Stablecoins are shifting from a crypto-native tool to a core part of the institutional market plumbing, according to a new cross-industry outlook report from Moody’s.
In the reportpublished Monday, the ratings agency said stablecoins handled about 87% more settlement volume in 2025 than the year before, reaching $9 trillion in activity based on industry estimates of onchain transactions, rather than purely bank-to-bank flows.
Moody’s said fiat-backed stablecoins and tokenized deposits are moving toward “digital cash” for liquidity management, collateral movements and settlements in an increasingly tokenized financial system.
Stablecoins can be connected to institutional rails
Moody’s placed stablecoins alongside tokenized bonds, funds and credit products as part of a broader convergence between traditional and digital finance.
Banks, asset managers and market infrastructure providers have piloted blockchain settlement networks, tokenization platforms and digital custody in 2025, with the aim of streamlining issuance, post-trade processes and intraday liquidity management.
The report estimates that, with all these initiatives, more than $300 billion could be invested in digital finance and infrastructure by 2030 as companies build the tracks for large-scale tokenization and programmable settlement.
Within that picture, stablecoins and tokenized deposits are increasingly acting as a settlement vehicle for cross-border payments, repos (short-term secured loans where one party sells securities and agrees to buy them back later at a higher price), and collateral transfers.
Moody’s noted that regulated institutions were using cash and U.S. Treasury-backed stablecoins to facilitate intraday movements between funds, credit pools and trading platforms in 2025, with trials at banks like Citigroup and Société Générale, among others.
JPM Coin is cited as an example of a deposit token model that integrates programmable payments and liquidity management into existing banking infrastructure, illustrating how “digital cash” layers can sit on top of traditional core systems.
Related: How US banks are quietly preparing for an onchain future
Regulations and risks for ‘digital cash’
Regulations are starting to catch up with this shift. The report highlighted the European Union’s Markets in Crypto-Assets Regulation (MiCA) framework, the US stablecoin and market structure proposals and licensing frameworks in Singapore, Hong Kong and the United Arab Emirates as evidence of a converging global approach to tokenization, custody and redemption rules.
In Europe, Société Générale-Forge’s EURCV and related initiatives are cited as examples of bank-issued products developed under the EU’s emerging stablecoin framework, while in the Gulf, banks and regulators are exploring UAE dirham-referenced payment tokens and broader digital money architectures.
Yet Moody’s emphasizes that the transformation is far from risk-free. As more value shifts to ‘digital rails’, the report warned that smart contract bugs, oracle errors, cyber-attacks on custodial systems and fragmentation across multiple blockchains could create new forms of operational and counterparty risk.
The agency argued that security, interoperability and governance will be as important as regulatory clarity if stablecoins are to function as reliable institutional settlement assets rather than as new sources of systemic vulnerability.
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