Post-Genius Act Payment Stablecoin Developments and Fintech Challenges

Written by Zuo Ye

Since the passage of the Genius Act bill in July 2025, yield-bearing stablecoins have faced complete rejection by the banking sector, while payment stablecoins have gained widespread adoption.

Old payment methods are becoming a new hotspot, with agents and stablecoins representing the complex relationship between FinTech and Crypto.

Returns are the past, payments are the present, and AI is the future—a dangerous and easily outdated categorization, but one that provides a convenient historical framework for understanding.

Meta is re-embracing stablecoins, Google has partnered with over 60 companies to form the AP2 alliance, and Stripe views stablecoins and agents as the future—yet PayPal, which already launched $PYUSD, and Coinbase, which proposed the x402 protocol, have both seen their stock prices decline.

We urgently need to address two issues: first, what is driving the new conflict in payments, and who is fueling market sentiment; second, whether agents and stablecoins are truly the next ticket to the future.

This article focuses on the former; the relationship between AI, blockchain, and stablecoins will be addressed later, and the outlook for yield-bearing stablecoins will follow the clarity bill.

Crypto has potential; individuals have no future.

U.S. stocks and Treasuries are increasingly being tokenized; BlackRock and WisdomTree are repeatedly embracing DeFi. Tokenomics is inevitably approaching its end, as no one still believes in blockchain’s wealth-creation effect. Even if public blockchains and Vaults achieve real-world adoption, it does not mean the prices of $ETH and $Aave will rise.

This perspective isn't wrong, but it exaggerates the challenges facing Crypto, as FinTech has already reached a critical juncture.

Yes, this counterintuitive assessment can be made after Stripe's valuation surpassed $159 billion.

Considering the flow of Peter Thiel’s capital, liquidating Wise stock, holding onto NeoBroker projects like Trade Republic, or viewing the financial backing of Revolut—the most valuable NeoBank in Europe at $75B—reveals that fintech valuation logic has changed.

After more than 20 years of effort, the attempt to build payment channels independent of banks has failed; only those that can retain or convert user funds hold real value—Wise’s transfers and Stripe’s payments have no true future.

Caption: Value changes in Fintech & Payment, source: @zuoyeweb3

One reason is that they cannot fully bypass banks for fund processing; another reason is that blockchain can do it more cheaply.

This is not simply an issue with one company; the entire FinTech sector reached its peak during the pandemic. PayPal, which is now rumored to be for sale, was valued at $340 billion in 2021, and by 2026, the entire FinTech sector will need to prove its superiority in stablecoins and agents.

Stripe’s valuation is five times Adyen’s market cap ($35B) and about thirteen times Checkout.com’s valuation ($12B), yet Stripe’s transaction volume is not five times that of Adyen—the leverage comes from market imagination around stablecoins and the agent concept.

Fintech companies face far greater anxiety than crypto, since "public chain + stablecoin" forms a self-contained system, and DeFi is a killer application; what we're seeing today as a new battle in payments is merely Fintech inflating valuations to stoke the fire.

Fintech has only existing advantages; the future belongs to the crypto industry.

Caption: Forbes Fintech 50 list, data source: @ForbesCrypto

According to Forbes data, payment companies in the FinTech sector take an average of 8.1 years to make the list, whereas crypto companies achieve this in just 6.2 years.

Or, from a direct business perspective, long-term players like Stripe need to justify their position to capital markets—or provide an exit rationale—since tied-up capital requires allocation toward more promising or larger future opportunities.

• Larger: Agents will exponentially increase the number of payments; Stripe founders the Collison brothers believe a blockchain with billion-level TPS is needed;
• Update: Leveraging stablecoins to completely transform the existing payment technology stack is the biggest technological milestone since the API-first approach.

But to achieve this bright future, fintech must not only prove itself superior to crypto companies, but also face opposition from banks and internet superplatforms—many participants are involved, and Ping'an County has descended into complete chaos.

Compared to unicorns like Stripe, super-platforms such as Meta and Google are far larger, with market valuations in the trillions and billions of users—figures that are commonplace for them. As intermediaries seeking a share of revenue, you could say they see an opportunity to launch their own stablecoins or payment protocols, or simply leverage their existing advantages to charge a higher toll.

Under the benevolent leadership of Vitalik, Crypto has willingly surrendered its independent hardware layer to the internet, becoming a tenant of AWS—but at least, blockchain technology as a new infrastructure for money flow has gained consensus among banking, internet, fintech, and regulatory institutions.

