Stablecoins used to be a crypto convenience, a way to park dollars between trades without touching fiat. However, the industry has matured enough that BlackRock now treats them as foundational rails for the market.
In its 2026 Global Outlook, the BlackRock Investment Institute argued that stablecoins are widening beyond exchanges and becoming integrated into mainstream payment systems. It also said they could expand in cross-border transfers and day-to-day use in emerging markets.
That framing matters because it shifts the question investors ask, especially when it comes from a name as big as BlackRock.
The point here isn’t whether stablecoins are good for crypto. The question is whether they’re on track to become a settlement rail that sits beside, and sometimes inside, traditional finance.
If they do, which blockchains will end up acting like the base layer for final settlement, collateral, and tokenized cash?
BlackRock puts the stakes bluntly. “Stablecoins are no longer niche,” the report quotes Samara Cohen, BlackRock’s global head of market development.
They’re “becoming the bridge between traditional finance and digital liquidity.”
From trading chip to payments rail
Stablecoins began thriving on crypto volatility. Markets swing, banks close on weekends, and exchanges rely on a patchwork of fiat rails for redemptions.
Dollar-pegged tokens solved that operational problem by giving traders a 24/7 unit of account and settlement asset.
BlackRock’s emphasis is that stablecoins have now outgrown that niche. The firm said integration into mainstream payment systems and cross-border payments is a natural next step, especially where latency, fees, and correspondent banking friction remain stubbornly high.
One reason the timing feels right is regulatory. In the US, the GENIUS Act was signed into law on July 18, 2025, creating a federal framework for payment stablecoins, including reserve and disclosure requirements.
That kind of legal clarity doesn’t guarantee mass adoption. But it changes the risk calculus for banks, large merchants, and payment networks that have to answer to compliance teams and regulators.
The market’s scale is also no longer theoretical. Total stablecoin value stood around $298 billion as of Jan. 5, 2026, with USDT and USDC still dominating the stack.
BlackRock’s report, using CoinGecko data through Nov. 27, 2025, notes stablecoins hit record highs in market cap even as crypto prices fluctuated. It highlights their role as the system’s primary source of “dollar liquidity and on-chain stability.”
That combination of legal recognition and sheer size is why stablecoins have started to show up in places they never used to, like the back office of global payments.
Visa offered a concrete example in December 2025. The company said it had launched USDC settlement in the US, allowing issuer and acquirer partners to settle with Visa in Circle’s dollar stablecoin.
Visa said initial banking participants settled over Solana. It framed the move as a way to modernize its settlement layer with faster movement of funds, seven-day availability, and resilience across weekends and holidays.
Stablecoins are moving into the part of finance that’s usually invisible until it breaks: settlement.
Settlement is where the value accrues
If stablecoins are now effectively digital dollars, the next question is where those dollars live as the system scales.
As stablecoins move toward more complex uses, such as collateral, treasury management, tokenized money-market funds, and cross-border netting, the base layer matters more than marketing. That layer needs predictable finality, deep liquidity, robust tooling, and a governance and security model institutions can trust for decades, not just a cycle.
This is where Ethereum could step in.
Ethereum’s value proposition in 2026 isn’t that it’s the cheapest chain for sending a stablecoin. Plenty of networks compete there, and Visa’s Solana pilot is a reminder that high-throughput chains have a seat at the table.
The case for Ethereum is that it has become the anchor layer for an ecosystem that treats execution and settlement as separate functions.
Ethereum’s own documentation makes that explicit in the context of rollups, where Ethereum acts as the settlement layer that anchors security and provides objective finality if disputes occur on another chain.
So when users move fast and cheap on L2s, the base chain still plays referee. The more valuable the activity being settled, the more valuable the referee role becomes.
Tokenization is quietly steering institutions toward Ethereum
BlackRock’s stablecoin section is also a tokenization story. The report describes stablecoins as a “modest but meaningful step toward a tokenized financial system,” where digital dollars coexist with, and sometimes reshape, traditional channels of intermediation and policy transmission.
Tokenization turns that abstract idea into a balance-sheet reality. It means issuing a claim on a real-world asset, such as a Treasury bill fund, on a blockchain.
Stablecoins then serve as the cash leg for subscriptions, redemptions, and secondary-market trading.
On that front, Ethereum is still the center of gravity. RWA.xyz shows Ethereum hosting about $12.5 billion in tokenized real-world assets, roughly a 65% market share as of Jan. 5, 2026.
BlackRock itself helped build that gravitational pull. Its tokenized money-market fund, BUIDL, debuted on Ethereum and later expanded to multiple chains, including Solana and several 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 pattern is telling: start where liquidity, custody integrations, and smart contract standards are most mature, then extend outward as distribution channels develop.
JPMorgan has been moving in the same direction. The bank launched a tokenized money-market fund with shares represented by digital tokens on Ethereum.
It accepted subscriptions in cash or USDC and tied the push partly to the stablecoin regulatory shift that followed the GENIUS Act.
This suggests 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 finance.
Ethereum has become the default answer to that need, not because it wins every benchmark, but because it has become the settlement court where the most valuable cases are heard.
The bet isn’t risk-free
BlackRock’s outlook includes caution embedded in the opportunity. In emerging markets, it notes stablecoins could broaden dollar access while challenging monetary control if domestic currency use declines.
That’s a political economy problem, not a tech problem. It’s also the kind that can trigger restrictive policy responses in exactly the places where stablecoins have product-market fit.
There are also issuer risks. Stablecoins aren’t all the same, and market structure can turn on trust.
S&P Global Ratings downgraded its assessment of Tether’s reserves in November 2025, citing concerns about limited transparency. It was a reminder that the stability of the system can hinge on what sits behind the peg.
Ethereum also isn’t guaranteed to be the only settlement layer that matters. Visa’s USDC settlement work shows large players are willing to route stablecoin settlement over other chains when it fits their operational needs.
Circle positions USDC as natively supported across dozens of networks, a strategy that makes stablecoin liquidity portable and reduces dependence on any single chain.
But portability cuts 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 they can park real cash and real collateral on-chain without waking up to a governance surprise.
That’s why ETH is a likely wager on the settlement standard for tokenized dollars. If stablecoins are becoming what BlackRock says they are, a bridge between traditional finance and digital liquidity, the bridge still needs bedrock.
In the current architecture of the crypto market, Ethereum is the bedrock most institutions keep returning to.
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