Editor: Wu Blockchain
TL;DR:
- Overall Funding Cools Down: In Q1 2026, Crypto VC funding decreased by approximately 50% quarter-on-quarter, with capital further concentrating on mature projects that already have customers, revenue, and transaction scale.
- Stablecoin Payments Buck the Trend: Projects like Rain, OpenFX, RedotPay, Mesh, Conduit have successively secured large funding rounds, covering areas such as bank cards, cross-border payments, FX liquidity, wallets, bank connectivity, and clearing.
- VCs Are Betting on Infrastructure: Stablecoins can provide 24/7 cross-border settlement, and related companies can generate revenue through fees, FX spreads, card services, and API services, forming a relatively clear monetization model.
- The Hype Warrants Caution: On-chain stablecoin transaction volume does not equal real payment volume; funding is also concentrated in a few top projects. Compliance, fiat on/off-ramps, local bank relationships, and homogenized competition remain major challenges.
- Future Opportunities: Capital may continue flowing into cross-border B2B payments, stablecoin bank cards, bank-stablecoin connectivity, multi-chain payment orchestration, and AI Agent payments.
In the first quarter of 2026, venture funding in the crypto industry cooled significantly. Data from Galaxy Research shows that Crypto VCs deployed approximately $4 billion across around 355 deals, representing a roughly 50% decline in funding amount and a 16% drop in deal count compared to the previous quarter. During the same period, the number of newly established crypto venture funds fell to its lowest level since Q3 2020.
However, this cooling is not uniform across all projects. Galaxy Research notes that the decline in total funding is primarily due to a decrease in ultra-large late-stage rounds, while seed and early-stage funding continues. Meanwhile, 57% of capital flowed to later-stage projects, indicating that investors are becoming more cautious: they prefer to fund companies that already have customers, revenue, and payment volume over those reliant on tokens and market sentiment.
Strictly speaking, stablecoin payments are not yet the sector receiving the most Crypto VC funding. In Q1 2026, trading, investing, lending, and exchange-related projects collectively received about $2.6 billion, still dominating. A more accurate positioning for stablecoin payments is that, amid overall funding difficulties, it is one of the few directions that continues to see large, successive funding rounds.
Stablecoins Evolving from Trading Tools to Payment Infrastructure
VC interest in stablecoin payments is first built upon the continued expansion of stablecoins themselves.
Research from the Federal Reserve in April 2026 shows that as of April 6th, the total market capitalization of stablecoins was approximately $317 billion, an increase of over 50% from the beginning of 2025. Data from Visa and Artemis, using adjusted methodologies, indicates that adjusted stablecoin transaction volume over the past 12 months was about $10.2 trillion, a 63% year-on-year increase. However, about 36% of this in 2025 came from centralized exchange deposits and withdrawals, so this figure cannot be directly equated with payments for goods and services.
In the past, stablecoins were primarily used for moving funds between exchanges or as temporary safe-haven assets during crypto market volatility. Now, startups are attempting to connect this on-chain liquidity to the real-world financial system, including cross-border B2B payments, remittances, payroll, corporate treasury management, card spending, bank accounts, and foreign exchange settlement.
This has also changed the funding structure for stablecoin projects. Investors are no longer just funding stablecoin issuers; they are looking for opportunities along the entire payment chain: underlying payment blockchains, stablecoin issuance and orchestration, wallets, on/off-ramps, FX liquidity, bank cards, bank connectivity, clearing, and final redemption have all become separate areas for startups.
Overview of Recent Stablecoin Payment-Related Funding
The following projects are not a complete industry survey but representative funding cases since 2025. They cover different segments of the stablecoin payment chain and therefore cannot be simply categorized under the same business model.
From these projects, it's clear that what investors refer to as "stablecoin payments" actually encompasses several distinct directions.
