How do stablecoins evolve from crypto assets to new infrastructure for payments?

Author: Sleepy.txt , Dongcha Beating

Original Title: Stepping into the stablecoin wave for six years, he sees the prototype of the payment future

This year is destined to be recorded in financial history as the “Year of Stablecoins,” and the current buzz may just be the tip of the iceberg. Beneath the surface, there has been a six-year undercurrent.

In 2019, when Facebook’s stablecoin project Libra shocked the traditional financial world like a deep-water bomb, Raj Parekh was at the heart of the storm at Visa.

As the head of Visa’s cryptocurrency division, Raj experienced the industry’s shift from cautious observation to active participation—a moment of non-consensus.

At that time, traditional finance’s arrogance coexisted with blockchain’s immaturity. Raj’s experience at Visa painfully revealed the industry’s invisible ceiling—not because financial institutions didn’t want innovation, but because the infrastructure at the time simply couldn’t support “global payments.”

Driven by this pain point, he founded Portal Finance, aiming to build better middleware for crypto payments. However, after serving many clients, he realized that regardless of application layer optimizations, the performance bottleneck at the bottom remained the ceiling.

Eventually, the Portal team was acquired by Monad Foundation, with Raj leading the payment ecosystem. In our view, he is the ideal candidate who understands both the application logic of stablecoins and the underlying crypto payment infrastructure—no one is more suited to review this efficiency experiment.

Recently, we spoke with Raj about the development of stablecoins over the past few years. We need to clarify what is driving the current craze for stablecoins—is it regulatory boundaries, the willingness of giants to finally participate, or more pragmatic profit and efficiency considerations.

More importantly, a new industry consensus is forming—that stablecoins are not just assets in the crypto world but could become the infrastructure for next-generation clearing and fund flows.

But questions also arise: how long will this enthusiasm last? Which narratives will be disproven, and which will solidify into long-term structures? Raj’s perspective is especially valuable because he is not an onlooker but has been fighting in the water all along.

In Raj’s narrative, he describes the development of stablecoins as the “email moment” for money—a future where fund flows are as cheap and instant as sending messages. But he also admits he hasn’t fully figured out what this will spawn.

Below is Raj’s self-description, published after being organized by Dongcha Beating:

Prioritize problems over technology

If I had to find a starting point for all this, I think it was 2019.

At that time, I was at Visa, and the atmosphere in the financial industry was very delicate. Facebook suddenly launched the Libra stablecoin project. Before that, most traditional financial institutions viewed cryptocurrencies as either a geek’s toy or a speculative tool. But Libra was different; it made everyone realize that if they didn’t get on this table, they might have no place in the future.

Visa was among the earliest to be publicly listed as a Libra project partner. Libra was very special at the time—it was an early, large-scale, ambitious attempt that brought many different companies together around blockchain and crypto for the first time. Although the final outcome didn’t unfold as everyone initially expected, it was a watershed event that made many traditional institutions take crypto seriously for the first time, rather than just an experimental edge.

Of course, this also brought enormous regulatory pressure. Later, Visa, Mastercard, Stripe, and others withdrew in October 2019.

But after Libra, not only Visa but also Mastercard and other Libra members began to systematize their crypto teams. This was partly to better manage partnerships and networks, and partly to develop products and elevate them into a more comprehensive strategy.

My career started at the intersection of cybersecurity and payments. In the first half of my time at Visa, I mainly built a security platform to help banks understand and respond to data breaches, vulnerabilities, and hacking—centered on risk management. It was during this process that I began to understand blockchain from a payments and fintech perspective, viewing it as an open-source payment system. The most shocking thing was that I had never seen a technology that could move value so rapidly, 24/7 globally.

At the same time, I was also very aware that Visa’s underlying reliance was still on the banking system, Mainframe, wire transfers, and other relatively old tech stacks. For me, open-source systems that could also “transport value” were very attractive. My intuition was simple: in the future, the infrastructure that systems like Visa depend on might gradually be rewritten by blockchain-like systems.

After the Visa Crypto team was established, we didn’t rush to promote the technology. The team consisted of some of the smartest builders I’ve seen—those who understand traditional finance and payments deeply, and also have great respect and understanding of the crypto ecosystem. Ultimately, the crypto world has a strong “community attribute,” and if you want to succeed here, understanding and integrating into it is essential.

At its core, Visa is a payment network. We had to focus heavily on how to empower our partners—payment service providers, banks, fintechs—and identify where inefficiencies exist in cross-border settlement processes.

So our approach wasn’t to push a certain technology onto Visa first, but to identify real problems within Visa and then see if blockchain could solve some of them.