Areas requiring further consensus include whether to completely replace banks, and how stablecoin payments can encroach on B2C business from the C2C/B2B divide.

USDT fades into obscurity as it penetrates the Third World and encircles the West, while USDC gains momentum on-chain; compliance is merely a facade replacing banks.

Blockchain can not only bypass the banking-dominated financial system and achieve a theoretical minimum of independent existence through underground economies, but over the past decade of Ethereum's development, it has demonstrated overwhelming superiority over TradFi in capital efficiency.

Most interestingly, this dominance isn’t about capital size—$ETH at $236 billion, stablecoins at $300 billion, and $BTC at $1.32 trillion combined still fall short of JPMorgan’s single $2.5 trillion in deposits.

The advantage lies in the banking sector's ability to lock down the ongoing attempts by FinTech and PSPs (Payment Service Providers, or third-party payment platforms), because it's impossible to handle electronic U.S. dollar flows independently without going through banks—yet blockchain can do it, even as the most challenging stablecoin companies find openings in the banking system, from Silicon Valley Bank to Lead Bank.

Capitalists can sell their own nooses; the banking industry's traitors cannot be absorbed by themselves; Wall Street holds no regulatory power.

Yet the regulatory priorities are highly contradictory: on one hand, the too-big-to-fail banking sector has been unpopular since the 2008 financial crisis, but on the other hand, the crypto industry may be even more unruly than Wall Street in terms of financial order.

Surrounding three sides while leaving one open, an ancient political strategy, has been skillfully employed by various bureaucratic systems.

Since the passage of the Genius Act, regulatory actions by the Fed, OCC, CFTC, and SEC have opened the door wide for payment stablecoins, at the cost of eroding the foundational premise of yield-bearing stablecoins—to address the banking sector’s “deposit drain” crisis and to guide stablecoins into the existing financial framework.

Image caption: Regulatory implementation progress, source: @zuoyeweb3

Since Merrill Lynch invented the MMF (money market fund) via the CMA (cash management account) in the 1970s, banks have accused it of causing deposit outflows from small and community banks, but the damage was done—MMFs supported by CMA offer not only flexible access but also higher interest rates than bank deposits.

Ultimately, deposit outflows were halted only after the banking industry was gradually allowed to engage in mixed operations and offer products similar to MMFs—but with a touch of dark irony, it was large banks that leveraged their scale advantages to capture deposits from smaller banks.

Heresy is more terrifying than paganism.

Stablecoin yields are not even a real issue—banks want to issue yields themselves to avoid being rendered obsolete by historical progress. Another example: in 2013, when Alipay and WeChat Pay were rapidly gaining popularity, U.S. banks once again raised the banner of protecting small banks.

Of course, the ultimate victims are U.S.-based fintech companies like PayPal, and this has fostered the false narrative that third-party payments rely on banks to disrupt banks.

But Crypto is different, really, it's different.

Faced with aggressive banking and regulatory pressures, Circle is undeniably more American and more compliant, while Tether is an offshore, underground fish that turned over—but for a long time and across a wide region, $USDC and $USDT were not competitors.

In simple terms, USDC follows the logic of "DeFi + B2B + stablecoin," while USDT embodies the narrative of "stablecoin + CEX + P2P."

It may sound surprising, but USDC is more widely used in DeFi, serving as a dominant quote asset in mainstream scenarios like DEXs and lending platforms, far surpassing USDT—while, aside from Coinbase, the majority of CEX liquidity is denominated in USDT.

In the financial industry, USDC has become the standard stablecoin, and Circle’s stack, including CCTP, serves as the gateway for institutions to enter the blockchain.

However, USDT has demonstrated sufficient resilience, with $80 billion worth of USDT on Tron supporting global peer-to-peer transfer demands; dollarization in Argentina and Nigeria is essentially USDTization.

According to a joint survey by Artemis and McKinsey, the $35 trillion in global stablecoin transaction volume is not entirely genuine; only about $390 billion (approximately 1%) represents actual stablecoin payments, accounting for just 0.02% of global payment volume (over $2 trillion).

• B2B payments: $226 billion (primary use case, accounting for 60%, up 733% year-over-year), representing only 0.01% of the approximately $1.6 trillion global B2B payments market.
• Global payroll and cross-border remittances: $90 billion (<1% of global share).
• Clearing and settlement: $8 billion (<0.01% of global share).
• U Card: $4.5 billion.

This data feels more authentic in everyday experience—perhaps the trend toward stablecoin adoption is more significant. You’ll see fintech companies actively integrating with banks, while banks simultaneously resist stablecoin yields yet support greater stablecoin usage.

