Stablecoins: crypto’s major institutional use case

For banks, fintechs and asset managers, stablecoins offer something simple: digital money that can move on-chain, around the clock.

What’s the strongest use case for institutional crypto adoption, besides tokenized assets?

One answer is stablecoins. They are fixing an all too familiar issue: money movement that is still too slow, too expensive, too dependent on market hours and restricted by heterogeneous banking rules and regulations of different countries.

Stablecoins give institutions a cash-like asset that can move on-chain crossing any border, settle quickly and interact with tokenized markets. That makes them useful for payments, treasury operations, collateral movement and settlement.

No wonder major banks are now exploring stablecoins, tokenized deposits and tokenized cash. The signal is becoming hard to ignore.

Why stablecoins matter to institutions

Stablecoins, such as USDC or USDT, are crypto assets designed to track the value of a fiat currency, usually the US dollar or euro.

Their role is practical. They give institutions a way to move cash-like value on blockchain rails without taking direct exposure to volatile crypto assets.

That matters because many financial processes still depend on systems that do not run continuously:

• bank transfers can be slow and require many manual steps
• cross-border payments can be expensive
• settlement can take time
• money transfers can be limited by operating hours and banking rules and regulations.

Stablecoins address this issue. They can move 24/7 across the globe, settle quickly and interact with smart contracts and tokenized assets.

This makes them one of the most useful bridges between traditional finance and DeFi.

Banks are no longer just watching

In 2026, major banks are no longer just observing stablecoins.

In Europe, the Qivalis euro stablecoin project has gained backing from 37 banks, including BNP Paribas, ING, UniCredit, ABN Amro and Rabobank, Financial Times reported. The project is designed as a euro-denominated stablecoin for use cases such as cross-border payments and atomic settlement.

In Canada, Bank of Montreal plans to launch a tokenized cash platform for institutional clients in the second half of 2026, pending regulatory approval. The platform is expected to support 24/7 secure fund transfers and tokenized settlement for areas such as margin trading, treasury operations and programmable finance.

Meanwhile, HSBC, the biggest lender in Europe and Hong Kong, recently said it plans to launch a Hong Kong dollar (HKD) denominated stablecoin in the second half of 2026.

These examples point in the same direction. Institutions are not only asking whether stablecoins can work. They are starting to build around them.

The institutional use case is not speculation

For retail crypto users, stablecoins often mean trading liquidity.

For institutions, the use case is broader.

Stablecoins can help with:

• cross-border payments;
• treasury movement;
• collateral transfers;
• settlement for tokenized assets;
• liquidity management;
• on-chain trading and DeFi access.

The institutional appeal is not about chasing crypto volatility. It is about making money movement faster, cheaper, more programmable and more available.

This is why stablecoins are especially relevant to tokenized assets. If stocks, bonds, funds and RWAs move on-chain, institutions also need a cash leg that can move on-chain.

You cannot build efficient tokenized markets if the asset leg runs on blockchain rails while the payment leg still depends on slow legacy systems.

Regulation is turning stablecoins into infrastructure

Stablecoins used to sit mostly outside traditional financial regulation. That is changing.

The very first crypto legislation passed in the US, Genius Act, was to regulate stablecoins. The EU’s MiCA framework gives stablecoin issuers clearer rules. Hong Kong has created a dedicated licensing regime. Canada is moving toward stablecoin regulation. Other jurisdictions are also designing frameworks for fiat-backed digital money.

This matters for institutions. Banks need clear rules before they can move at scale. Asset managers need certainty around settlement assets. Payment companies need defined compliance responsibilities.

Regulation does not remove all risk. Stablecoins still depend on reserves, redemption, issuer quality, custody, smart contracts and operational controls.

But regulated frameworks make institutional adoption easier to evaluate. They turn stablecoins from a crypto-native tool into something closer to financial market infrastructure.

What banks are really trying to solve

The stablecoin story is often described as a crypto story. But for banks, it is really a payments and settlement story.

Traditional finance works, but it has limits. It is fragmented across currencies, jurisdictions, intermediaries and operating hours. Moving money across borders can still be slow and expensive. Settlement can involve delays and counterparty risk.

Stablecoins offer a different model:

• faster settlement
• liquidity available outside market hours
• assets and payments in the same digital environment
• programmable workflows.

That is why stablecoins are one of the most credible crypto use cases for institutional adoption.

Where 1inch fits

But stablecoins need more than issuance. They need infrastructure that makes them usable. Once stablecoins are on-chain, institutions need to move them efficiently across assets, venues and networks. They need routing, execution, pricing data and access to liquidity.

That is where 1inch Business comes in, providing seamless APIs for routing and executing stablecoin swaps across the DeFi ecosystem. For institutional teams, fintechs and builders, 1inch Business offers APIs that can help integrate swaps, routing, token data and transaction flows into their own products.

This matters because stablecoins become more useful when they are connected. A stablecoin that can move, trade and settle across DeFi is not just a token. It becomes part of a working financial layer.

The role of infrastructure is to make that movement simple enough for institutions to build on.

The next phase of crypto adoption

The current phase of institutional crypto adoption looks nothing like a speculative boom. It’s about:

• better settlement
• better treasury movement
• better liquidity access
• better cross-border payment
• better cash rails for tokenized assets.

That is why stablecoins matter. They do not ask institutions to abandon traditional finance. They give traditional finance a way to use blockchain where it makes sense.

As banks in the US, Europe, Canada, Hong Kong and other markets move toward stablecoins and tokenized cash, the direction is clear: digital money is becoming part of institutional finance.

The next question is not whether stablecoins are useful. It is how quickly the infrastructure around them can make them easy to use.

Explore APIs offered on 1inch Business.

Disclaimer: This content is for general information purposes only and does not constitute financial, investment, tax or legal advice.