 0.02% of global payment volumes. That’s right, not even a whole percentage point.
In a separate study, BCG conducted similar calculations, concluding that out of more than $62 trillion of stablecoin transfers annually, their real economic activity amounts to just $4.2 trillion, or about 7% of the total volume. The experts went further and extracted large categories of off-chain usage, including internal exchange settlements and stablecoin card-based payments from the total transaction volume. This research revealed that, in 2025, there were approximately $350-$550 billion of observable bilateral stablecoin payments for goods and services.
Although exact numbers may differ depending on the database and calculation methods, the overall picture is similar: stablecoins are far from being the backbone of mainstream transactions in 2026. One of the main reasons for that is an infrastructure problem. Every payment market is different. International and local payment rails are at different stages of crypto-readiness. Varying crypto regulation regimes create a fragmented global payment landscape, so stablecoins cannot be used freely in environments where their use is most notable – cross-border transactions. These missing puzzle pieces accumulate, creating a very patchy picture which prevents the stablecoin tech from moving at the pace it deserves.
What’s even more troubling is that regulation and infrastructure often move separately, without any coordination. Therefore, many markets are stuck at the intersection where the legal regime is very stablecoin-welcoming, but payment providers are not yet ready to handle them, or vice versa, infrastructure is top-notch crypto-friendly, but legislators are adopting a cautious approach, slowing the stablecoin progress down.
The real transformation might be visible only as the tech stack and legal premises’ openness to the stablecoin potential collide and start moving in the same direction. Hopefully, we’ll see that coordination level sooner than later, as agentic payments that also require stablecoin settlement for efficiency are already breathing down the industry’s neck.
