The winners and losers of Stablecoins, according to BofA

Stablecoins are rapidly gaining traction as a payments rail, projected to reach nearly $1 trillion in transaction volume by July 2025, compelling traditional financial firms and fintechs to adapt to faster, cheaper, 24/7 money movement. This shift benefits early movers like PayPal, Block, and SoFi, while incumbents such as Visa and Mastercard are integrating stablecoin services as infrastructure. However, traditional FX providers and B2B payment firms like Corpay face potential disruption, underscoring the critical need for all players to integrate stablecoins to remain competitive in the evolving payments landscape.

Analysis

The payments landscape is undergoing a significant shift with the ascent of stablecoins, which are projected to handle a transaction volume nearing $1 trillion by July 2025. According to Bank of America analysts, this trend is creating a clear divergence in prospects across the financial technology sector. Fintechs with early and aggressive adoption strategies, such as PayPal (PYPL) with its PYUSD stablecoin and crypto checkout services, and Block (SQ) with its deep integration of digital assets into Cash App and Square, are positioned as primary beneficiaries. SoFi (SOFI) is also highlighted as a potential winner due to the flexibility afforded by its banking license to issue its own stablecoin. In contrast, incumbent payment networks like Visa (V) and Mastercard (MA) are adapting by positioning themselves as infrastructure providers, embedding stablecoin services into their existing rails rather than competing with them. American Express (AXP) is taking a more cautious exploratory approach, given its lower exposure to foreign exchange revenue. The primary entities at risk are those heavily reliant on traditional cross-border B2B payments, notably Corpay (CPAY), which could face margin pressure. However, analysts suggest this near-term risk is limited by Corpay's own defensive partnerships and the persistent need for stablecoin-to-fiat conversion, which remains a key value-add for FX providers.

Key Decisions for Investors

• Investors should consider the strategic positioning of fintechs like PayPal and Block, as their early-mover advantages and deep integration of stablecoin functionalities present a significant growth opportunity in the evolving payments ecosystem.
• It is prudent to monitor the execution of incumbent networks like Visa and Mastercard; their ability to successfully pivot from competitors to essential infrastructure providers for this new payment rail will be critical to sustaining their long-term network value.
• Exercise caution with firms highly exposed to traditional cross-border payment flows, like Corpay, and evaluate the effectiveness of their mitigating strategies against the tangible pace of stablecoin adoption in the B2B market.