Rain, RedotPay, and Félix Pago are closer to the application and distribution layer, directly addressing how users remit, hold, and spend stablecoins; OpenFX, Conduit, and Noah handle cross-border payments, FX liquidity, and fund settlement between different countries; Mesh and Crossmint provide wallet and payment orchestration tools; Stablecore and Ubyx connect banks, issuers, and stablecoin clearing systems; projects like Plasma attempt to redesign the stablecoin payment environment from the underlying blockchain.
Therefore, this round of capital is not simply betting on a particular stablecoin, but on the entire set of infrastructure needs that arise as stablecoins become payment tools.
Capital Favors Projects with Existing Business Data
Unlike previous Crypto projects that primarily told stories about the future, stablecoin payment companies securing large funding rounds recently commonly disclose transaction volume, customer numbers, or revenue data.
Rain completed a $250 million Series C round in January 2026, just about 4 months after its Series B and about 10 months after its Series A. The company stated that its active card count grew 30x in one year, with annualized payment volume growing 38x, and it currently processes approximately $3 billion in annualized transaction volume for over 200 partners.
OpenFX completed a $23 million seed round in 2025 and raised $94 million about 10 months later. The company told Reuters that its annualized payment volume had grown from $4 billion a year ago to over $45 billion, with over 98% of transactions completing within 60 minutes, compared to the 2-5 business days typically required for traditional FX settlement.
RedotPay claims that as of November 2025, it had over 6 million registered users across more than 100 markets, with annualized payment volume exceeding $10 billion, annualized revenue over $150 million, and profitability.
Most of this data comes from company disclosures, not necessarily audited, and the calculation methodologies for "payment volume," "transaction volume," and "annualized revenue" vary among companies, preventing direct comparisons. However, they still reflect a clear shift: stablecoin payment projects are attempting to prove their value using metrics from traditional fintech companies, rather than relying solely on on-chain address counts, token prices, and community size to tell a growth story.
Why Are Stablecoin Payments Attracting VC Attention?
1. Cross-border Payments Have Real and Long-Standing Efficiency Issues
Traditional cross-border payments often involve the remitting bank, correspondent banks, clearing networks, the receiving bank, and local payment institutions. Different institutions have their own operating hours, ledgers, and compliance procedures, leading to funds potentially taking days to settle.
If a payment company wants to offer instant transfers to multiple countries, it also needs to pre-fund accounts at local banks. These funds, although not actively used, must remain idle in different countries to ensure users can withdraw promptly, incurring high capital costs.
Stablecoins don't automatically solve all problems, but they can provide a unified settlement asset that operates 24/7. Payment companies can first move funds on-chain using stablecoins, then have local partners convert the stablecoins into local currency. For cross-border B2B payments, remittances, global payroll, and internal corporate fund transfers, shortening settlement time and reducing pre-funded amounts have direct commercial value.
2. Payment Infrastructure Has Relatively Clear Revenue Models
Stablecoin payment companies typically don't rely on token appreciation for revenue but charge transaction fees, FX spreads, card issuance fees, account management fees, API subscription fees, or on/off-ramp fees.
These revenue models aren't new; they are essentially similar to traditional payment service providers and fintech companies. The difference is that stablecoins are used as backend settlement tools to reduce friction between different countries, currencies, and financial institutions.
For VCs, this means projects can be valued using traditional metrics like payment volume, net revenue, gross margin, customer retention, and cost per transaction. Compared to projects reliant on market cycles and token prices, their business models are easier to assess and explain to traditional financial investors.
3. Stablecoins Are Becoming Backend Tools Users Don't Need to Perceive
The early typical path for stablecoin payments was: users buy stablecoins, transfer them to a wallet, then find merchants accepting cryptocurrency to spend. This model required users to understand blockchain, wallet addresses, networks, and gas fees, presenting a high barrier to entry.
Projects receiving funding recently aim to hide these steps. Félix Pago users only need to initiate a remittance within WhatsApp; Rain and RedotPay connect stablecoins to bank cards; Mesh allows users to pay with one crypto asset while merchants receive another stablecoin; OpenFX's clients are primarily fintech and remittance companies, where end-users may not even know stablecoins are used in the settlement process.
