How Stablecoins Are Transforming Traditional Finance Payments

A new report analyzes five stablecoin payment networks, determining their ability to overcome new challenges. Generally, Tether- and Circle-focused projects self-select for different clusters of common traits.

Foresight Ventures also shared some exclusive commentary on this subject with BeInCrypto. For more concrete data on each project, consult the firm’s report.

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A New Stablecoin Report

The stablecoin market is growing to new heights, with many industry leaders predicting far greater accomplishments in the near future.

In this context, Foresight Ventures released a report on stablecoins’ potential, claiming that they could become “the backbone of a global payments rail.”

According to this report, two main factors are converging to boost the stablecoin market. Web3 firms are trying to integrate with TradFi to seize corporate inflows, while financial institutions are looking to blockchain for new functionality and use cases.

Therefore, the market is lifting these tokens up from both directions.

Still, the report is quite clear that not all stablecoins are created equal. The technology has hit certain practical limitations under massive new stress tests, and developers are finding different methods to innovate.

Alice Li, Investment Partner at Foresight Ventures, exclusively shared some insights with BeInCrypto:

“The market is recognizing that general-purpose blockchains may not be optimal for specific use cases. What makes this space particularly interesting is how different projects are approaching the same problem from different angles. It’s not yet clear which approach will prove most successful,” Li claimed.

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Differences Between USDT and USDC Approaches

Some of these flaws, such as inconsistent gas fees and slow transaction times, are particularly concentrated in general-purpose blockchains like Ethereum. Foresight’s report examined five new stablecoin projects: Plasma, Stable, Codex, Noble, and 1Money, to determine their successes and failures.

Without getting too lost in the minutiae, this report details some intriguing general trends in stablecoins. Essentially, regardless of the L1 blockchain infrastructure, users are going to use one of the major existing tokens.

These firms will therefore need to cater to assets like USDT or USDC, and most exhibit a strong preference.

The Tether-focused networks broadly focus on DeFi-native economic infrastructure, targeting retail users, while Circle-based projects prioritize institutional capital and regulatory compliance.

1Money, which does not align with either of these models, strives for corporate adoption even more than USDC-oriented projects.

The report assesses all five of these stablecoin settlement layers comprehensively, and interested readers should examine the raw data for themselves.

For now, it’s difficult to say which of these projects will have the most longevity, but there’s a broad spectrum of variation between them.