Stablecoins and Payments: The Competition Shock Is Here

What the IMF paper actually measured

The IMF paper “Stablecoins and the Future of Payments: Evidence from Financial Markets” (Working Paper 2026/052), published on March 20, 2026, did something rare in the stablecoin debate: it asked markets, not pundits. The authors used high-frequency stock-price moves around legislative milestones in the United States to estimate how investors revalued listed payment incumbents when pro-stablecoin laws advanced.

The headline result is striking. Pro-stablecoin U.S. legislation reduced the market value of listed incumbent payment firms by roughly 18 percent, equivalent to about $300 billion. The paper notes that the impact is larger than other recent pro-competitive regulatory shocks the authors compared against. It is also asymmetric: the hit was proportionately larger for incumbents focused on cross-border payments, smaller for firms protected by deep network effects, and smaller again for incumbents that already offered crypto-related services.

That asymmetry is the most useful part of the result. Markets are not betting that stablecoins replace every payment rail. They are pricing a targeted competitive shock concentrated in segments where incumbent margins depend on slow, expensive settlement.

Why the GENIUS Act changed the conversation

The legislation behind the repricing is the GENIUS Act, signed into law on July 18, 2025. It defines payment stablecoins as a regulated payment instrument rather than a security or commodity, restricts permitted issuers, and requires reserves backed by safe assets such as deposits at depository institutions, short-term U.S. Treasury securities, or balances at a Federal Reserve Bank.

The Act also opens a pathway for foreign issuers to offer stablecoins in the U.S. through digital asset service providers, subject to a Treasury determination that their home jurisdiction has comparable rules. The Office of the Comptroller of the Currency issued its Notice of Proposed Rulemaking on the GENIUS Act in early 2026, and the effective date is the earlier of 18 months after enactment or 120 days after final implementing regulations.

For markets, the regulatory perimeter mattered as much as the asset class. Once stablecoins moved out of “crypto compliance” and into “payment instrument,” banks, networks, and fintechs had to model them as a competitive product, not a sideshow. That is the moment captured in the IMF paper.

Cross-border is where the margin pressure shows up first

The Federal Reserve’s March 30, 2026 FEDS Note on payment stablecoins and cross-border payments reached a parallel conclusion: the clearest near-term use case for stablecoins is cross-border B2B, treasury, and remittance flows where settlement still takes days and involves multiple intermediaries. EY estimates referenced in industry analyses suggest stablecoins could capture between 5 and 10 percent of cross-border payments by 2030, equivalent to roughly $2.1 trillion to $4.2 trillion of flow.

Movement in the institutional plumbing supports the estimate. JPMorgan Chase has expanded its deposit token offering to institutional clients on a privacy-enabled public blockchain for global corporate transactions. Bank of New York is offering tokenised deposits to clients to improve collateral and margin workflows. Smaller banks are working through consortia to issue USD stablecoins to compete with non-bank payment firms in remittance and small-business merchant settlement.

That is the practical version of what the IMF paper found in the equity market. Stablecoins compress the most painful cross-border frictions: correspondent fees, FX spreads, fragmented compliance, and daylight settlement windows. Even a partial reduction in cost or timing changes pricing power on supplier payments, marketplace payouts, international payroll, and remittance corridors.

The risk for incumbents is segment repricing, not extinction

The paper’s framing matters for how incumbent payment firms should plan. The risk is not that all payments migrate on-chain by 2030. The risk is that the most profitable cross-border layers reprice once large merchants, platforms, and treasuries have a credible alternative. Domestic checkout networks with strong merchant lock-in and consumer trust are more insulated. Remittance and B2B specialists are more exposed.

For policymakers, the implication is that stablecoins are now part of payments-market design. Reserve quality, redemption rights, supervision of foreign issuers, interoperability with bank rails, and consumer protection have moved from niche crypto compliance into mainstream financial market structure. The IMF’s follow-up paper “Making Stablecoins Stable” (Working Paper 2026/074, April 2026) extends this analysis to reserve-design and run-risk questions, which the GENIUS Act partially but not fully resolves.

For finance leaders outside the United States, the practical reading is that competitive pressure will arrive through cross-border partners and customers before it arrives through domestic regulation. Treasury teams that wait for local rules will be price-takers when their international counterparties move first.

What Finance Leaders and Payment Firms Should Do Now

The IMF’s findings translate into three specific actions — not wait-and-see positions. Each is calibrated to the segment most exposed to stablecoin competition, not the theoretical maximum disruption scenario.

1. Map Your Cross-Border Revenue Exposure Before Customers Do

The IMF paper’s core finding — that the equity hit was asymmetrically larger for cross-border specialists — provides a diagnostic tool. Finance and treasury leaders should identify what share of their revenue, margin, or fee income depends on corridors where settlement is still slow, expensive, or multi-hop. The relevant segments are cross-border B2B supplier payments, international payroll and freelance payouts, remittance corridors, and multi-currency treasury management. EY’s estimate that stablecoins could handle 5–10% of cross-border flows by 2030 (roughly $2.1–4.2 trillion) is not a baseline — it is a lower bound for the corridors with the highest friction. Any organization generating more than 20% of cross-border revenue from corridors where stablecoin settlement is technically feasible and where large counterparties are already testing alternatives (JPMorgan’s deposit token, Bank of New York’s tokenized deposits) should treat the repricing risk as a near-term planning input, not a medium-term scenario.

2. Test Partnership and Interoperability Options Before Customers Switch

The competitive response to stablecoin settlement is not necessarily to launch a stablecoin product — it is to maintain pricing relevance in the corridors under pressure. JPMorgan Chase and Bank of New York’s moves into deposit tokens show that incumbent banks can participate in on-chain settlement without abandoning their regulatory status or their existing client relationships. For smaller payment firms and regional banks, the practical option is partnership: integrating with a licensed stablecoin issuer or settlement network as a downstream distribution partner, rather than issuing independently. The GENIUS Act’s framework for licensed payment stablecoins creates a clear partnership structure — a licensed issuer with compliant reserves and a bank or payment firm as the payout and customer-facing layer. Organizations that test these integrations in 2026, even at small scale in one or two corridors, build the operational knowledge needed to respond quickly when large clients ask for on-chain settlement options.

3. Engage the Reserve-Design Debate Through Industry Bodies

The IMF’s follow-up paper “Making Stablecoins Stable” (Working Paper 2026/074, April 2026) identifies reserve design and run-risk as the unresolved technical questions that the GENIUS Act partially addresses. For payment firms and banks, the reserve-design debate is not academic — it determines which stablecoin issuers are safe counterparties and which carry systemic risk in a stress scenario. Organizations with membership in BIS working groups, FSB technical committees, or national banking associations should actively contribute to reserve-standard discussions in 2026 while the regulatory architecture is still being built. The window to influence reserve requirements, interoperability standards, and foreign-issuer certification criteria is open now; once the regulatory structure hardens around the GENIUS Act framework, the standards will be set by the early participants. Payment firms that engage early can shape standards that favor their existing infrastructure and client relationships rather than adapting to standards designed around competitors’ models.