Stablecoin Rails Gain Momentum as Fintech Industry Embraces Digital Assets

The adoption of stablecoin rails has been on the rise in recent months, with transactions valued at approximately $2Bn as of now, up from $200M just over a year and a half ago. This surge is largely driven by fintech apps that abstract the stablecoin element from end users, relying on Rain's technology.

Rain, which uses Fireblocks for its institutional-grade custody and security layer, has seen significant growth in the past 18 months, with major players in the fintech arena adding stablecoin-backed cards to their offerings. The company is a member of both Visa and Mastercard networks, allowing it to authorise and settle with card networks directly without or with limited bank dependencies.

This shift towards stablecoin rails has collapsed the stack that may have previously included 3-4 vendors, thanks to its programmability. As blockchain technology continues to advance, blockchains can now execute sub-second blocks at a cost of less than a penny. This has led to a change in the profile of stablecoin users, with clients including not only crypto natives but also payment fintechs and incumbent banks.

Stablecoins have become an essential tool for businesses, offering benefits such as internal treasury movement, new neobank products, or cost reduction. In the medium term, the volume of locked capital between businesses is expected to decrease, with businesses that incorporate stablecoin payments into their models set to benefit from this technology.