Payment Stablecoins: What You Need To Know 

Recent legislative momentum regarding payment stablecoins, most notably the passage of the Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025 (GENIUS Act), has sparked excitement and raised questions in financial circles. While the act offers some long-awaited regulatory clarity, it also opens the door to new questions around operational implementation, consumer adoption, and systemic implications.

Regardless of how financial institutions view the future of stablecoins, one thing is clear: Institutions need to bolster their stablecoin knowledge to start drafting thoughtful, useful plans. Our team is here to answer some frequently asked questions to help institutions begin the education and planning process.

Given their potential for global reach, quick settlement times, and relatively low costs for money movements, stablecoins provide an important opportunity for the evolution of financial services. In addition, the potential of programmability (for example, the use of smart contracts) might be revolutionary in the orchestration of broader financial services and allow for greater automation in payments and the potential layering of innovative ideas. That said, a balanced approach to stablecoin adoption is key to realizing opportunities and managing associated risks.

Amara’s Law, named after Roy Amara, states, “We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.” This principle is a helpful reminder and a useful lens when considering an institution’s individual approach to stablecoin adoption. It’s important to consider both the practical use cases today and the range of potential outcomes in the coming years.

What are some current use cases for stablecoins?

The most immediate and impactful use case for payment stablecoins is in cross-border payments. Traditional systems in this space can be costly, slow, and rely on complex correspondent networks. Stablecoins, in contrast, offer the ability for global reach, quick settlement times, and relatively low costs to move funds. That said, cross-border stablecoin payments might still struggle with first-mile and last-mile frictions, depending on jurisdictions and intermediaries.

How will stablecoins interact with the traditional financial system over the medium to long term?

Considering the newness of stablecoins, this is a difficult question to answer, which means institutions should consider a range of possible outcomes and plan accordingly.

Several factors could determine long-run outcomes, including:

• Consumer adoption. Platforms like Venmo showed that consumers will embrace less regulated financial alternatives if the user experience and incentives are strong enough. The stablecoin market could follow suit, with adoption hinging on convenience, trust, and the perceived value of holding and transacting in these assets. Over time, stablecoins could serve as an alternative payment rail or evolve into something much more disruptive to traditional finance.
• Financial market reactions. In this area, there are certainly more questions than answers. How will stablecoin ecosystems develop and mature revenue models? Will consumers and institutions prefer bank-issued tokenized deposits over nonbank stablecoins, or vice versa, and what incentives will play into that dynamic? How will new systems of minting, transacting, and burning compare to traditional clearing and settlement processes? What advancements might traditional payment rails make to further compete with emerging rails? What becomes possible when time-to-settlement is no longer a constraint when designing financial products and services? The answers to these questions are still to come and likely will influence everything from risk management to product design.
• Technology’s influence. Smart contracts and programmability could redefine the role of stablecoins by creating dynamic payment flows, automated compliance, and entirely new financial products and services. This potential is where the long-term vision matters most, as financial institutions must anticipate how long-term technological adoption will drive innovation alongside – or even beyond – what’s currently being contemplated.

How can financial institutions plan?

It might feel daunting to make plans when the landscape is still settling. Despite the ambiguity, financial institutions can and should begin planning for stablecoins now. Many banks are well versed in building and defending franchise value through the bundling of deposits, loans, and payment services. That expertise is highly relevant in this moment, as is asking key strategic questions, including:

• Will customers continue to trust our institution for core financial services?
• How can we leverage technological changes to enhance customer experiences and increase our franchise value?
• Are we actively engaging in innovation discussions at the state and federal levels?
• How have we prepared staff, senior management, and the board of directors for future strategic and innovation initiatives?

Though regulatory frameworks are still to be developed, stablecoin activity is accelerating, which means financial institutions must bolster capabilities in several core areas:

• Governance. Ensure key stablecoin-related risks are in line with the organization’s current risk profile, long-term strategy, and the board’s risk tolerance. Stablecoin activities also require a strong control environment and well-developed contingency plans.
• Bank Secrecy Act, anti-money laundering, and know your customer practices. Strengthen staff training, resource allocation, and monitoring systems to address the specific compliance challenges of stablecoins, including unhosted wallets and third-party partners, which will require deep subject-matter expertise and new technology investments.

• Technology and third-party risk management. Implement customized risk assessments and strong oversight processes. Protect application programming interfaces and data and include crypto asset-specific clauses in contracts to reduce compliance, operational, and legal risks tied to stablecoin integration.

• Cybersecurity. Adopt fraud detection tuned to stablecoin activity and enforce hardened security for digital asset-facing systems and connections to legacy systems. Build coordinated incident response protocols for cyberthreats involving digital asset platforms. 

• Liquidity risk management. Maintain strong monitoring and buffer strategies to handle stablecoin-related liquidity shifts, concentration risks, counterparty exposures, and real-time settlement demands during redemptions or stressed markets.

• Consumer compliance. Ensure clear disclosures on fiat availability, fees, and delays. Work with third-party crypto asset partners to coordinate complaint handling, reduce regulatory risk, and improve customer satisfaction.

As the speed of money accelerates, so, too, must the strength of our safety mechanisms. Think of it like driving a faster car: You’ll definitely need a better seatbelt, and you also might need a helmet.

While stablecoins and the regulations surrounding them are still in their infancy, now is the time for financial institutions to start planning for adoption. In many cases, it can be helpful to include an outside third-party with deep expertise in both the technology and the regulatory landscape, like Crowe, as a part of that planning.