Stablecoins have come a long way from being a convenient option for cryptocurrencies, allowing users to park dollars between transactions without touching fiat currencies. According to BlackRock’s Global Outlook 2026, stablecoins are now spreading beyond exchanges and becoming integrated into mainstream payment systems, with potential expansion in cross-border remittances and daily usage in emerging markets.
This shift in perspective is significant, especially coming from a prominent institution like BlackRock. The question is no longer whether stablecoins are beneficial for crypto, but rather whether they are on their way to becoming a fundamental settlement rail that coexists with traditional finance.
From Trading Chips to Payment Rails
Stablecoins initially gained popularity due to crypto volatility, providing traders with a 24/7 account and settlement unit. BlackRock’s report highlights that stablecoins have outgrown this niche, with integration into mainstream payment systems and cross-border payments being a natural next step, particularly where latency, fees, and friction remain high at correspondent banks.
The GENIUS Act, signed into law on July 18, 2025, created a federal framework for payment stablecoins, including reserve and disclosure requirements, providing regulatory clarity that changes the risk calculation for banks, large merchants, and payment networks.
The total value of stablecoins was around $298 billion as of January 5, 2026, with USDT and USDC dominating the market. BlackRock’s report, using CoinGecko data, finds that stablecoins reached record highs in market capitalization despite fluctuating crypto prices, highlighting their role as the system’s main source of “dollar liquidity and on-chain stability.”
The Value is Created During Billing
As stablecoins become increasingly complex, with uses such as collateral, treasury management, tokenized money market funds, and cross-border netting, the base layer is more important than marketing. This layer requires predictable finality, high liquidity, robust tools, and a governance and security model that institutions can trust over decades.
Ethereum could potentially fill this role, not because it is the cheapest chain to ship a stablecoin, but because it has become the anchor layer for an ecosystem that treats execution and settlement as separate functions. Ethereum’s own documentation highlights its role as a settlement layer that anchors security and provides objective finality when disputes arise on another chain.
Tokenization is Quietly Steering Institutions Toward Ethereum
BlackRock’s stablecoin space is also a tokenization story, with stablecoins serving as a “modest but significant step toward a tokenized financial system” in which digital dollars coexist with traditional intermediation and policy transmission channels. Tokenization turns this abstract idea into an accounting reality, involving issuing a claim to a real-world asset on a blockchain.
Ethereum hosts approximately $12.5 billion in tokenized real-world assets, representing around 65% market share as of January 5, 2026. BlackRock’s tokenized money market fund, BUIDL, debuted on Ethereum and later expanded to multiple chains, including Solana and several Ethereum L2s, as tokenized treasuries became one of the clearest real-world use cases for on-chain finance.
The Bet is Not Risk-Free
While Ethereum has become the default answer for institutional settlement needs, there are risks involved. Emerging markets note that stablecoins could expand access to the US dollar while making currency control more difficult if domestic currencies decline. There are also issuer risks, with not all stablecoins being the same, and the market structure can be based on trust.
S&P Global Ratings downgraded its assessment of Tether reserves in November 2025, citing concerns about limited transparency. It is also not guaranteed that Ethereum is the only settlement layer that matters, with Visa’s USDC settlement work showing that major players are willing to route stablecoin settlement through other chains if it suits their operational needs.
However, as stablecoins become more widespread, the premium is shifting to layers that can provide credible settlement, integration with tokenized assets, and a security model strong enough to convince institutions that they can park real money and real collateral on-chain without experiencing a governance surprise. For this reason, ETH is a likely bet for the settlement standard for tokenized dollars.
According to BlackRock, stablecoins are no longer niche, and they “become the bridge between traditional finance and digital liquidity.” As the crypto market continues to evolve, it will be interesting to see how stablecoins and Ethereum continue to shape the financial landscape.
Source: https://cryptoslate.com/blackrock-stablecoin-ethereum-settlement-standard-2026/
