The quiet revolution: how stablecoins are rewiring the plumbing of global finance

The question is no longer whether stablecoins will reshape finance, but under what conditions - and who will define them. Dr. Michael Blaschke, Principal and IT Architect at SAP’s Digital Currency Hub, explores this topic to reveal how stablecoins are rewiring the plumbing of global finance.

For most of the past decade, the conversation about digital money has oscillated between two extremes: the speculative frenzy of cryptocurrencies and the cautious experimentation of central banks. Somewhere between these poles, a quieter revolution has been taking place. Stablecoins - privately issued, blockchain-based tokens pegged to fiat currencies - have grown from a niche instrument used by crypto traders into a systemic component of the global financial architecture. With a market capitalisation exceeding USD 300 billion, adjusted transaction volumes in the trillions, and measurable influence on US Treasury yields, stablecoins are no longer a curiosity. They are infrastructure.

A new study I authored for the FERI Cognitive Finance Institute, Stablecoins: How Tokenized Money is Changing the Global Financial Architecture, offers a sober, deeply researched account of this transformation. The findings deserve attention not only from regulators and central bankers, but from every executive whose business depends on how money moves.

Why tokenized assets need tokenized money

The promise of tokenization - representing bonds, fund shares, real estate, or trade receivables as programmable digital tokens - has captured the imagination of the financial industry for years. Yet the promise has remained partially unfulfilled, and the reason is structural. A tokenized bond traded against a conventional bank transfer creates what the Bank for International Settlements calls a system break: one leg of the transaction settles in seconds on a blockchain that operates 24/7, while the other leg crawls through correspondent banking networks bound by cut-off times and multi-day settlement cycles.

Stablecoins close this gap. They provide the monetary counterpart that tokenized assets have been missing - a payment instrument that lives on the same rails as the asset itself. This enables what specialists call atomic settlement: the simultaneous, indivisible exchange of asset and payment in a single transaction. Without tokenized money, the efficiency gains of tokenized markets remain theoretical. With it, an entirely new architecture becomes possible.

This is not an abstract proposition. BlackRock’s tokenized money market fund BUIDL settles subscriptions and redemptions in USDC. Major banks are building deposit token frameworks. The two pillars of the token economy - tokenized assets and tokenized money - are converging in real time.

From financial product to systemic infrastructure

What makes stablecoins particularly significant is the speed of their institutional ascent. Only a few years ago, they were viewed primarily as a bridging instrument for crypto traders. Today, they are the subject of strategic deliberation at central banks, regulators, global banks, and technology giants alike.

The numbers tell the story. In 2024 alone, stablecoin issuers purchased approximately USD 40 billion in short-term US Treasury bills - a volume comparable to the largest US money market funds. Adjusted cumulative transaction volumes on public blockchains have reached USD 1.8 trillion across nearly 200 million genuine transactions, even after filtering out bot activity and algorithmic high-frequency trading. If the stablecoin industry were a sovereign state, it would rank among the twenty largest holders of US government debt.

Institutional adoption is accelerating in parallel. JPMorgan’s Kinexys platform processes interbank settlements with bank-issued tokens. The European consortium Qivalis - backed by BNP Paribas, ING, DekaBank, Danske Bank, and UniCredit -plans to launch a MiCAR-regulated euro e-money token in Q3 2026. In February 2026, AllUnity, a joint venture of DWS, Flow Traders, and Galaxy, launched a Swiss franc stablecoin on Ethereum. Stablecoins are no longer being issued only by crypto startups; they are being built into the core of the institutional financial architecture.

Dollar dominance, rewritten in code

Perhaps the most consequential - and least discussed - dimension of the stablecoin phenomenon is geopolitical. Approximately 97 percent of all stablecoins are denominated in US dollars, a share that vastly exceeds the dollar’s roughly 58 percent of global currency reserves or 44 percent of foreign exchange turnover. Stablecoin issuers, in turn, hold most of their reserves in short-dated US Treasuries, creating a structural new demand channel for American sovereign debt that operates outside the traditional banking system.

The Trump administration has recognised this dynamic and acted on it. The Guiding and Establishing National Innovation for US Stablecoins Act, known as the GENIUS Act, passed by Congress in 2025, establishes a federal licensing framework for stablecoin issuers and positions dollar-denominated stablecoins as a strategic instrument for preserving the dollar’s role as the world’s reserve currency in the digital age. Three mechanisms reinforce one another: a Treasury demand pull, a payments-standard effect that entrenches dollar-based protocols globally, and powerful network effects that make displacement increasingly difficult.

Europe has responded with the Markets in Crypto-Assets Regulation (MiCAR), the world’s first comprehensive regulatory framework for crypto assets. MiCAR establishes clear rules on reserves, redemption rights, and governance, and provides a credible foundation for euro-denominated alternatives. But regulation alone does not generate liquidity, and Europe faces a structural time disadvantage in the race for network effects. The strategic question is no longer whether stablecoins will reshape international payments, but whose stablecoins will define the new standard.

