How programmable stablecoin settlement can enhance trusted payment infrastructure without replacing it

Every time a consumer taps a card or clicks “Pay,” money doesn’t move right away. What moves first is intent—a signal that sets activity in motion across the payments ecosystem. Settlement follows only after the necessary approvals and checks occur, often on timelines the end user never sees.

Traditional payment rails are built for trust and scale. They provide reliability and regulatory certainty, but they were never designed to carry execution logic or business conditions alongside the payment itself. As commerce becomes more digital and event-driven, the separation between intent and settlement creates friction behind the scenes.

Stablecoin payments introduce a different capability: programmable logic embedded directly into money movement. This logic isn’t meant to replace existing rails, but to enhance how settlement works when paired with infrastructure that financial institutions already trust.

The Foundations of Money Movement

Regardless of the rail, every payment follows a familiar lifecycle:

• Event: A purchase, delivery, or contractual trigger
• Payment Capture: Card authorization or account debit
• Risk Checks & Messaging: Fraud screening and approval
• Settlement: Funds move between financial institutions
• Disputes & Adjustments: Returns, chargebacks, or corrections

In card and ACH systems, these steps are handled by different parties across separate platforms. That distribution helps manage risk, but it also fragments context. No single participant sees the full picture of why money moved, when it should settle, or what conditions apply.

For merchants, this often translates into delayed access to funds and time-consuming reconciliation. Most card payments settle 1 to 3 business days after authorization, depending on the network and processor. Some processors offer same-day or next-day funding, but those options typically rely on prefunding or balance advances rather than real-time settlement on the underlying rail. Instant payment networks such as the RTP® network and the FedNow® Service address this delay by settling transactions immediately and irrevocably. Even so, they rely on external systems and processes to handle conditional checks and operational workflows.

Where Stablecoin Payments Add New Capabilities

Stablecoin payments bring programmability to the settlement layer itself. Instead of relying on downstream systems to interpret what should happen after a transaction is authorized, the logic governing settlement can be defined upfront.

A payment, for example, can be structured to release funds only after delivery is confirmed or a service milestone is met. If that signal never arrives, the funds can remain on hold or returned automatically. This removes manual steps that would otherwise require reconciliation or customer intervention.

The result is greater transparency and less operational friction, particularly for complex or multi-party payment flows that are difficult to automate on traditional rails alone.

Institutional participation in stablecoin activity is part of a much larger growth trend. On public blockchains, stablecoin transaction volume exceeded $8.9 trillion during the first half of 2025, highlighting the scale of transfers and usage across markets and platforms. Independent data shows the total supply of stablecoins in circulation has grown to more than $300 billion by late 2025, reflecting a material increase in issuance and utility over the past several years. At the same time, stablecoin usage continues to support around $30 billion in on-chain transaction activity daily, according to recent payments industry estimates, illustrating sustained momentum as these assets extend beyond purely crypto trading into broader financial flows. 

Why Fully On-Chain Payment Models Have Limits

While stablecoin programmability is powerful, fully on-chain payment models introduce challenges for regulated financial institutions.

Smart contracts execute exactly as written, leaving little room for error or recourse if assumptions are wrong. Stablecoin reliability depends on reserve management and issuer controls. External data, such as delivery confirmation, can arrive late or fail altogether. Meanwhile, dispute resolution and consumer protection frameworks are still evolving in on-chain environments.

For financial institutions, speed alone is not enough. Payments must also support accountability, compliance, and clearly defined responsibilities when something goes wrong.

The Hybrid Model Emerging Across the Industry

Rather than replacing existing rails, many institutions are taking a hybrid approach that blends stablecoin settlement with traditional authorization and risk controls.

In this model, stablecoins are used where they add the most value: reducing settlement delays and liquidity friction. Authorization and dispute handling remain anchored in established networks, supported by fraud controls that already meet regulatory expectations.

Major payment networks are actively exploring this approach. Initiatives like Mastercard’s Multi-Token Network and Visa’s Cross-Border Stablecoin Settlement Pilot show how regulated stablecoins such as USDC can modernize settlement while preserving the protections and controls that financial institutions depend on.

Why Blending Rails Works

Payments innovation doesn’t require dismantling infrastructure that already works. Card networks and account-based payment rails provide the reach and regulatory clarity that financial institutions rely on. Stablecoins add automation and the ability to execute payments based on real-world events. Together, these capabilities allow payments to move when they should and settle with better context.

Instant rails such as the RTP network already process billions of dollars in daily transaction volume with real-time settlement. Stablecoin programmability complements these rails by extending logic-driven settlement across platforms and use cases that fall outside traditional account-to-account flows.

Looking Ahead

As digital commerce evolves, and as AI-driven systems increasingly initiate transactions, the demand for payments that carry their own context will continue to grow. The future of payments won’t be decided by choosing between crypto and cards, or between new rails and existing ones. It will belong to systems that combine programmable logic with institutional trust. Stablecoin payments are unlikely to replace existing financial institutions or the payment networks they rely on. Instead, they are reshaping how settlement and intelligence can coexist within a unified, trusted payments ecosystem.

Find out more about stablecoin in the webinar, Payments in 2026: What You Need to Know.