Digesting Stablecon: Execs bullish on imminent financial infrastructure revolution

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With Circle’s IPO in progress and the wrap of yesterday’s inaugural Stablecon event in NYC, it’s a great time to talk about stablecoins.

If you haven’t heard of them, the living-under-a-rock quip is probably warranted. I bet that’s a peaceful life, though, so in some ways I envy you.

But a misconception from those in the know?

“To say that stablecoins are simply a new form of payment or a new digital currency would be like saying that the internet is a better version of the fax machine,” said Spencer Spinnell, an Americas VP at Circle.

Sitting next to Spinnell was Catherine Gu, Visa’s head of institutional client solutions. She was blunt: “Whether you’re a bank or an asset manager or a financial institution of any sort, I think everyone needs a stablecoin strategy in 2025. That’s kind of imperative.”

You might recall Bank of America CEO Brian Moynihan’s comments in February about the company entering the stablecoin business upon more regulatory clarity. We then saw the WSJ report that several large commercial banks were considering issuing a joint stablecoin.

While the profits of stablecoin giant Tether (~$1 billion in Q1) are juicy to those considering an entrance, M0 CEO Luca Prosperi said TradFi players might want to focus on the distribution layer.

Mastercard’s Raj Dhamodharan said the key is solving for end-to-end utility while abstracting away the complexity of multiple stablecoins and networks. Moving in and out of fiat will be part of that (as seen in the payment giant’s partnership with MoonPay).

Not just a payment rail, industry watchers argue, stablecoins are rewiring backend financial infrastructure. They’re the foundational layer for tokenizing anything.

Financial firms leaning into stablecoins/tokenized RWAs — i.e. BlackRock, Franklin Templeton, etc. — see “a giant opportunity” for so-called shadow banks to displace the banks themselves, Sardine strategy head Simon Taylor told Blockworks co-founder Jason Yanowitz on the Stablecon stage.

Jonathan Steinberg, CEO of WisdomTree — a $120 billion asset manager that offers clients a platform to access tokenized funds and assets — called onchain money market funds, for example, “very competitive to a banking experience.”

“I expect we will see a better user experience taking money from the traditional banking system,” Steinberg noted. “For the large banks, how they deal with this new platform — blockchain — maybe is their single most important issue.”

While stablecoin market cap predictions in the trillions get thrown around (up from ~$235 billion today), Chainalysis CEO Jonathan Levin looks at the segment outlook differently.

“I think that stablecoins fail if [they replace] ACH and Fedwire,” he said. “Stablecoins succeed if new business models on the internet are unlocked [and] if new types of payments that otherwise couldn’t happen are unlocked.”

Finally, it appears we were first to report some news out of Stablecon:

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The neobank halted its US crypto services in 2023, citing regulatory uncertainty. And so it’s fitting the announcement came the same day the SEC offered clarity on whether certain protocol staking practices constitute securities offerings under US federal law.

The staking practices the SEC mention here don’t. The industry considers this statement a win.

There’ll be more to unpack there and other regulatory developments to come. Until then, enjoy the weekend.

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