Digital currencies create new opportunities for banks and FinTech

By Divya Shah

Key takeaways

What it matters: Stablecoins create opportunities for FinTech firms to develop faster cross-border payments, digital asset custody, tokenisation services and regulated financial infrastructure.

Stablecoins and central bank digital currencies (CBDCs) are gaining attention across financial services as banks, payment providers and central banks explore their use in payments, settlement and cross-border transactions. Digital currencies are increasingly moving beyond cryptocurrency trading to become part of mainstream financial infrastructure. 

According to Polaris Market Research, the global stablecoins and CBDCs market was valued at $32.24 billion in 2025 and is projected to reach $409.57 billion by 2034, growing at a compound annual growth rate (CAGR) of 32.7% between 2026 and 2034. 

Regulatory clarity is helping financial institutions explore digital currency services. In the US, the GENIUS Act established a regulatory framework for payment stablecoins, while Europe’s Markets in Crypto-Assets (MiCA) regulation introduced requirements for stablecoin issuance, reserves and redemption. 

These frameworks are providing clearer guidelines for banks, payment networks and technology providers looking to develop digital currency services. 

Financial institutions have also started testing practical applications. In September 2026, U.S. Bank completed a cross-border payments pilot using its USBDC stablecoin on the Stellar blockchain. In October 2026, BNY expanded its digital asset custody services to selected institutions in the European Union under MiCA. 

Stablecoins are attracting interest because they can support faster transactions and settlement beyond traditional banking hours. Their use in international transfers could also reduce processing delays and costs, creating opportunities for payment providers and remittance businesses. 

Polaris Market Research found that payments and settlement accounted for 34.6% of the market in 2025. Stablecoins could also support tokenised asset transactions, digital wallets and corporate treasury operations, allowing financial institutions to manage liquidity and transfer funds more efficiently. 

Banks accounted for 42.7% of the market in 2025, supported by demand for digital asset custody, transaction management and regulated payment infrastructure. FinTech companies and payment service providers are also exploring stablecoins to develop digital wallets, international payment services and faster payout solutions. 

By type, stablecoins held the largest share at 68.4% in 2025. Their use in digital payments, decentralised finance and cross-border transactions supported this position. CBDCs, meanwhile, are gaining attention as central banks explore faster payment systems, financial inclusion and institutional settlement. 

Blockchain remained the leading technology, supporting digital currency issuance, transaction processing and transparent record-keeping. Interoperability solutions are also becoming important as financial institutions look to connect different blockchain networks and existing financial platforms. 

North America led the market with a 38.6% share in 2025, while Asia-Pacific is emerging as a major growth region. Rising digital payment adoption, expanding FinTech services and government-backed digital currency initiatives are supporting regional opportunities. 

However, the market continues to face challenges, including differences in national regulations, reserve transparency and concerns about the movement of deposits from traditional banks into digital currencies. Strong compliance, risk management and secure infrastructure will be essential for wider adoption. 

What’s next for FinTech? 

Stablecoin adoption is expanding beyond payments into tokenised assets and enterprise treasury management. Financial institutions could use stablecoins to settle transactions involving tokenised real-world assets and improve liquidity management. 

Recent developments also reflect this shift. In October 2026, Circle and Tereina partnered to integrate USDC and EURC into enterprise payments through SAP, while BNY expanded its digital asset custody services in Europe. 

According to Polaris Market Research, stablecoins and CBDCs are entering a new phase of growth as financial institutions adopt digital currencies for payments, settlement and remittances. The research also projected Asia-Pacific to record the fastest regional growth, with a CAGR of 35.8% between 2026 and 2034. 

For FinTech companies, the opportunity lies in connecting digital currencies with existing financial systems. Payment infrastructure, custody services, compliance technology and blockchain interoperability are likely to play important roles as digital currencies become more integrated into financial services.