Until recently Stablecoins was a bit of an unfortunate product. Their primary use case was to give Cryptocurrency retailers a secure haven that they could easily move in when they left a trade position and out of when they were ready to re-enter the market. In addition, the cases in reality were few and far in between. Some traders liked to maintain significant Stablecoin positions because they could earn interest by making them, but in the United States quickly became illegal in many states, which caused this use case to shrink.
But in 2025 things began to change. Stablecoins exploded in popularityNot only in cryptocets, but also over traditional funding. Practically overnight, it felt like all major companies announced a Stablecoin launch or StableCoin support.
The profit and policy shift that runs StableCoin -Boom
The newfound interest in Stablecoins can be boiled down to profit and regulations.
Starting a Stablecoin is relatively easy (if you have decamillions or more). When a company launches one, exchanges, WalletsAnd other partners must buy it for operational reasons and give the issuer immediate customers and demand. From there, the issuer shaves cash from keeping customer deposits in safe, return -generating assets such as US government debt. As long as Stablecoin is full support 1: 1 with real dollars or short -term state funds, it is a low risk, high profit -making business model. On the part of the issuer, the fact that Stablecoins are reliable money manufacturers are sufficient incentives for all big names to launch one.
On the regulatory side, strict politics around the banking and financial industry made it almost impossible for traditional players to engage in blockchain technology—The incoming Stablecoins – in some meaningful way. But now, under one New administration There are actively liberal parts of the banking and payment sectors, the obstacles that once prevented cross-pollination of blockchain and the traditional financial system begin to disappear and even more expected obstacles are being dismantled over the next four years.
A turning point for crypto and traditional financing
These two elements, in particular the regulatory displacement, enabled blockchain products and services to integrate into the traditional financial system. Circle Saw this shift was happening-and to be fair, they probably favored by their relationship with the White House and US President Donald Trump and moved quickly and took a attitude to Stablecoins that differs from the case of Safe Safe Haven. Instead, the company began to make an effort to use blockchain infrastructure for power Global payments for banks and institutions.
Circle first broke this news when they recently announced The launch of Circle Payments Network (CPN)A global payment system that runs on blockchain rails and determines payments with Stablecoins. From the look, Circle designed this product to disturb the older payment networks that have historically been the backbone of domestic and international financing.
How Circle Payments Network works
Operational is the circle payment network similar to a blockchain transaction You may already be familiar with, but it has been tailored specifically for financial institutions.
To start a transaction, a customer tells his bank or payment provider (called a “original financial institution” or OFI) that they wish to send money to someone abroad. Ofi converts the customer’s dollar to USDC Stablecoin. Then CPN – which acts as a marketplace or coordinates the protocol – of a partner bank or payment company in the recipient’s country (a “recipient financial institution” or BFI). USDC is sent over a blockchain network to BFI almost immediately. Once BFI has been received, either the USDC converts to the local currency and deposits it into the recipient’s account or allows the recipient to keep it as digital dollars.
Compare that with the sitting model in traditional financing, where a sender goes to his bank, requests an international wire transfer and then jumps the money through one to three intermediate banks before reaching the recipient’s bank. Each intermediary charges a fee and performs compliance checks and introduces additional time delays. If the transfer crosses time zones, occurs during the weekend or involves currency conversions, it may take 2-5 days to complete.
The benefits of stablecoins in the banking system
In his Whitepaper, Circle highlights four core benefits with CPN compared to traditional global payment systems: lower costs, faster settlement times, greater transparency and the ability to continuously renew themselves. However, the two most convincing benefits are lower costs and faster settlements, which are the two factors that will probably get banks and institutions to join CPN.
According to McKinsey’s global payment report in 2024, the average cost of sending $ 200 were internationally 6.65%. Currency conversion fees, liquidity issues and compliance controls add this burden.
However, Circle’s payment network claims to significantly reduce these costs. Although there are still any fees such as payout fees to BFI, FX spreads and a CPN network fee, the total cost is expected to be a lot lower than sitting methods.
In addition, what is currently taking 2-5 days to go through the sitting system can happen almost immediately through CPN. As you can imagine, cost savings and reduced settlement times can only be sufficient to stimulate banks, as it benefits both banks themselves – slower costs – and their customers who will get their money faster.
Can Circle’s Payments Network be Blockchain’s killer -app?
Circle Payment Network’s development can be one of the most important milestones for blockchain and digital asset industry. For over a decade there were blockchain technology, but its Real impact In addition to trade and speculation, was limited. Despite all the promises of disruptions and innovation, blockchain and digital currency were never really nuclear power of infrastructure and technology that its advocates preached that it would be.
However, CPN could change it. It could potentially be what i would call blockchain’s other murderer app—It who assumes that trade and speculation are murderers -app # 1 – by embedding in plumbing in the global financial system and becoming a viable alternative to giants that FAST And Ach.
Of course, the success of the Circle Payments network is on adoption. If only a handful of institutions use it, its impact will be minimal. But if a critical mass of large players, the world’s largest volume transactors, begins to use CPN, the resulting cost savings, efficiency gains and speed improvements can be significant.
If Circle payment networks succeed, it will do a lot to help blockchain and digital asset industry mature. So far, blockchain and digital assets have undoubtedly been a bit of a joke for older players and businesses in the financial industry. From their point of view, although they would recognize the potential, blockchain and digital assets have historically not had much usefulness and have often added unnecessary friction warehouse to a process that often made it more complicated than just using fiat currency for a transaction. But by giving the institutions a legitimate value proposal that would at least get them to try CPN, Circle can end up making blockchain technology a permanent fixture in the global financial system.
Watch: Blockchain is much more than digital assets
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