Stablecoins Surge as Vital Infrastructure for Thriving Institutional Markets, Moody’s Reports

Global financial markets are witnessing a profound and accelerating transformation as stablecoins evolve from a niche cryptocurrency tool into the foundational digital cash infrastructure for major institutions, according to a landmark analysis by credit rating giant Moody’s. The agency’s “2026 Global Outlook” report, published this week, provides compelling data showing this seismic shift, with stablecoin payment volume surging 87% in 2025 to approximately $900 million based on on-chain transactions. This evolution marks a critical maturation point for digital assets, fundamentally altering how institutions manage liquidity, collateral, and settlement.

Stablecoins Forge New Path in Institutional Markets

Moody’s analysis identifies a clear trajectory for stablecoins. Consequently, these digital assets are no longer peripheral. Instead, they are becoming integral to core financial operations. The reported $900 million in on-chain payment volume for 2025 represents a dramatic year-over-year increase. This growth underscores a rapid adoption curve. Financial institutions are actively integrating this technology. They are leveraging its unique properties for efficiency and transparency.

Furthermore, the report highlights three primary institutional use cases driving this adoption:

• Liquidity Management: Institutions utilize stablecoins for near-instant, 24/7 transfers between entities and across borders, optimizing treasury operations.
• Collateral: Stablecoins serve as high-quality, programmable collateral in decentralized finance (DeFi) protocols and emerging tokenized credit markets.
• Settlement: They enable final settlement of tokenized assets—like bonds or equities—on blockchain networks, reducing counterparty risk and settlement times from days to minutes.

This functional shift is monumental. It signals a move beyond speculation toward utility.

The Engine of a Tokenizing Financial World

Moody’s directly links the rise of stablecoins to the broader trend of tokenization. The financial system is digitizing real-world assets (RWAs) onto blockchains at an unprecedented pace. Tokenized U.S. Treasuries, for instance, now represent a multi-billion dollar market. However, these digital assets require a native, digital medium of exchange for efficient trading and settlement. Stablecoins perfectly fulfill this role.

Analysts compare stablecoins to the plumbing of this new financial architecture. They are the essential settlement layer that allows value to flow seamlessly between tokenized assets. This infrastructure enables new market structures. For example, a tokenized bond issued in Europe can be instantly settled with a dollar-pegged stablecoin by an Asian asset manager, all without traditional correspondent banking delays. The efficiency gains are substantial. They compel institutional participation.

Evidence from the Front Lines of Finance

The Moody’s report is not an isolated opinion. It corroborates observable activity in capital markets. Major banks like JPMorgan and Citi are experimenting with blockchain-based settlement networks using their own tokenized deposits, a form of permissioned stablecoin. Meanwhile, asset managers such as BlackRock have launched tokenized money market funds on public blockchains, directly interacting with stablecoin ecosystems. This institutional experimentation is now transitioning to production-grade implementation.

Regulatory clarity in key jurisdictions has provided a crucial catalyst. The EU’s Markets in Crypto-Assets (MiCA) framework establishes clear rules for stablecoin issuers. Similarly, legislative proposals in the United States aim to provide a federal regulatory regime. This regulatory progress reduces uncertainty for risk-averse institutions. It allows them to allocate capital and technology resources toward integrating stablecoin-based solutions with greater confidence.

Quantifying the Shift: Data and Market Impact

The 87% growth figure cited by Moody’s is a powerful quantitative anchor. To understand its significance, consider the baseline. This growth is occurring from an already substantial volume, indicating scaling adoption rather than just initial experimentation. The $900 million represents on-chain transactions—a transparent and verifiable metric. It likely excludes significant off-chain or layer-2 network activity, suggesting the true economic volume is even larger.

Comparative Stablecoin Transaction Volume (2024-2025)

This data illustrates a qualitative change in user behavior. The driving force is no longer primarily speculative crypto trading. Instead, it is institutional workflow efficiency. This shift enhances the overall stability and utility of the stablecoin ecosystem. It attracts more conservative capital, creating a positive feedback loop for further growth and innovation in tokenized finance.

Conclusion

The Moody’s “2026 Global Outlook” delivers a definitive assessment: stablecoins are cementing their role as core infrastructure for institutional markets. Their evolution into digital cash for liquidity, collateral, and settlement is both a cause and effect of the accelerating tokenization of the global financial system. The 87% surge in payment volume to $900 million in 2025 provides hard evidence of this irreversible trend. As regulatory frameworks solidify and institutional use cases expand, stablecoins will likely become an even more critical component of modern finance, fundamentally reshaping how value is transferred and managed across the world’s markets.

FAQs

Q1: What exactly did Moody’s report say about stablecoins?
Moody’s stated in its “2026 Global Outlook” that stablecoins are transforming from a crypto-native tool into a core foundation for institutional markets, acting as digital cash for liquidity management, collateral, and settlement within an increasingly tokenized financial system.

Q2: How much did stablecoin payment volume grow in 2025 according to the report?
The report estimates stablecoins processed 87% more payment volume in 2025 than in 2024, reaching approximately $900 million in value based on tracked on-chain transactions.

Q3: What does “tokenization” of the financial system mean?
Tokenization refers to the process of creating a digital representation of a real-world asset (like a bond, stock, or fund share) on a blockchain. This allows the asset to be traded, settled, and managed with the speed and programmability of digital tokens, with stablecoins serving as the native settlement currency.

Q4: Why are institutions adopting stablecoins now?
Institutions are adopting stablecoins due to increasing regulatory clarity, the need for efficient settlement of tokenized assets, and the operational benefits of 24/7, near-instant global transfers for liquidity management and collateral purposes.

Q5: Does this mean stablecoins are replacing traditional cash for institutions?
Not replacing, but complementing. Stablecoins are becoming a specialized form of digital cash optimized for blockchain-based financial activities, particularly for settling tokenized assets and operating within decentralized financial protocols, while traditional fiat currencies remain dominant in the broader economy.