by Coinstrooper Crypto Articles
Quick Take
  • Institutional finance has always needed a settlement layer that moves money between organizations.
  • For decades, that layer was correspondent banking: bank-to-bank, one to three days, closed on weekends.
  • In 2025 alone, stablecoins moved $33 trillion, roughly double Visa’s annual payment volume.
  • Visa settled $3.5 billion in USDC through US banks.

What Happened

PayPal launched its own stablecoin across 70 markets. The settlement layer has changed. This piece traces how stablecoin infrastructure replaced it, and who built the rails that institutional finance now depends on.

When firms of that size receive billions from Paxos, those funds are freshly minted stablecoins for institutional use, whether to fill a PayPal merchant payout, settle a Mastercard acquirer obligation, or provide liquidity for a Visa banking partner. The stablecoin is created for settlement and redeemed afterward.

Market Context

In 2025 alone, stablecoins moved $33 trillion, roughly double Visa’s annual payment volume. JP Morgan settled debt in USDC on Solana. Visa settled $3.5 billion in USDC through US banks.

Total stablecoin market cap reached $317.89 billion as of April 2026, up from roughly $125 billion in early 2024.

Dune Analytics data shows stablecoins transferred $10.5 trillion in January 2026 alone. For context, Visa processed $16.7 trillion in total fiat payment volume across its entire fiscal year 2025.

Mastercard processed $10.6 trillion in gross dollar volume over the same period. One month of stablecoin transfers on public blockchains approached what Mastercard’s fiat network moved in an entire year.

Meanwhile, PayPal’s PYUSD moved $22.8 billion. Mastercard’s USDG moved $11.7 billion. The TradFi stablecoins are now visible on the volume charts, and every one of them traces back to just two minters.

These are Wall Street market makers and crypto-native trading desks, not correspondent banking chains.

Coinbase appears as a top counterparty for both minters, the one distributor straddling both sides of the TradFi settlement market.

Why It Matters

Institutional finance has always needed a settlement layer that moves money between organizations. For decades, that layer was correspondent banking: bank-to-bank, one to three days, closed on weekends.

$10.5 Trillion in One Month, and Institutions are in the Driving Seat

Details

The GENIUS Act, signed into law in mid-2025, created a federal framework for payment stablecoins, unlocking institutional adoption. The growth since has been vertical.

The DefiLlama leaderboard from earlier clearly tells the institutional story. PayPal’s PYUSD ranks #7, with a supply of $3.95 billion. BlackRock’s BUIDL is #8 at $2.96 billion.

The Mastercard-partnered USDG is #11 at $1.92 billion. These are not crypto-native tokens. These are stablecoins issued by or connected to the largest names in traditional finance, now ranked alongside USDT and USDC.

USDC moved $8.3 trillion of the January total, nearly five times USDT’s $1.7 trillion despite being 2.7 times smaller in supply. USDT dominates holdings. USDC dominates movement.

That distinction matters because USDC is the stablecoin Visa chose for settlement, JP Morgan used for the Galaxy debt deal, and Stripe’s infrastructure runs on. The institutional settlement layer runs primarily on a single token, minted by Circle.

Two Minter, One Rail, and It Bypasses Banks Entirely

Circle and Paxos are the two minters. Circle mints USDC, the token that moved $8.3 trillion in January. Paxos mints PYUSD for PayPal and USDG for the Global Dollar Network that Mastercard anchors alongside Robinhood, Kraken, and DBS Bank. Between them, every major TradFi stablecoin integration traces back to one of these two entities.

Arkham Intelligence data shows what happens after minting. Paxos has pushed $89.2 billion outward across 5,208 mint-and-burn transactions. The recipients are not banks.

They are Binance ($22 billion), Wintermute ($12.77 billion), Jane Street ($6 billion), Coinbase ($2 billion), and other big names.

Circle’s counterparty data shows the same pattern. $6.17 billion in mint and burn activity. Wintermute at $1.64 billion. Coinbase at $2.1 billion combined across multiple deposit addresses.

The Paxos and Circle outflows are dominated by mint and burn operations, the mechanism by which stablecoin issuers create new tokens when clients need them and destroy them on redemption. The scale of the counterparties reveals where institutional settlement sits.

That on-demand cycle does not exist in correspondent banking. That is how stablecoin infrastructure became the settlement rail. But where do those stablecoins sit between minting and burning?

Between Minting and Burning, Stablecoin Infrastructure Relies on Crypto Custody