Original authors: Suvashree Ghosh, Matt Haldane

Original translation: Saoirse, Foresight News

Not long ago, the cryptocurrency industry was loudly proclaiming "blockchain, not Bitcoin," claiming that distributed ledger technology would surpass financial applications and completely reshape the internet. However, recent funding trends indicate that in the real world, cash still reigns supreme.

Since the early 2020s, after the Web3 and NFT craze subsided, investment enthusiasm in the cryptocurrency industry has noticeably cooled. However, one niche sector in the market has gone against the trend and attracted increasing amounts of venture capital — stablecoin payments.

Stripe's acquisition of Bridge for $1.1 billion last year was an early signal of traditional financial institutions starting to position themselves in the stablecoin payment sector. Since then, a number of startups like ARQ, KAST, and RedotPay have received new funding 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 strong interest in this market segment.

"Startups related to stablecoins are almost the hottest area in current venture capital funding," said Rob Hadick, managing partner at Dragonfly Capital. "Stablecoins have emerged independently from the broader cryptocurrency industry and have become one of the few truly groundbreaking applications that are widely recognized in real-world scenarios."

According to Architect Partners, which focuses on annual reports on crypto financing, total funding for cryptocurrency payment companies soared to $2.6 billion in 2025, exceeding the total of the previous three years combined. Following Mastercard's acquisition of BVNK, this number is expected to continue climbing this year.

Funding for cryptocurrency payment infrastructure: Funding amounts exceeding total of the previous three years in 2025

Meanwhile, overall private equity financing in the cryptocurrency industry has risen from nearly $13 billion in 2024 to $20.4 billion in 2025, but it is still lower than the peak of $27.6 billion in 2022.

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

Currently, the two sectors with the most concentrated private equity funding are "investment and trading infrastructure" and "brokerage and exchanges," both of which are financial application businesses. Payment infrastructure ranks third. In stark contrast, the gaming sector, which was at the core of the Web3 and NFT craze, saw funding drop from $3.76 billion in 2022 (about 14% of total funding) to no longer being listed as an independent statistical category in 2025.

In fact, various decentralized applications (Web3 functional layer) raised a total of $5.2 billion in funding in 2022; whereas in the 2025 report, only consumer-oriented DApps were retained, with funding of only $864 million.

Funding situation in various segments of cryptocurrency: The payment sector ranks 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 value tied to underlying assets. Driven by the pro-crypto policies of the Trump administration, the market enthusiasm for stablecoins reached unprecedented heights last year.

According to Artemis Analytics, the total transaction volume for stablecoins is expected to surge by 72% to $33 trillion in 2025. The two largest stablecoins by market capitalization are Tether's USDT and Circle's USDC.

Circle's stock price hit its largest single-day drop ever on Tuesday as investors assessed the potential adjustments to US stablecoin regulations and the impacts of increased industry competition. However, the core appeal of stablecoins remains clear: to transfer funds as efficiently as possible.

Cross-border payments have remained slow, costly, and capital-intensive to this day. Despite the years of advancement in fintech, cross-border transfers still heavily rely on maintaining 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 around the globe without incurring the same level of capital efficiency loss, which is why investors view them as the core infrastructure of the next generation of payments."

This industry still has powerful "gatekeepers." Large payment networks like Visa and Mastercard hold the access rights to payment terminals. Eric F. Risley, founder and managing partner of Architect Partners, wrote in the report that channel distribution issues "are a big headache for every stablecoin and related payment company."

Binance spot trading market share trend chart

As of February this year, Binance's share in Bitcoin spot trading has dropped to 27%, while its overall trading share has decreased from 52% to 32%. Its most profitable derivatives business share has also significantly decreased to 34%.

Franklin Templeton has partnered with Ondo Finance to launch an ETF tokenization product that can be traded around the clock through cryptocurrency wallets, bypassing the brokerage accounts and time-limited trading rules that have relied on for decades.

Industry Voices

"The irony of this event being held in Las Vegas is striking," said Ben Johnson, director of client solutions at Morningstar. He bluntly stated that this industry "has clearly crossed the line between investment and gambling, with no room for maneuver."

Originally designed to simplify investing, ETFs have now become a vehicle for America's latest form 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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