Are Payment Stablecoins Bringing New Solutions to the Fintech Sector's Crisis?

Decentralized finance (DeFi) and stablecoins are driving a new transformation in the traditional fintech industry. Recent regulatory decisions have limited income-generating stablecoins by banking sectors, while payment-focused stablecoins are being adopted by centralized platforms. PayPal’s launch of $PYUSD, Circle’s focus on enterprise solutions, and Tether’s expansion of its global transfer network—these three players signal the start of a new battle in the fintech world. So, who will be the true winner in this fight?

The Rules of the New Money Game Are Changing with Fintech Billionaires

Over the past 20 years, fintech companies have aimed to build independent payment infrastructure outside of banks. Stripe’s $159 billion valuation, Revolut’s $75 billion market cap, and Wise’s success in international transfers—these are part of the industry’s growth story.

But the reality is different. Fintech firms have never been truly independent because they remain fully dependent on the banking system. Managing dollar flows without passing through banking networks is impossible. Although Stripe’s transaction volume isn’t five times that of Adyen, its valuation is 13 times higher—this gap is explained solely by the market’s imagination for stablecoins and AI agents.

The fintech sector emerged as a response to the banking system after the 2008 crisis. But now, it faces its own crisis. While PayPal was valued at $340 billion in 2021, that value has since declined. The sector’s core issue is simple: payment processing itself isn’t sufficiently profitable. Fintech companies can’t survive on transaction fees alone unless they are fully integrated into banking.

Payment Stablecoins: New Hope or Temporary Fix?

Stablecoins promise to change this landscape. USDT (by Tether), USDC (by Circle), and other stablecoins are redefining the nature of payments. Transferring dollars on the blockchain is much cheaper and faster than traditional banking channels.

According to research by McKinsey and Artemis, the global stablecoin transaction volume appears to have reached $390 billion, but the actual payment volume is only a tiny fraction of that. While $226 billion is used in B2B payments, $90 billion in cross-border personal transfers, and $8 billion in clearing—these figures seem large but constitute just 0.02% of the total global payment volume.

Tether’s recent strategy is particularly interesting. Its launch of USAT and a $200 million investment in Whop are part of a plan to dominate third-world migrant transfers. Controlling the flow of money across Latin America, South Asia, and Africa through USDT is Tether’s real game.

Circle has taken a different approach: marketing USDC for enterprise B2B scenarios. USDC is more prevalent in DeFi ecosystems, while USDT dominates centralized exchanges. The fintech industry naturally prefers USDC—indicating that Circle is seen as more legitimate in the fintech world.

Fintech vs Banking vs Blockchain: The Triple Conflict

The banking sector is openly reacting against stablecoins. While blocking income-generating stablecoins, it is more lenient with payment stablecoins—this is a strategy to protect its deposit base. The 1970s Merrill Lynch example resurfaces: fintech, which once attracted customers with MMFs, was eventually internalized by big banks, and small banks lost deposits.

Meta and Google are developing their own stablecoin and payment protocols—tech giants know they hold a stronger hand than fintech companies. Billions of users, trillions in market value; an unstoppable force.

In conclusion, fintech companies are caught between the banking industry and internet giants. Stripe is trying to create a new IPO story, while Meta and Google aim to dominate the market, and banking defends the old order (and its old commission rates).

The Real Game: Money Must Stay on the Chain

The potential of stablecoins to transform payments is real, but overhyping the current situation is a mistake. USDT/USDC are backed by government bonds and are essentially just another channel for fintech. Payment processing doesn’t create real value—it just moves money.

The story told by the crypto sector is different: the goal is for money to stay entirely on the blockchain, free from banking and fintech intermediaries. Yield stablecoins, through DeFi protocols, provide real financial services—something fintech has failed to achieve.

Tether’s strategy (migrant transfer channels), Circle’s approach (enterprise disputes), and new projects’ experiments—all outline where the money is headed. The entry of Meta and Google truly threatens the fintech sector.

Conclusion: Is Fintech Over?

The fintech industry has reached a new turning point with blockchain and stablecoins. The traditional fintech model (payment transfer + commissions) is no longer sufficient. Fintech companies will either integrate into banking, fully adopt blockchain technology, or fade into the shadow of internet giants.

The role of stablecoins in the payments market is still uncertain. With only about 1% penetration so far, there is a long road ahead. But the trend is clear: keeping money on the dollar, backed by banking guarantees—this model is closing the door on the old fintech dream.

The new fintech will be different—built on blockchain, decentralized, and closer to production.