Stability as a matter of confidence

The word ‘stable’ in stablecoin invites a particular kind of misreading. A peg to the dollar is not a law of nature; it is a market and institutional achievement that depends on three things: the quality of the reserves, the credibility of the issuer, and the functioning of arbitrage mechanisms in the secondary market.

Recent history offers vivid lessons. In May 2022, the algorithmic stablecoin TerraUSD collapsed in seventy-two hours, erasing more than USD 30 billion in market capitalisation and demonstrating that stability claims unsupported by genuine reserves are illusions. In March 2023, USDC - widely considered one of the most transparent and well-managed stablecoins - temporarily lost roughly 12 percent of its peg when its issuer disclosed exposure to the failing Silicon Valley Bank. Even high-quality stablecoins remain vulnerable to confidence shocks transmitted through their reserve infrastructure.

The Bank for International Settlements has documented that stablecoin inflows already affect yields on three-month US Treasury bills by 2.5 to 3.5 basis points, and by 5 to 8 basis points during periods of constrained supply. This means stablecoins are no longer isolated from the broader financial system; they are part of the monetary transmission mechanism. Reserve quality, segregation, auditability, and redemption rights are no longer technical details. They are first-order questions of financial stability.

When machines start using money

A final dimension of the stablecoin story is only beginning to come into focus, yet it may prove the most transformative. Analysis from Visa’s Onchain Analytics Dashboard suggests that roughly 79 percent of gross stablecoin transaction volume is generated not by human users but by automated systems - bots, high-frequency trading algorithms, and smart contracts executing internal operations. As agentic AI - software capable of pursuing goals, making decisions, and executing transactions autonomously - matures, this share will only grow.
The convergence is logical. Fully digital, machine-to-machine transactions require money that is programmable, available around the clock, and natively settled on shared infrastructure. Stablecoins meet all three criteria. AI agents can optimise treasury positions across multiple tokens and instruments in real time, trigger payments against verifiable supply-chain events, and monitor peg stability with a speed no human treasurer could match.

The opportunities are real, but so are the risks. Synchronised algorithmic behaviour can amplify market stress, accelerate runs, and create procyclical feedback loops. Governance frameworks for autonomous systems - limit structures, kill switches, audit trails, and clear lines of accountability - are no longer the concern of IT departments alone. They are board-level imperatives.
A threshold moment

The FERI study makes clear that the question is no longer whether stablecoins will reshape finance, but under what conditions - and who will define those conditions. The next two to three years will be decisive. Regulatory frameworks are crystallising, institutional players are positioning themselves, and the convergence with agentic AI is poised to accelerate adoption dramatically.

For executives, investors, and policymakers, the first step is not a decision for or against stablecoins. It is a structured understanding of what they are, what they enable, and what they require.
Readers interested in a comprehensive analysis are encouraged to explore the full FERI Cognitive Finance Institute study, Stablecoins: How Tokenized Money is Changing the Global Financial Architecture, available here. In a solo episode of Bitcoin, Fiat & Rock'n'Roll, the author unpacks his new FERI study to explain why stablecoins have become the missing monetary infrastructure of the token economy - and why banks, regulators, and corporates can no longer afford to treat them as a crypto niche: Listen here.

This article is brought to you in partnership with Point Zero Forum and The Paypers. Point Zero Forum is the annual gathering of global central bankers, regulators, policymakers, and industry leaders shaping the future of financial services - and The Paypers is proud to spotlight the voices driving that conversation.

About author

 

Dr. Michael Blaschke is a Principal and IT Architect at SAP’s Digital Currency Hub as well as SAP’s Enterprise Architecture Excellence practice, focusing on banking, IT architecture, institutional DLT, and digital currency infrastructure. Previously a top-management consultant at A.T. Kearney’s Digital and Analytics practice, he holds a Ph.D. in Information Systems from the University of St.Gallen and the London School of Economics. He co-hosts the podcast Bitcoin, Fiat & Rock’n’Roll and publishes regularly on digital money, tokenization, and the future of financial infrastructure.

 

 

About SAP Digital Currency Hub

 

SAP Digital Currency Hub enables enterprises to integrate stablecoins directly into their ERP-driven payment processes. Operating 24/7 with near-instant cross-border settlement, the Hub supports USDC, PYUSD, and EURAU on Ethereum and Polygon. It connects SAP ERP systems through SAP Multi-Bank Connectivity with licensed crypto-asset service providers, enabling seamless on- and off-ramping, automated reconciliation, and significantly reduced transaction costs - bringing tokenized money into the heart of corporate treasury operations.