Looking at the settlement chain, a straightforward question emerges: since fund flows are T+1, T+2, why can’t we achieve “second-level settlement”? If we could settle instantly, what benefits would that bring to treasury and cash management teams? For example, if a bank closes at 5 pm, what if the treasurer can initiate settlement at night? Or, if settlement normally doesn’t happen on weekends, what if it could be done seven days a week?

This is why Visa later turned to USDC—we decided to use it as a new settlement mechanism within the Visa system, truly integrated into existing Visa infrastructure. Many might not understand why Visa would test settlement on Ethereum. Back in 2020 and 2021, that sounded crazy.

For example, Crypto.com is a major Visa client. In traditional settlement, Crypto.com needs to sell their crypto assets daily, convert to fiat, and wire via SWIFT or ACH to Visa. The process is painful—mainly because of time. SWIFT isn’t real-time, and there’s a T+2 or longer delay. To avoid settlement default, Crypto.com must lock a large amount of collateral in the bank, known as “pre-funding.”

This money could have been earning interest through business, but instead, it just sits idle—just to cover the slow settlement cycle. We thought, since Crypto.com’s business is built on USDC, why not settle directly with USDC?

So we partnered with Anchorage Digital, a federally licensed digital asset bank. We initiated the first test transaction on Ethereum: when USDC moved from Crypto.com’s address to Anchorage’s address, and settled within seconds—that feeling was incredible.

Infrastructure disconnect

My experience with stablecoin settlement at Visa painfully revealed that the industry infrastructure is too immature.

I always viewed payments and fund flows as an “abstracted experience.” For example, when you buy coffee at a cafe, you just swipe your card, complete the transaction, and get your coffee; the merchant gets paid—simple. The user doesn’t see how many steps happen behind the scenes: communicating with your bank, interacting with the network, confirming the transaction, settling… all should be hidden and invisible to the user.

Similarly, I see blockchain as a good settlement technology, but ultimately, it should be abstracted through infrastructure and application-layer services, so users don’t need to understand the chain’s complexity. That’s why I decided to leave Visa and create Portal—a developer platform that allows any fintech company to integrate stablecoin payments as easily as calling an API.

Honestly, I never imagined Portal would be acquired. To me, it was more about a mission—I see “building an open-source payment system” as a lifelong pursuit. I believed that if I could make on-chain transactions more user-friendly and enable open-source systems to be used in everyday scenarios—even in a small role—that would still be a huge opportunity.

Our clients range from traditional remittance giants like WorldRemit to many emerging neobanks. But as our business deepened, we fell into a strange cycle.

Some might ask: why not focus on building applications instead of infrastructure? After all, many now complain that “there’s too much infrastructure, not enough applications.” I think this is a cyclical issue. Generally, better infrastructure comes first, which then spurs new applications; as new applications emerge, they in turn drive the next wave of infrastructure. This is the “application-infrastructure” cycle.

At that time, we saw that the infrastructure layer was still immature, so it made sense to start from infrastructure. Our goal was to run two parallel tracks: one to collaborate with large applications that already have distribution, ecosystems, and transaction volume; the other to make it easy for early-stage companies and developers to start building.

To pursue performance, Portal supported chains like Solana, Polygon, Tron, etc. But after all the effort, the conclusion was always the same: the EVM (Ethereum Virtual Machine) ecosystem’s network effects are too strong—developers are here, liquidity is here.

This creates a paradox: EVM has the strongest ecosystem, but it’s too slow and expensive; other chains are faster but fragmented. We thought that if one day, a system could be both EVM-compatible and achieve high performance with sub-second confirmation, that would be the ultimate solution for payments. So in July this year, we accepted Monad Foundation’s acquisition of Portal, and I started leading the payment business at Monad.

Many ask me: isn’t the public chain market already oversaturated? Why do we need new chains? The question might be asking the wrong way—it’s not “why need new chains,” but “have existing chains truly solved the core payment problems?”

Ask those handling large-scale fund transfers—they’ll tell you their main concern isn’t how new or story-rich the chain is, but whether the unit economics make sense. What’s the cost per transaction? Can confirmation times meet business needs? Is liquidity deep enough across different forex corridors? These are very practical issues.

For example, sub-second finality sounds like a technical metric, but behind it is real money. If a payment takes 15 minutes to confirm, it’s practically unusable in business. But that’s not enough—you also need a large ecosystem around the payment system: stablecoin issuers, on/off ramps, market makers, liquidity providers—these roles are indispensable.

I often use an analogy: we are in the email moment of money. Remember the scene when email first appeared? It wasn’t just about faster writing; it allowed messages to reach the other side of the world in seconds, fundamentally changing human communication.

