Programmable Money: How Stablecoins Are Transforming Global B2B Payments

William Blair financial technology analyst Andrew Jeffrey discusses how stablecoins, regulatory clarity, and new payment rails are transforming global B2B transactions.

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Podcast Transcript

00:21 Chris

Hi, everybody. Welcome back to William Blair Thinking Presents. Today is Monday, November 17th, 2025.

I'm joined by Andrew Jeffrey. He is a William Blair equity research analyst specializing in financial technology and payments. Andrew, thank you for joining us.

00:37 Andrew

Thanks for having me.

00:39 Chris

So, we're diving into your latest industry report. It's called “Programmable Money: Stablecoins Are the Future of Cross-Border Commerce.” It explores how stablecoins are poised to revolutionize global B2B payments, you know, why regulatory clarity is a game changer, and then what this means for the future of money movement. I thought you could start by giving us a high-level overview of what stablecoins are and why they matter right now.

01:04 Andrew

Sure, happy to. So, stablecoins are, really in this context, fat backed digital money. So, in other words, when you consider payment tokens, which is really the focus of this report, payment tokens like USDC are backed one for one by U.S. treasuries. And, as a consequence, they become digital money or tokenized money, you might think about that way. They are instantly and entirely fungible, between fiat and tokenized money, which makes them ideal for cross-border money movement. And, they are also, now regulated, as you mentioned, Chris, more formally by the Genius Act, which sets forth the parameters under which stablecoins can be issued and used. And, unlike other stablecoins like USDT, which is the largest global stablecoin with about $170 billion market cap, which is not backed entirely by U.S. dollars, that's sort of a hybrid coin. U.S. Genius Act coins must be backed one from one by U.S. treasuries.

Then, the third category of stablecoins would be deposit tokens, which offer all of the functionality of payment tokens but are used generally within banks closed ecosystems. So, you can imagine for money movement between financial institutions or between national institutions and corporates, rather than in the public open market as USDC is intended for use.

02:59 Chris

All right, so the report argues that, you know, stablecoins will replace traditional cross-border payment rails, especially for B2B transactions. What are the main advantages of stablecoins over the current fiat-based system?

03:04 Andrew

I think simply described it's better, cheaper, faster. So, if you think about the current state of cross-border commerce, fiat currency is expensive to use for commerce because there are embedded FX costs, because the ecosystem participants, namely correspondent banks and SWIFT, which is the primary cross-border messaging intermediary, have antiquated technology, antiquated messaging infrastructure, and, wind up, extracting a lot of value from the participants in a cross-border transaction.

In addition, the fiat cross-border commerce is generally manual and not programmatic. In other words, it needs, you know, the contracts, the governor, the agreements that govern fiat cross-border commerce are very manual and still very much, you know, need to be agreed to by two parties, sort of, you know, in a sense that there's always a room for error, or disagreement, or misunderstanding.

So, stablecoins, because they eliminate much of the cross-border liquidity or cross currency liquidity challenges, and this is especially true for thinner FX markets, unlike in U.S. to euro, for example, U.S. dollar to euro, they necessarily have lower FX fees. They have lower overall transaction fees. Transactions are settled in near real time, whereas fiat transactions can take the days in some cases to settle. They're always on, so they're not susceptible to or reliant on, sort of, bankers’ hours, when we think about them for transactions.

And, I think most importantly, perhaps, and the cost savings over traditional fiat B2B are meaningful, 90%, as we discussed in reports or somewhere in the neighborhood. But, I think even more importantly, they're programable.

And what this means is that the terms of an agreement between two parties are set immutably at the time a transaction is initiated. In fact, you can have certain clearing conditions, for example, you might set up a smart contract that dictates that a payment is made only at a certain point of progress within a contract, a certain point of fulfillment. The ability to set these transaction rules, sort of, set and forget these transaction rules, and allow commerce to take place in a previously agreed upon immutable way on the blockchain via smart contracts is a dramatic improvement over fiat currency. And, I think that's going to be, really, the game changer for cross-border commerce.