Observing Tether’s recent moves, the collaboration with Lutnick and the launch of USAT may be mere distractions; the $200 million investment in Whop is more genuine and can be understood as purchasing access to 18 million users, strategically targeting first-world markets through reverse remittances from the global south.

Therefore, you'll see cross-border remittance companies connecting Latin America ⇄ the U.S., South Asia ⇄ the Middle East, and Africa ⇄ Europe more commonly supporting USDT, while Stripe and Huma default to USDC.

The fundamental nature of the crypto space is P2P, while Circle has consciously pursued business development with enterprises and banks; the widespread media coverage of B2B as if it were the future trend misrepresents the true direction of payments.

As previously mentioned, pure transfers, settlements, and aggregated channels offer little value, as their throughput is always a fixed number and lacks the speculative potential of a market dream. While everyone needs GPUs for gaming, the maximum demand might reach only 7 billion units of the 5090—clearly far less than the growth driven by AI as the Fourth Industrial Revolution.

Payment is not a SaaS or a feature—it's an AI-powered payment infrastructure like Cloudflare, where the value of a distribution network cannot be measured by quantity.

This is the story Crypto wants to tell the world: to make stablecoins more than just a means of payment, and to keep money on-chain from end to end.

Everyone is talking about the demise of SaaS and the obsolescence of channel partners, as if decades of fintech will change hands overnight.

Of course, things won't happen this quickly, especially since USDC's institutional adoption in B2B contexts still takes time; Tether's sole push of USDT and heavy reliance on old channels may not lead to a sustainable future.

If setting observation points for Crypto’s payment narrative, the only useful one is how payment and revenue are handled—this is now very clear:

• To benefit from yield, you must remain on-chain in DeFi, like the MetaMask U Card partnering with Aave to find a workaround to access the U.S. market—yet still unable to enter the broader consumer ecosystem;
• To scale payments, obtain a bank charter from the OCC to issue compliant, yield-free stablecoins and enter the vast financial derivatives markets regulated by the CFTC and SEC.
• Regarding the Asian institutional-grade USD stablecoin $FYUSD issued by BitGo and the euro stablecoin $EURC from the same team as Circle, both have chosen to limit themselves to a narrow scope.

The essence of B2B is a pipeline; the essence of C2C is scale; the essence of B2C is a plugin.

Throughout the history of payment stablecoins, the hope of replacing card networks has come from public chains/L2s; however, to match the advantage that fintech holds over banks, a new product combining MMF+ payment functionality is required—one that surpasses banks in capital efficiency.

Peter Thiel is bullish on neobanks and neobrokers, while Vitalik is bullish on ETH-backed yield-bearing stablecoins.

At this point, Vitalik actually sees more clearly: without ETH-based yield-stablecoins to diversify risk, at the very least, one should consider RWA-based assets to diversify income sources.

In short, lacking payment functionality based on on-chain yields means you cannot escape the dominance of dollar-denominated assets, and you will ultimately be tamed by OCC into becoming banking institutions—those willing to trade freedom for security will end up losing both freedom and security.

Here is the second risky judgment: Existing B2B enterprise use cases based on USDC and cross-border remittance projects incorporating USDT transfers cannot propel payment stablecoins across the threshold of global adoption; they hold only transitional significance and will not become the dominant players of the next era.

Image caption: Payment in stablecoins in circulation, source: @zuoyeweb3

The phase mission of using yield as a customer acquisition tool has been halted; under pressure from the banking sector, not only has off-chain activity been impacted, but on-chain activity has also gone quiet following $USDe and $xUSD— it’s time to seriously study real-world adoption of payments.

However, note that if you focus solely on payments while ignoring yield characteristics, you’ll miss the most valuable 50% of this wave—USDT/USDC, earning Treasury interest, are effectively recruiting the masses, and the banking sector wins the third wave, continuing to dominate with the cheapest demand assets.

Following in the footsteps of Fintech, we hope Crypto will carve out a different future.

Four power sources are driving the new battle in payments: Stripe and others are desperately embracing new narratives in pursuit of an IPO; Meta and Google recognize their bargaining power as channel providers; banks seek to retain channel fees and low-cost assets; and Tether is heavily investing in payment companies in a bid to encircle Circle.

Two new narratives have been bundled into future visions, with stablecoins regarded as the default payment tool for agents—no one has ever questioned whether agents are truly necessary.

This issue will be discussed further below.