This means VCs are not necessarily betting on consumers actively choosing to "pay with stablecoins," but on stablecoins replacing part of the traditional payment and clearing process in the background. What users see may still be bank cards, bank accounts, local currency, or messaging apps.
4. Regulatory Changes Have Expanded the Potential Client Base
Regulatory uncertainty previously limited banks and large payment institutions from accessing stablecoins. In 2025, the US passed the GENIUS Act, establishing a federal regulatory framework for payment stablecoins; the OCC also confirmed that US national banks and federal savings associations can engage in certain stablecoin, digital asset custody, and blockchain network activities, and removed some additional regulatory "non-objection" procedures.
Regulatory requirements increase costs for reserves, audits, AML, and licensing but also make it easier for banks, businesses, and payment companies to determine which activities are permissible. For companies like Stablecore, Ubyx, and Rain that serve institutional clients, regulatory clarity means potential clients expand from Crypto companies to banks, fintech platforms, and traditional enterprises.
This also explains why recent investor lists include not only Crypto VCs like Dragonfly, Galaxy Ventures, and Paradigm but also traditional tech or fintech investment firms like ICONIQ, Accel, Lightspeed, QED Investors, and Norwest.
5. Acquisitions by Traditional Payment Companies Provide an Exit Expectation
In February 2025, Stripe completed the acquisition of stablecoin infrastructure company Bridge, reportedly for around $1.1 billion. Bridge helps businesses issue, manage, and transfer stablecoins, and Stripe subsequently integrated these capabilities into its own payment products.
In March 2026, Mastercard announced its intention to acquire stablecoin infrastructure company BVNK for up to $1.8 billion, including $300 million in contingent payments. BVNK's business connects stablecoins, fiat, banks, and different blockchains, providing cross-border payment and settlement services for businesses.
For VCs, these two deals are significant. Exit paths for stablecoin payment companies are no longer limited to token issuance or waiting for an IPO; they may also be acquired by card networks, payment companies, banks, and large fintech platforms.
Simultaneously, this indicates that licenses, local bank relationships, and mature client networks hold considerable value. Traditional payment companies can develop blockchain technology themselves, but building compliance systems and liquidity networks in multiple countries could take years; acquiring companies that have already done this is faster.
Why Might the Hype Be Overestimated?
Stablecoin payments present clear opportunities, but the current funding narrative also has elements that may be amplified.
1. Stablecoin Transaction Volume Does Not Equal Real Payment Volume
On-chain stablecoin transactions include exchange fund movements, market making, arbitrage, DeFi, smart contract interactions, institutional fund transfers, and regular payments. Even after excluding some bot and repeated transactions, the remainder cannot be wholly considered payments for goods and services.
Visa has noted that as of March 2025, retail-sized transactions accounted for less than 1% of adjusted stablecoin transaction volume over the previous 12 months.
Therefore, stablecoin on-chain transaction volume surpassing card network volumes does not directly prove its payment business has surpassed Visa or Mastercard. The two measure different types of activities and cannot be simply compared.
2. Funding Hype Concentrated in a Few Projects
Rain's single funding round reached $250 million, RedotPay raised a cumulative $194 million in 2025, and OpenFX raised $94 million in one round. A few large deals can significantly inflate the sector's total funding but do not mean all stablecoin payment startups easily secure capital.
Rain, RedotPay, and OpenFX all disclosed rapidly growing business data; investors are betting on companies that have already achieved scale. Early-stage projects lacking licenses, local payment channels, and actual clients still face a difficult funding environment.
In other words, this looks more like capital concentrating towards leading projects, rather than a comprehensive boom in stablecoin payment startups.