I see stablecoins and blockchain similarly—they represent a never-before-seen ability to transfer value at internet speed. We haven’t even fully figured out what they will spawn; they could reshape global supply chain finance, or bring remittance costs to zero.

But the key next step is how this technology can be seamlessly integrated into YouTube, into every daily app on your phone. When users don’t feel the presence of blockchain but enjoy internet-speed fund flows—that’s when we truly begin.

Evolving with fund flows, the iteration of stablecoin business models

In July, the US signed the “GENIUS Act,” and the industry landscape is subtly changing. The moat once built by Circle is beginning to fade, driven by a fundamental shift in business models.

In the early days, stablecoin issuers like Tether and Circle had straightforward business logic: users deposit money, the issuer buys US Treasuries, and all interest income belongs to the issuer. That was the first phase.

Now, if you look at new projects like Paxos or M0, you’ll see the game has changed. These new players are directly passing on the interest income generated by underlying assets to users and recipients. This isn’t just profit sharing—it’s creating a new financial primitive—a new form of money supply.

In traditional finance, money in the bank only earns interest when idle. Once you start transferring or paying, the money usually doesn’t generate interest during circulation.

Stablecoins break this limit: even as funds circulate, pay, and trade at high speed, the underlying assets continue to generate interest. This opens a new possibility—funds are not just static but can also earn while flowing.

Of course, we’re still in the early experimental stage of this new mode. I see some teams trying more aggressive approaches—managing large-scale US Treasuries behind the scenes, even planning to pass 100% of interest to users. You might ask: what do they earn? Their logic is to profit from other value-added products and services built around stablecoins, not from interest rate spreads.

So, although it’s just beginning, after the GENIUS Act, the trend is very clear: every major bank and fintech company is seriously considering how to join this game. The future stablecoin business model will not stop at just saving and earning interest.

Besides stablecoins, crypto-native banks are also gaining attention this year. Based on past experience in payments, I see a core difference between traditional fintech and crypto fintech.

The first-generation fintech companies, like Nubank in Brazil or Chime in the US, are fundamentally built on local banking infrastructure. They rely on the local banking system, which limits their service scope mostly to domestic users.

But when you build products based on stablecoins and blockchain, the situation changes completely.

You’re building on a global payment track—something we’ve never seen in financial history. This change is revolutionary: you no longer need to be a fintech company in a single country. From day one, you can build a global bank targeting multiple countries or even the entire world.

This is the biggest unlock: in the history of fintech, we’ve rarely seen such a global-level startup from the start. This model is spawning a new wave of founders, builders, and products—no longer limited by geography. From the very first line of code, the goal is the global market.

Agent Payments and the future of high-frequency finance

If you ask me what excites me most in the next three to five years, it’s the combination of AI Agents (Agentic Payments) and High-Frequency Finance.

A few weeks ago, we held a hackathon in San Francisco themed around AI and crypto. Many developers participated, including a project that integrated US food delivery platform DoorDash with on-chain payments. We are already seeing this trend: agents are no longer limited by human processing speed.

In high-throughput systems, the speed at which agents move funds and complete transactions can be so fast that even the human brain can’t process it in real time. This isn’t just about being faster; it’s a fundamental workflow shift: we’re upgrading from “human efficiency” to “algorithm efficiency,” ultimately heading toward “agent efficiency.” To support this leap from milliseconds to microseconds, blockchain performance must be sufficiently robust.

Meanwhile, user account models are also merging. In the past, your investment account and payment account were separate, but now the boundary is blurring.

This is a natural product evolution and also what giants like Coinbase are eager to do. They want to be your “Everything App”—saving, buying crypto, stocks, even participating in prediction markets—all within one account. This way, they can lock users into their ecosystem and prevent deposit and activity data from leaking out.

This is also why infrastructure remains crucial. Only by truly abstracting the underlying crypto components can DeFi trading, payments, and yield activities be integrated into a seamless experience, making users hardly aware of the underlying complexity.

Some of my colleagues have deep backgrounds in high-frequency trading, used to executing large-scale trades on CME or stock trading platforms with ultra-low latency systems. But I’m excited not just to continue trading, but to transfer this rigorous engineering and algorithm-driven decision-making into everyday real-world finance workflows.

Imagine a CFO managing cross-border funds, handling large amounts dispersed across different banks and involving multiple forex pairs. In the past, this required manual coordination, but in the future, with LLMs and high-performance public chains, systems could automatically perform large-scale algorithmic trading and fund allocation behind the scenes, earning more profit.

Abstracting “high-frequency trading” capabilities and applying them to various real-world workflows—that’s no longer just Wall Street’s domain but a way to optimize every penny of enterprise finance at incredible speed and scale. This is the truly promising new frontier of the future.