Author: Prathik Desai, compiled by Block unicorn. Foreword: Everyone agrees that stablecoins are booming. Their circulating supply has more than doubled, and adjusted trading volume has more than tripled. All of this took only two years. Last month, the monthly adjusted trading volume of stablecoins hit a record high.
Some people dismiss these figures, while the crypto Twitter community (CT) cheers. But numbers alone don’t tell the whole story of growth. Equally important is the context in which growth occurs, such as who is using stablecoins, for what purposes, and whether usage patterns are changing.
Allium has generously given us an early look at their latest report on stablecoin infrastructure, “Stablecoins: The Rise of a New Payment Channel.” This report is worth reading because the charts show that the use of stablecoins is shifting from enabling low-cost cross-border remittances to supporting general commercial activities and inter-company supplier payments.
Most of the debate surrounding stablecoins today focuses on whether they are financial products or simply payment infrastructure. Policy-level discussions about the prospects of stablecoins are based on the premise that stablecoins are primarily a financial instrument. But the data in the report suggests otherwise. The composition of recent stablecoin transaction activity is increasingly like a payment channel rather than a savings product. This is the same pattern as the development of the Automated Clearing House (ACH) network: from replacing paper checks in payroll to becoming an infrastructure pillar for general commerce, B2B payments, and consumer bill payments.
Since January 2024, the circulating supply of stablecoins has increased by more than 100%. During the same period, adjusted trading volume increased by 317%. In the accumulation phase of any new asset, supply usually grows faster than usage. As the asset matures, usage grows faster than supply. Here, because the adjusted trading volume of stablecoins is growing much faster than the circulating supply, it indicates that stablecoins have evolved from a store of value asset to a more ideal medium of exchange or transfer of value.
This shift is also reflected in the velocity of stablecoins. Over the past two years, the transaction speed of stablecoins has increased from 2.6x to over 6x, meaning that the turnover rate per dollar of stablecoin is 2.3x higher than in January. If you compare this to traditional payment systems, you can see that the application of stablecoins is already very mature.
Another indicator of the maturity of stablecoin usage is the number of transactions. When the number of payment transactions grows faster than the growth rate of transaction volume, it indicates that the average payment amount is decreasing. This phenomenon usually indicates that the payment system is gradually operating stably, rather than an experimental tool being promoted between exchanges. This raises the question: who is paying all these payments, and what are they paying for?
By 2025, the consumer-to-consumer (C2C) channel will still be the largest channel, but its growth rate is the slowest among the four major channels. The slowdown in C2C transaction growth highlights the maturity of stablecoin applications, as peer-to-peer transfers are its simplest application scenario. As the infrastructure matures, commercial application cases begin to occupy a larger market share. The growth rates of C2B and B2B are 131% and 87% respectively, both exceeding the overall payment growth rate of 76%, indicating that the share of commercial payments in the total payment amount is expanding.
Combining the growing C2B transaction volume with the average unit price of C2B transactions (from $456.00 to $256.00) shows that people are using stablecoins to pay for regularly purchased items. Since falling below 50% in the first quarter of 2025, the percentage of C2C payments in total payments has never exceeded 50%. The world seems to be moving beyond the experimental stage of using stablecoins for low-risk, infrequent peer-to-peer transfers, and moving towards using them continuously for frequent payments.
Currently, about three-quarters of stablecoin payment transactions occur domestically. In the past year, the proportion of cross-border payment transaction volume has decreased from 44% to about 25-29%. At the regional level, 84% of payment transactions are still conducted within the same geographic region. It is clear that stablecoins are not competing with SWIFT for the international settlement market. Instead, B2B indicators, including 74% domestic market dominance, declining average transaction size, increasing payroll settlement application scenarios, and expanding invoice application scenarios, indicate that stablecoins are competing with domestic payment channels such as ACH.
For a long time, I thought that cross-border remittances and peer-to-peer transfers were the main drivers of stablecoin adoption. This story still exists, but it may no longer be mainstream. I find that the domestic commercial theory has quietly and rapidly surpassed everything else. The market share of the C2C category has not been able to regain 50% for more than a year, and it is this indicator that marks the transition of stablecoins from a crypto product to a financial infrastructure that supports commercial activities.
Looking ahead, I will be closely watching whether the C2B and B2B shares continue to grow, and whether the trend of shrinking average transaction amounts can continue in the coming quarters. If these two trends can be maintained even during a cryptocurrency market downturn, it indicates that stablecoin payment infrastructure has begun to continuously decouple from speculative cryptocurrency activities.
[Block unicorn]
Stablecoins: Beyond Crypto – The Evolution of Payment Infrastructure
The recent report from Allium presents a compelling narrative that stablecoins are undergoing a fundamental transformation from crypto-native assets to mainstream financial infrastructure. The data reveals a maturation process that experienced crypto investors should carefully analyze, as it represents a potential inflection point for the entire digital asset ecosystem.
The Numbers Tell a Story of Transformation
The metrics presented are nothing short of remarkable. Since January 2024, stablecoin circulating supply has increased by over 100%, while adjusted trading volume has surged by 317%. This disparity between supply and velocity growth is particularly significant. In asset evolution cycles, supply typically outpaces usage during accumulation phases, but the inverse pattern here indicates stablecoins have transitioned from being primarily held as value stores to actively serving as mediums of exchange.
The velocity increase from 2.6x to over 6x represents a 2.3x acceleration in transaction frequency per dollar of stablecoin. When compared to traditional payment systems, this level of velocity suggests stablecoin applications are already operating with considerable maturity. Such metrics challenge the notion that stablecoins remain mere experimental tools confined to crypto exchanges.
