Asia's Digital Banks Face Stablecoin Era Challenges

Stablecoins have grown significantly over the past decade, with on-chain transaction volumes reaching an estimated $33 trillion by the end of 2025. The majority of these transactions are linked to trading and other digital-asset activities, but stablecoins are also being used for payments and settlement.

Asia accounts for approximately 60% of payment volumes using stablecoins, driven in part by the continent's advanced domestic payments rails. However, cross-border payments in Asia remain fragmented, with many linkages between countries still dependent on participating banks, wallets, and platforms.

Digitally native banks are well-positioned to capitalize on this opportunity, as they can bring digital assets into trusted, mass-market user environments. To succeed, banks will need to focus on building infrastructure that can process and validate real-time transactions, connect with multiple payment and technology partners, manage foreign exchange, and reconcile funds quickly.

Regulatory regimes vary across Asia, but the passage of the GENIUS Act in July 2025 has established a regulatory framework for stablecoins in the United States. As banks look to explore new business models such as embedded finance, they will need to adopt an incremental approach to innovation that allows new capabilities to co-exist with existing foundations.