Original Authors: Suvashree Ghosh, Matt Haldane

Original Translation: Saoirse, Foresight News

Not long ago, the crypto industry was shouting the slogan "blockchain, not Bitcoin," claiming that distributed ledger technology would surpass financial applications and completely reshape the internet. However, recent financing trends indicate that, in reality, cash remains king.

Since the onset of the Web3 and NFT craze in the early 2020s, the investment enthusiasm in the crypto industry has noticeably cooled. Yet there is one niche in the market that has bucked the trend, attracting increasing amounts of venture capital — stablecoin payments.

Stripe's acquisition of Bridge for $1.1 billion last year was an early sign that traditional financial institutions were starting to explore stablecoin payments. Subsequently, a batch of startups such as ARQ, KAST, and RedotPay secured new financing to build cross-border payment channels and stablecoin-based financial services. Mastercard's acquisition of BVNK for $1.8 billion last week further confirmed the market's strong interest in this sector.

"Startups related to stablecoins are currently one of the hottest areas for venture capital financing," said Rob Hadick, general partner at Dragonfly Capital. "Stablecoins have emerged from the entire crypto industry, becoming one of the few truly groundbreaking applications that have gained widespread real-world deployment."

According to Architect Partners, which focuses on annual reports of crypto financing, the total financing for crypto payment companies is expected to soar to $2.6 billion in 2025, surpassing the sum of the previous three years. Thanks to Mastercard's acquisition of BVNK, this figure is anticipated to continue rising this year.

Funding for crypto payment infrastructure: in 2025, the funding amounts for various companies exceeded the total of the previous three years

Meanwhile, overall private equity financing in the crypto industry increased from nearly $13 billion in 2024 to $20.4 billion in 2025, although it remains below the peak of $27.6 billion in 2022.

Total financing for cryptocurrency companies: the number of financing transactions in cryptocurrencies increased last year but still did not reach the peak of 2022.

Currently, the two most concentrated areas for private equity funding are "investment and trading infrastructure" and "brokerages and exchanges," both of which are financial applications. Payment infrastructure ranks third. In stark contrast, the blockchain gaming sector, once at the core of the Web3 and NFT craze, saw financing drop from $3.76 billion in 2022 (accounting for about 14% of total funding) and is no longer listed as an independent statistical category in 2025.

In fact, the total financing for various decentralized applications (Web3 functional layer) reached $5.2 billion in 2022, while the report for 2025 retained only consumer DApps, with financing of just $864 million.

Financing situation in various segments of cryptocurrency: the payment sector ranked among the top three sub-industries attracting funding in 2025

Stablecoins are building a more comprehensive financial infrastructure for blockchain. These tokens are typically pegged to the US dollar at a 1:1 ratio, with their value tied to underlying assets. Driven by the pro-crypto policies of the Trump administration, market enthusiasm for stablecoins reached unprecedented heights last year.

According to data from Artemis Analytics, total stablecoin transactions are projected to surge by 72% in 2025, reaching $33 trillion. The two largest stablecoins currently are Tether's USDT and Circle's USDC.

Circle's share price hit its largest decline ever on Tuesday as investors assessed potential adjustments in US stablecoin regulation and the impacts of intensified industry competition. Nevertheless, the core appeal of stablecoins remains clear: facilitating the efficient transfer of funds.

Cross-border payments still suffer from slow processes, high costs, and significant capital requirements. Despite years of development in fintech, cross-border transfers remain highly reliant on opening pre-funded accounts in different jurisdictions.

"Stablecoins have completely changed this landscape," said Prajit Nanu, co-founder and CEO of cross-border payment company Nium. "They allow value to flow in real-time globally without incurring the same level of capital efficiency loss, which is why investors see them as the core infrastructure of next-generation payments."

This industry still faces strong "gatekeepers." Large payment networks like Visa and Mastercard control access to payment terminals. Eric F. Risley, founder and managing partner of Architect Partners, noted in his report that the issue of channel distribution "is a major concern for every stablecoin and related payment company."

Trends in Binance's spot trading market share

As of February this year, Binance's share of Bitcoin spot trading had fallen to 27%, while its overall trading share dropped from 52% to 32%. The share of its most profitable derivatives business also plummeted to 34%.

Franklin Templeton partnered with Ondo Finance to launch ETF tokenized products that can be traded around the clock through crypto wallets, bypassing decades-old brokerage accounts and timed trading rules that have long governed fund investments.

Industry Voices

"The irony of this event taking place in Las Vegas is palpable," said Ben Johnson, head of client solutions at Morningstar, bluntly stating that the industry "has clearly crossed the red line between investment and gambling, leaving no room for retreat."

Originally created to simplify investing, ETFs have now become vehicles for America’s latest style of financial gambling. Bloomberg Intelligence data shows that among the 1,000 new funds issued last year, 36% were leveraged products or crypto-related funds.

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