Perhaps most telling is the decline in average transaction sizes, evidenced by transaction volume growing slower than transaction counts. This pattern indicates stablecoins are increasingly facilitating routine, lower-value payments rather than large-value transfers—a classic characteristic of mature payment systems.
Shifting Usage Patterns: From C2C to Commercial Payments
The most significant revelation is the evolving composition of stablecoin usage. While Consumer-to-Consumer (C2C) transactions remain the largest segment, their growth rate has slowed dramatically, with their market share falling below 50% since Q1 2025 and failing to recover. This represents a critical threshold being crossed.
Concurrently, Consumer-to-Business (C2B) and Business-to-Business (B2B) transactions have grown at 131% and 87% respectively, exceeding the overall payment growth rate of 76%. The declining average C2B transaction value (from $456 to $256) further indicates stablecoins are being used for recurring commercial purchases rather than one-time transactions.
This transition mirrors the historical development of payment networks like the Automated Clearing House (ACH), which evolved from replacing paper checks in payroll to becoming infrastructure for general commerce. If stablecoins follow this trajectory, we are witnessing the early stages of a fundamental shift in how commercial transactions are processed.
Geographic Focus: Domestic Dominance
Contrary to conventional wisdom that emphasizes stablecoins’ cross-border potential, the data reveals approximately 75% of transactions occur domestically, with cross-border payment volume declining from 44% to 25-29%. Regional concentration is even more pronounced, with 84% of transactions occurring within the same geographic area.
This geographic distribution suggests stablecoins are primarily competing with domestic payment infrastructure like ACH rather than international settlement systems like SWIFT. The indicators supporting this conclusion—74% domestic market dominance, declining average transaction sizes, and expanding payroll and invoice applications—paint a clear picture: stablecoins are becoming alternatives to traditional domestic payment rails rather than just cross-border remittance solutions.
Implications for Crypto Market Participants
The evolution of stablecoins into payment infrastructure carries significant implications for crypto investors:
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Reduced Crypto Correlation: As stablecoins become more entrenched in mainstream commerce, they may increasingly decouple from crypto market volatility. This could make them more attractive to traditional financial institutions and enterprises currently wary of crypto’s price swings.
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Regulatory Realignment: The shift from “crypto asset” to “payment infrastructure” will trigger different regulatory frameworks. Investors should anticipate stricter oversight around reserve requirements, KYC/AML compliance, and systemic risk considerations.
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Competitive Landscape: We may witness a bifurcation in the stablecoin market between compliance-focused issuers targeting mainstream adoption (like USDC, USDP) and decentralized alternatives emphasizing censorship resistance (like DAI). Each will serve different market segments with varying value propositions.
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Protocol Value Accrual: Increased usage could drive revenue growth for stablecoin protocols through network effects, fee generation, and integrated financial services. Platforms that effectively bridge traditional finance and DeFi may capture disproportionate value.
Risks and Challenges
Despite the optimistic narrative, significant risks remain:
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Regulatory Headwinds: As stablecoins encroach on traditional payment infrastructure, expect heightened regulatory scrutiny. Potential restrictions on reserve composition, operational requirements, and use cases could limit growth.
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Systemic Implications: The increasing real-world value flowing through stablecoins raises the stakes for depegging events. Reserve transparency and audit quality will come under greater scrutiny, with potential regulatory consequences for failures.
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Traditional Payment System Competition: Established payment networks and financial institutions may respond with competitive barriers, regulatory lobbying, or enhanced offerings to protect their market positions.
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Concentration Risks: Market consolidation around a few dominant stablecoin issuers could create centralization risks, potentially undermining the decentralized ethos that initially drove stablecoin innovation.
Investment Opportunities
The evolution of stablecoins into payment infrastructure creates several strategic opportunities:
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Cross-Chain Solutions: As multiple stablecoin ecosystems emerge, demand for interoperability solutions connecting different networks will increase. Protocols facilitating seamless asset transfers between stablecoins could capture significant value.
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DeFi Onboarding: Stablecoins positioned as compliant on/off ramps between traditional finance and DeFi may experience accelerated adoption. This could drive liquidity to DeFi protocols and create new yield-bearing stablecoin products.
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Enterprise-Grade Services: Growing B2B usage will drive demand for specialized payment solutions, treasury management tools, and compliance infrastructure tailored to business needs.
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Emerging Market Applications: Despite the domestic focus highlighted in the report, stablecoins still offer compelling advantages in regions with unstable currencies or limited banking infrastructure. Solutions addressing these pain points could experience exponential growth.
Conclusion: A Paradigm Shift in Progress
The data presented in the Allium report signals a fundamental paradigm shift in stablecoin utility. We are witnessing the transition from a crypto-native phenomenon to financial infrastructure that supports broad commercial activity. This evolution represents both a maturation of the digital asset ecosystem and a potential bridge to mainstream adoption.
For experienced crypto investors, this analysis suggests several strategic considerations: reassessing stablecoin narratives beyond cross-border remittances, monitoring velocity and transaction metrics as indicators of mainstream adoption, and positioning portfolios to capture value from both the infrastructure providers and applications built atop this emerging payment layer.
The stablecoin market has clearly moved beyond the experimental phase. The question for investors is no longer whether stablecoins will become significant in payments, but which protocols, use cases, and geographies will lead this transformation—and how traditional financial infrastructure will respond to this encroachment on their core business.