Stablecoins Took Over the Settlement Layer — Is Ethereum the Referee?
Why stablecoins stopped being pocket change and started running the rails
Stablecoins began life as a practical cheat code: a 24/7 dollar you could tuck into between trades so you didn’t have to fumble with banks. Fast forward a few cycles and they’re no longer a trading convenience — big investors and institutions are treating them like plumbing.
A major investment firm’s recent outlook argues that stablecoins are moving out of exchange backrooms and into mainstream payments, cross-border flows, and the corporate treasury. That’s a big deal because when large players start calling something “infrastructure,” banks, payment processors, and regulators sit up and take notice.
Part of the momentum is legal clarity. In mid-2025 a federal framework for payment-style stablecoins was signed into law, creating clearer rules for reserves and disclosures. The law doesn’t finish the job — rulemaking and phased rollouts will take place over the following years — but it changes how compliance teams and risk officers weigh on-chain options.
The market isn’t tiny anymore. Stablecoin supply swelled into the hundreds of billions of dollars, and a couple of names still dominate liquidity. That size plus a friendlier regulatory backdrop is why you suddenly see stablecoins in places you didn’t expect: back-office settlement, corporate treasuries, and pilot projects run by payment giants.
For example, a major card network announced a trial to accept a dollar stablecoin for settlement, with initial bank partners routing settlement over a high-throughput chain. The goal was simple: make settlement faster, open on weekends, and reduce friction from correspondent banking. In short, stablecoins are creeping into the normally invisible world of settlement — the part of finance everyone notices when it breaks.
Why Ethereum looks like the referee for big-money settlement
When stablecoins start doing heavy lifting — serving as collateral, backing tokenized cash products, or enabling large-scale netting — the underlying layer matters. Institutions aren’t choosing chains purely on speed or fees. They want predictable finality, deep liquidity, mature custody and tooling, and a security model they trust for decades.
That’s why many institutions keep gravitating toward Ethereum. It’s not always the cheapest lane for sending tokens, but it has become the place where settlement and security are treated like solemn duties rather than speed contests. The idea: do fast stuff on secondary layers, but let the base layer provide the final word if anything goes sideways.
Ethereum also hosts a large chunk of tokenized real-world assets — tokenized treasuries, money-market funds, and similar instruments — which makes it a natural spot for the “cash leg” of tokenized finance. Big names launched tokenized money-market products using Ethereum as the starting point, later expanding to other networks as distribution needs required. The pattern is predictable: start where liquidity and integrations exist, then branch out.
That said, Ethereum isn’t the only player. High-throughput chains and payment rails can be attractive for operational reasons, and stablecoin issuers increasingly make their tokens portable across many networks. Portability reduces single-chain dependence, but it also means the premium shifts toward layers that can convincingly act as settlement courts — simple, final, and extremely reliable.
There are risks and politics too. In emerging markets, wider stablecoin use could improve dollar access while also raising questions about local monetary control. And not all stablecoins are created equal: issuer transparency and reserve practices matter — and have been questioned by credit analysts in the past. A system that hinges on trusted filings and reliable reserves is only as strong as the people who run the vaults.
The practical takeaway: if stablecoins truly become the bridge between traditional finance and on-chain liquidity, institutions will demand a bedrock. In today’s market architecture, Ethereum looks like the bedrock most heavyweight players keep returning to — not because it’s perfect, but because it fits the security, liquidity, and governance checklist institutions need when real dollars are at stake.