3. Basic Services May Rapidly Become Homogenized
The technical barriers for wallets, stablecoin on/off-ramps, cross-border transfers, and payment APIs are lowering. More companies can offer similar functionalities, and banks, exchanges, stablecoin issuers, and traditional payment companies are also building their own products.
If multiple platforms can handle USDC or USDT transfers, merely providing an on-chain payment interface is unlikely to form a long-term moat. Projects will ultimately still need to compete on licenses, local banking channels, FX quotes, payment success rates, risk control, customer service, and cost.
As competition increases, transaction fees and FX spreads may decline. Even if payment volume continues to grow, it may not automatically translate into high profits.
4. Global Expansion Still Requires Market-by-Market Execution
Blockchains can operate cross-border, but bank accounts, licenses, and fiat cannot automatically cross borders. Stablecoin payment companies entering a new market still need to find local banks, payment institutions, and liquidity providers, and comply with local KYC, AML, sanctions screening, data, and consumer protection requirements.
If a local bank stops cooperation or on/off-ramp channels encounter issues, even if on-chain funds have arrived, they cannot be smoothly converted into the fiat currency users need. Therefore, stablecoins primarily address the intermediate settlement环节, not completely eliminating the traditional financial system.
5. Traditional Financial Institutions Are Both Clients and Competitors
Banks and card networks currently invest in or acquire stablecoin infrastructure companies because they need to quickly acquire these capabilities. However, as technology and regulatory frameworks mature, these institutions may also build systems internally and integrate stablecoin capabilities into existing products.
Stripe, Visa, Mastercard, PayPal, and large banks possess merchants, accounts, brand recognition, and regulatory resources. Startups may become their suppliers or acquisition targets, or may be relegated to lower-margin backend service segments.
Where Will the Next Phase of Investment Go?
Recent funding indicates the focus is shifting from "issuing more stablecoins" to "getting stablecoins actually into bank, business, and user accounts."
In the near future, the following directions may continue to attract attention:
First, cross-border B2B payments. Compared to consumer spending, corporate cross-border payments involve larger amounts, are more sensitive to settlement speed, capital lock-up, and FX costs, and are more willing to pay for efficiency gains.
Second, connectivity between banks and stablecoins. The opportunity represented by companies like Stablecore and Ubyx is enabling banks to receive, send, clear, and redeem stablecoins from different issuers and across different blockchains.
Third, stablecoin bank cards and local payments. Users don't need to find merchants accepting stablecoins but can spend through existing card and acquirer networks. The successive funding for Rain and RedotPay shows this remains one of the most direct paths for stablecoins to enter daily payments.
Fourth, orchestration layers for multiple stablecoins and blockchains. Businesses typically don't want to separately integrate with USDT, USDC, different blockchains, and various country on/off-ramp services; platforms that can uniformly handle asset selection, routing, fees, compliance, and exchange may attract more institutional clients.
Fifth, AI Agent payments. Processes like CAPTCHAs, card verification, and manual authorization in traditional payment systems are often not designed for AI Agents; stablecoin wallets and programmable payments may offer new settlement methods. However, this direction currently focuses more on infrastructure development and expectations; real payment demand and revenue scale require further validation.
Conclusion
VC interest in stablecoin payments does not mean the crypto funding winter is over, nor that stablecoins have widely replaced traditional payments.
More accurately, as funding conditions tighten, investors have begun seeking projects that can operate independently of token prices, solve real financial problems, and generate recurring revenue. Stablecoins provide a 24/7, programmable global settlement asset, and the opportunity for startups lies in bridging the connection between stablecoins and bank accounts, FX markets, bank cards, local currencies, and compliance systems.
In the next phase, what determines a project's value will no longer be just funding size and on-chain transaction volume, but how much of that represents real customer payments, how much net revenue it generates, how many compliant markets it enters, and whether it can remain profitable after deducting liquidity, channel, and compliance costs.
VCs are currently not betting on a particular stablecoin necessarily winning, but rather that as stablecoins enter the real-world financial system, there remain key infrastructure components to be built and perfected.
