Stablecoins were once a crypto commodity, a way to park dollars between transactions without touching fiat currency. However, the industry has matured enough that BlackRock now considers them fundamental rails for the market.
In its Global Outlook 2026, the BlackRock Investment Institute argued that stablecoins are expanding beyond exchanges and integrating into traditional payment systems. He also said they could expand into cross-border transfers and everyday use in emerging markets.
This framework is important because it changes the question investors are asking, especially when it comes from a name as big as BlackRock.
The point here is not whether stablecoins are good for crypto. The question is whether they are on the way to becoming a colonization rail that sits alongside, and sometimes inside, traditional finance.
If so, which blockchains will ultimately serve as the base layer for final settlement, collateral, and tokenized cash?
BlackRock puts the issues bluntly. “Stablecoins are no longer niche,” the report quotes Samara Cohen, global head of market development at BlackRock.
They “become the bridge between traditional finance and digital liquidity”.
From trading chip to payment rail
Stablecoins began to flourish thanks to the volatility of cryptocurrencies. Markets fluctuate, banks close on weekends, and exchanges rely on a patchwork of fiat rails for redemptions.
Dollar-pegged tokens solved this operational problem by providing traders with a 24/7 unit of account and settlement asset.
BlackRock points out that stablecoins have now moved beyond this niche. The company said integration into traditional payment systems and cross-border payments is a natural next step, particularly where latency, fees and correspondent banking friction remain stubbornly high.
One reason the timing seems right is regulation. In the United States, the GENIUS Act was signed into law on July 18, 2025, creating a federal framework for payment stablecoins, including reserve and disclosure requirements.
This type of legal clarity does not guarantee mass adoption. But it changes the risk calculus for banks, large merchants and payment networks that must answer to compliance teams and regulators.
The size of the market is also no longer theoretical. The total value of stablecoins stood at approximately $298 billion as of January 5, 2026, with USDT and USDC still dominating the stack.
BlackRock’s report, using CoinGecko data through November 27, 2025, notes that stablecoins reached record levels in terms of market capitalization, even as cryptocurrency prices fluctuated. It highlights their role as the system’s primary source of “dollar liquidity and on-chain stability.”
This combination of legal recognition and scale is why stablecoins have started showing up in places they never were before, like the back office of global payments.
Visa offered a concrete example in December 2025. The company said it launched USDC settlement in the United States, allowing issuing and acquiring partners to settle with Visa in Circle’s dollar stablecoin.
Visa said early participants in the banking industry have agreed on Solana. It touted the move as a way to modernize its settlement layer with faster movement of funds, seven-day availability and resilience during weekends and holidays.
Stablecoins enter the part of finance that is usually invisible until it breaks: settlement.
Settlement is where value accumulates
If stablecoins are now indeed digital dollars, the next question is where those dollars will be as the system evolves.
As stablecoins evolve into more complex uses, such as collateral, treasury management, tokenized money market funds, and cross-border clearing, the base layer matters more than marketing. This layer needs predictable finality, significant liquidity, robust tools, and a governance and security model that institutions can trust for decades, not just one cycle.
This is where Ethereum could come in.
The value proposition of Ethereum in 2026 is not that it is the cheapest chain to send a stablecoin. Many networks are competing there, and Visa’s Solana pilot project is a reminder that high-speed channels have their place at the table.
The case for Ethereum is that it has become the anchor layer of an ecosystem that treats execution and settlement as separate functions.
Ethereum’s own documentation makes this explicit in the context of rollups, where Ethereum acts as the settlement layer that anchors security and provides objective finality in the event of disputes on another chain.
Thus, when users move quickly and cheaply on L2s, the base chain still plays the role of arbiter. The more valuable the regulated activity, the more valuable the role of arbiter becomes.
Tokenization discreetly directs institutions towards Ethereum
BlackRock’s stablecoin section is also a tokenization story. The report describes stablecoins as a “small but significant step toward a tokenized financial system,” in which digital dollars coexist with, and sometimes reshape, traditional channels of intermediation and policy transmission.
Tokenization transforms this abstract idea into a reality. This means issuing a claim on a real-world asset, such as a Treasury bond fund, on a blockchain.
Stablecoins then serve as the cash basis for subscriptions, redemptions and secondary market transactions.
On this front, Ethereum is still the center of gravity. RWA.xyz shows that Ethereum hosts approximately $12.5 billion in real-world tokenized assets, representing a market share of approximately 65% as of January 5, 2026.
BlackRock itself helped create this gravitational pull. Its tokenized money market fund, BUIDL, debuted on Ethereum and later expanded to multiple chains, including Solana and multiple Ethereum L2s, as tokenized Treasuries became one of the clearest real-world use cases for on-chain finance.
Even on a multi-chain footprint, the institutional model is telling: start where liquidity, custody integrations, and smart contract standards are most mature, then expand as distribution channels develop.
JPMorgan is moving in the same direction. The bank launched a tokenized money market fund with stocks represented by digital tokens on Ethereum.
It accepted subscriptions in cash or USDC and linked this push in part to the change in stablecoin regulations that followed the GENIUS Act.
This suggests that stablecoins don’t just need a fast network for payments. They also need a credible settlement fabric for tokenized collateral, yield-bearing cash equivalents and institutional-grade financing.
Ethereum has become the default answer to this need, not because it wins every benchmark, but because it has become the settlement court where the most valuable cases are heard.
The bet is not without risk
BlackRock’s outlook includes the caution inherent in this opportunity. In emerging markets, he notes that stablecoins could expand access to the dollar while also challenging monetary control if use of the domestic currency declines.
This is a political economy problem, not a technological problem. This is also the sort of thing that can trigger restrictive policy responses exactly where stablecoins are product-market fit.
There are also issuer risks. Not all stablecoins are the same and market structure can depend on trust.
S&P Global Ratings lowered its reserve assessment for Tether in November 2025, citing concerns over limited transparency. This is a reminder that the stability of the system may depend on what is behind the stake.
It is also not guaranteed that Ethereum is the only significant settlement layer. Visa’s USDC settlement work shows that large players are willing to route stablecoin settlement to other chains when it meets their operational needs.
Circle is positioning USDC to be natively supported on dozens of networks, a strategy that makes stablecoin liquidity portable and reduces reliance on a single chain.
But portability goes both ways. As stablecoins spread, the premium shifts to layers that can provide credible settlement, integration with tokenized assets, and a security model strong enough to persuade institutions that they can park real money and real collateral on-chain without waking up to a governance surprise.
This is why ETH is a likely bet on the token dollar settlement standard. If stablecoins become what BlackRock claims to be, a bridge between traditional finance and digital liquidity, the bridge still needs a foundation.
In the current crypto market architecture, Ethereum is the foundation that most institutions continue to return to.
