Alex Novozhenov is a serial entrepreneur with 20+ years of experience in fintech, product innovation, and strategy. He is the Co-Founder and CEO of Nodu, a UK-based stablecoin infrastructure startup that makes digital assets work inside traditional finance. Before Nodu, Alex co-founded Crassula, one of Europe’s leading Banking-as-a-Service platforms, which now powers 75+ fintechs worldwide and integrates with Fireblocks, Clear Bank, and Paysend.
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For years, stablecoins sat in the background of crypto markets, functioning as settlement tools between exchanges instead of instruments of the financial system itself. That distinction is fading fast. In 2026, I expect stablecoins will increasingly function as payments infrastructure, particularly in B2B flows, treasury operations, and global payouts. What began as a liquidity workaround has matured into a viable settlement rail, and there's no turning back.
Visa’s expansion of USDC settlement into its core settlement operations offers an early signal of this shift. Stablecoins are being treated as settlement rails rather than trading pairs, stepping into roles historically dominated by correspondent banking networks and card schemes. Institutions are responding to practical advantages: programmability, fast finality, and clearer cost structures in a system where legacy rails remain slow and opaque.
A market split between regulated rails and offshore liquidity
One of the most durable changes underway is a structural bifurcation of the stablecoin market.
On one side are regulated, onshore stablecoins, distributed through supervised channels and embedded into institutional workflows. On the other are offshore liquidity stablecoins, which move faster, operate across borders with fewer constraints, and dominate in regions where regulatory arbitrage remains viable.
This divide is driven by a familiar dynamic: liquidity attracts integration. The more liquid a stablecoin becomes, the more exchanges, protocols, and payment platforms adopt it, reinforcing network effects that issuers actively compete to secure.
The contrast between Circle and Tether illustrates this clearly. Circle has pursued a consistently regulated, onshore strategy, positioning USDC as a compliant settlement instrument within formal financial systems. Tether, by contrast, operates largely through offshore or semi-offshore structures, retaining flexibility and global liquidity reach, particularly outside tightly regulated Western markets.
Over time, this dynamic hardens into two tiers: compliant rails designed for institutional use and regulated payments, and offshore liquidity routes optimised for speed and reach.
This split reflects accelerating global policy coordination combined with uneven enforcement across jurisdictions, and it is structural, not transitional.
DeFi lending moves toward balance-sheet logic
As stablecoin infrastructure matures, DeFi lending is also evolving. By 2026, the sector has largely moved away from reflexive leverage cycles toward more structured on-chain credit markets.
BTC and ETH consolidate their role as primary collateral, while stablecoins serve as the settlement and yield currency. In this phase, regulated stablecoins underpin lending principal, interest payments, and more predictable returns. The result is a shift in framing from DeFi as an alternative financial system to DeFi as programmable balance-sheet infrastructure that institutions can increasingly understand and evaluate.
Regulation shifts from approval to oversight
In the EU, MiCA increasingly operates less as a licensing gateway and more as an ongoing compliance regime. By 2026, the regulatory focus centres on governance, reserve management, disclosures, and conduct rather than initial authorisation.
At the same time, regulators are converging on a “double-licence” reality. Where firms effectively provide payment services — wallets, transfers, or merchant acceptance — MiCA authorisation alone is often viewed as insufficient. Parallel EMI or PI permissions, or partnerships with licensed institutions, become the expected model.
The logic is simple. Systems that behave like payment infrastructure should be regulated as such.
Cross-border transparency becomes political
Cross-border payments remain a regulatory pressure point. G20 targets around price transparency and full-value delivery increasingly shape policy expectations.
Here, stablecoins compare favourably. Fees are visible on-chain, settlement is immediate, and total costs are knowable upfront. Traditional cross-border transfers still rely on layered FX spreads, correspondent fees, and delayed reconciliation, with costs often revealed only after settlement.
As regulators push for clearer disclosure and fewer hidden fees, stablecoins do more than benefit from the comparison. They expose the inefficiencies of legacy rails and intensify pressure for reform.
Incumbents adapt rather than exit
Banks and card networks have responded pragmatically. Instead of being displaced, they are repositioning themselves as orchestrators.
Their value increasingly lies in liquidity management, compliance tooling, acceptance infrastructure, and treasury services. Stablecoins become another rail inside institutional stacks, shifting value away from transaction execution toward governance and coordination.
Sovereignty, scale, and systemic risk
In Europe, payments sovereignty is increasingly framed as a strategic concern. Dependence on non-EU networks is treated as a vulnerability, driving support for European settlement rails, euro-denominated digital money, and locally controlled infrastructure. Global stablecoins remain relevant, but their distribution and supervision increasingly reflect these priorities.
At the same time, systemic risk moves to the foreground. As stablecoin market capitalisation pushes toward the trillion-dollar range, issuers’ reserve holdings begin to resemble bank balance sheets in all but name. Concentration risk and reserve custody become unavoidable questions.
MiCA addresses this directly through diversification requirements and mandates to hold a significant share of reserves with EU commercial banks. In the US, issuers increasingly pursue banking-like charters, reflecting regulatory recognition that stablecoin issuers already carry systemic relevance in practice.
Expect stress testing, tighter reserve rules, and deeper disclosures as scale increases.
CBDCs lag while stablecoins ship
CBDC programmes continue, but adoption remains slow. The challenge is less technical than political. Cash enables anonymous value transfer. Fully transparent state-issued digital money raises unresolved privacy and civil-liberty concerns.
Meanwhile, commercial stablecoins are live, integrated, and embedded in real economic flows. As a result, they continue to dominate near-term cross-border settlement experiments, even where CBDC pilots exist.
The bottom line
By 2026, stablecoins function as contested infrastructure, shaped by regulation, liquidity competition, systemic-risk concerns, and geopolitical priorities. The open question is not persistence, but which forms of stablecoins are permitted to scale, and under whose rules.
