How Stripe's stablecoin techs boost its power to disrupt banks

• Key Insights: Stripe will issue Hyperliquid's stablecoin. 
• What's at Stake: The payment fintech is battling banks to capture the market. 
• Forward Look: Early Warning, other banks are planning stablecoins. 
  

Non-banks have gotten a headstart on banks in the race to issue stablecoins, with Stripe replicating its early successes in digital payments. 
Stripe's Bridge stablecoin subsidiary this week won a bidding battle to issue USDH, a new stablecoin on Hyperliquid's decentralized finance platform, which has reached a market cap of $16 billion in a year, or growth of 1,500% during that time. 

Stripe, which did not return a request for comment, reportedly beat out Paxos, which issues PayPal's stablecoin; and other digital asset firms such as Abora and Ethena, according to Bloomberg, which categorized the deal as a competitive threat to USDC issuer Circle. 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, have not been major players in the market and risk falling behind, according to payment experts.

"We have seen this kind of call to action before, where banks 'needed to get involved' in blockchain. But this feels different," Richard Rosenthal, principal in Deloitte's Risk & Financial Advisory practice, told American Banker, noting the quick growth of stablecoins and the vast future potential suggest banks need to make decisions on where they fit in the stablecoin market.

Same story

The apparent lack of banks in the Hyperliquid bidding resembles the early days of digital payments, where Stripe, Block, PayPal and other payment fintechs gained share from banks by offering cheaper processing, faster onboarding and quick decisioning for loans based on future payment flows. Stripe, which has its roots in selling digital payment tech to small businesses, has diversified its model, gaining a large valuation and global network of partners to compete with Block, PayPal and banks in signing merchant clients. 

Stripe in May issued dozens of new payment products, focusing on artificial intelligence and stablecoins. Stripe's AI engine accesses tens of billions of transactions, capturing signals about payments that traditional models miss. Stripe also launched Stablecoin Financial Accounts to businesses in 101 countries, following Stripe's early 2025 acquisition of stablecoin platform Bridge. The stablecoin accounts enable business owners in countries with volatile currencies to hedge against inflation while selling and buying from firms in countries with developed economies. This mix of digital payments, blockchain technology and stablecoin support position Stripe to sell into the stablecoin market, even with lots of competitors, according to payment experts.

Read more about Stripe. Stripe | American Banker

"There seems to be a glut of stablecoin providers, but most won't matter as the market will consolidate around those with distribution. That's where Stripe's efforts are important. It already sits in the flow of merchant and consumer payments," James Wester, director of cryptocurrency for Javelin Strategy & Research, told American Banker. 

Stripe's position gives its tokens real retail adoption potential, according to Wester. "It's less clear on the commercial or capital markets side, but it still demonstrates to banks the real competitive issue, which is  stablecoins moving from niche crypto plumbing into mainstream payments infrastructure."

Tipping the scales

While crypto companies and payment technology firms issue most stablecoins, the passage of the GENIUS Act has led numerous banks and other firms to consider issuing their own stablecoins, though there have not been a lot of formal launches from banks. Early Warning Services, the bank-led firm that operates the Zelle P2P network, is developing its own stablecoin, according to Yahoo Finance.Early Warning's stablecoin could provide a network for Early Warning's owners, including Bank of America, Capital One, JPMorganChase, PNC, Truist, U.S. Bank, and Wells Fargo. Early Warning did not return a request for comment.

Financial technology seller Fiserv is also developing its own stablecoin that will be available across Fiserv's  bank client network. 

Fiserv's FIUSD will be part of Fiserv's banking and payments menu by the end of 2025 and will be interoperable with PayPal's PYUSD. That could open stablecoins to thousands of financial institutions and PayPal's base of more than 430 million consumers and 36 million merchants.

The open question around stablecoin is who will reach the scale necessary to drive mass adoption, Tony DeSanctis, senior director at Cornerstone Advisors, told American Banker.  

"Tether, PayPal, and now Stripe are all trying to become the primary stablecoin rail to drive the market," DeSanctis said. "With the market cap for stablecoins increasing from $200 billion to $2 trillion in the next couple of years, new players have a chance to see significant growth. The question remains how many new players will be necessary in a market that already processes billions a day in transactions." 

The potential size of the stablecoin payment market and the pace at which fintechs are pursuing the market, will push banks to make quick decisions, according to Rosenthal. "It could be disruptive for banks because these non-banks could offer better terms or incentives."  

Banks will need to weigh the needs of their clients and their own strategy when pursuing custodial services, lending, payments or other stablecoin products, Rosenthal said, adding impetus to make these decisions soon. 

"You have a lot of fintechs and non-banks that have built market share," Rosenthal said. "The move to stablecoins is happening very quickly."