Payment fintechs push stablecoin tech for 2026

• Key insights: Payment technology firms such as Stripe, PayPal and Circle are developing payment use cases for stablecoins.  
• What's at stake: Stablecoins are still primarily used for investments. 
• Forward look: Banks are also planning to issue stablecoins, creating competition and opportunity for partnerships. 

2025 was a big legal year for stablecoins, with the passage of federal legislation and, more recently, the FDIC's pending rules for banks that plan to issue stablecoins. But laws don't equal usage. Stablecoins are still not widely employed for mainstream uses such as payments. To get there, new products will have to be built first.

"Although stablecoins have existed in some form since 2014, they are coming into their own as both major financial companies and governments start using them to solve real problems," Chris Jones, managing director at PSE Consulting, told American Banker.

Stablecoin circulation passed $300 billion in 2025, according to CoinMarketcap.com. That's still small in currency terms and most of it is tied to two fintech issuers, with Tether's USDT and Circle's USDC controlling more than 94% of the stablecoin market. Stablecoins have been mostly used for trading and as part of crypto investment strategies, though the regulatory changes have led fintechs toward using stablecoins for payments. 

"The first wave of stablecoin innovation and scaling will really happen in 2026," Chris McGee, global head of financial services consulting at AArete, told American Banker. "The largest focus next year will center around emerging use cases for payment and fiat-backed stablecoins as well as more investment opportunities in this space.

"For example, there will continue to be high growth in use cases focused on treasury optimization and currency conversion," McGee said. "Those will dominate as there is significant value and profitability improvement opportunities for firms that integrate stablecoins into their treasury and liquidity management functions, as well as banks that can offer clients more efficient currency hedging options."

Here are some of the financial technology firms that are developing payment uses for stablecoins. 

PayPal's stablecoin strategy scales up

 
In a December interview with American Banker, PayPal CEO Alex Chriss said he plans to expand PayPal's PYUSD stablecoin in the new year while scaling the payment company's digital wallet. A growing number of firms have partnered with PayPal to scale access for PYUSD, and PayPal and Venmo have long supported investments and trading cryptocurrency.

"We're seeing more people hold crypto than using it to make payments," PayPal's Chriss told American Banker. "That will take time to ramp up." There is traction for stablecoins for cross-border and B2B payments, he said. "We're making headway particularly in geographies that have inflationary pressures. Stablecoins pegged to U.S. dollars are valuable there," Chriss said. 

PSE's Jones said enterprise cross-border B2B payments are where stablecoins will finally break through into the mainstream. 

"For decades, cross-border payments have been slow and expensive, taking several days and costing up to 10 times more than domestic payments," Jones said. "This is particularly problematic for companies making a large number of cross-border transactions. Stablecoins can make these payments instant, and the technology is in place."

Fiserv looks for scale

Anticipating banks will respond to fintech stablecoins, Fiserv has developed a digital asset platform, including a stablecoin, FIUSD, that is part of Fiserv's banking and payments menu. Additionally, the bank technology company and PayPal plan to make their stablecoins, FIUSD and PYUSD, interoperable.

Both of these moves, announced Monday morning, would add drastic scale, opening stablecoins to thousands of financial institutions and PayPal's base of more than 430 million consumers and 36 million merchants. It also joins a fast-growing market of potential stablecoin issuers that includes a consortium of large banks, major retailers such as Amazon and Walmart, and early mover banks such as Societe Generale and Vantage Bank.

Stablecoins will play a greater role in settlement in the next year, said Monica Eaton, CEO of Chargebacks911, a payment dispute technology company, adding that function will be more important than an increase in market capitalization. "It will be the way stablecoins quietly replace legacy clearing infrastructure," Eaton told American Banker. 

Circle and Stripe push new payment tech

Following its IPO, The USDC issuer in 2025 launched the Circle Payments Network, which connects financial institutions, digital challenger banks, payment companies and digital wallets to process payments instantly in different currencies and markets.

Bloomberg Finance

Circle says it has more than 100 financial institutions in the pipeline. It also added other products, including Circle Gateway to enable USDC balances for cross-chain liquidity, and Arc, a blockchain designed for enterprise-grade stablecoin payments, foreign exchange and capital markets transactions.

In terms of building demand for stablecoin payments, merchants will adopt stablecoins because they reduce float, simplify cross-border transactions and deliver real-time finality, according to Eaton.

"With that speed, however, comes new forms of risk. Disputes will occur earlier in the transaction lifecycle, and fraud will adapt to target wallet-level vulnerabilities rather than card rails," Eaton said.

Stripe's Bridge stablecoin subsidiary won a bidding battle to issue USDH, a stablecoin on Hyperliquid's decentralized finance platform.

Stripe reportedly beat out Paxos, which issues PayPal's stablecoin; and other digital asset firms such as Abora and Ethena.

The emergence of Stripe and the other fintechs that are dominating stablecoins is a warning to banks, which weren't involved in the Hyperliquid sweepstakes.

Additionally, Stripe's core business involves enabling payments for small businesses, creating an opportunity for stablecoin payments.

Small to medium businesses will often either sell directly on marketplaces like Amazon, Etsy or eBay or through self-hosted marketplaces like Shopify, or both, Jones said.

"Payouts from these platforms are slow for merchants and expensive for the platforms themselves, which in turn drives prices up for merchants," he said. "Running these payments through a stablecoin platform would significantly speed them up, allowing merchants to get payouts whenever they need them, while reducing prices for the entire ecosystem."