05:51 Chris

Got it. We talked a little bit at the very top about regulation, but it's been a sticking point for stablecoin adoption, and the report highlights the Genius Act as the turning point. So, can you walk us through what the Genius Act means for stablecoins in the broader payments ecosystem?

06:08 Andrew

Yeah. So, I think what we'd heard in talking to a number of public companies in this industry and around this industry is that despite the benefits of stablecoins, which I just enumerated, the lack of regulatory clarity was creating, effectively, a tax on the use of stablecoins. Somewhere in the neighborhood of 5% to 10% and in some cases higher. Just the lack of understanding of how regulatory rules would be applied. And, just the concerns about using stablecoins across bank rails, for example, or network rails, as the case maybe, meant that there was an inherent inefficiency in the market. The Genius Act clarified much of that. Now, there's still some open question, which is probably less germane to commerce, but it may impact adoption and the pace of adoption.

Namely, the Genius Act is still unsettled on the question of yield. So, you can imagine when a stablecoin issuer mints a coin, what that issuer is doing is effectively buying U.S. treasuries and tokenizing them. When you own U.S. treasuries, you earn yield. So, the question of what an issuer can do with that yield, in other words, share it with partner platforms, distribution partner platforms, for example, so that rewards can be paid to holders of those stablecoins on partner platforms, it remains an open issue. Banks don't want it.

As you can imagine, it means they're going to be forced to pay interest in a lot of cases where they currently don't, and they fear deposit flight. But, we think, given the nature of the market and the importance of stablecoins to commerce, and I think this administration's willingness to support, sort of, transformative commerce and crypto in general, I think those rewards, provisions will be upheld.

It is one of the open issues in the in the industry. You can imagine if an issuer of a large U.S. stablecoin like USDC weren't able to pay its distribution partners, it could still earn plenty of money from the yield. But, it might be that its distribution partners, crypto trading platforms and exchanges, for example, wouldn't see as much adoption because they wouldn't be able to offer their customers rewards.

So, that is still one open issue around Genius, which I don't think changes the when or the inevitability or sorry, the if, I should say, or the inevitability of stablecoin commerce. But, it may further push out the when, which I think is the biggest question in most investors’ minds.

08:38 Chris

All right, so let's talk about use cases. The report suggests that cross-border B2B payments are the most compelling commercial application for stablecoins. So why is this? And what's the size of the opportunity?

08:50 Andrew

Well, so I think there's much debate in the market about stablecoins, particularly in consumer payments. And, I think there's a fear, as you saw with some of the large payment companies, namely the networks, when the Genius Act was passed. There's a fear that, perhaps they will supplant bank cards for payment. I think that's highly unlikely.

I think stablecoins for consumer payments are really a solution looking for a problem. I think anybody who's used a card, especially in the last several years, will agree that their acceptance is ubiquitous, globally. They're fast, they're cheap, consumer protections are abundant. There's a general acceptance that that bank cards are a very efficient, effective means of conducting commerce.

And, that contrasts pretty dramatically with what I described as the friction and the cost of cross-border commerce. So, I still think there are niche use cases in consumer payments, but I think the market's increasingly accepting the fact or becoming comfortable with the fact that stablecoins are unlikely to disrupt the bank card ecosystem as we know it. And, so, as I mentioned, it's really cross-border commerce where there's a ton of friction.

It's also worth touching on the fact that in a consumer payment, there isn't a whole lot of data, right? I'll go to a retailer, I'll present my card for payment, or I'll go to a website online and present my card for payment, perhaps in a token or in a digital wallet like many that exist in the market. And the transaction details, the transaction data are relatively well defined, right? It's my, you know, the product I purchase, the skew, the price, and ultimately the means of settlement and shipping information. You can imagine in a B2B transaction, and this is something we didn't really talk about too much in the report, but it's an area where we're beginning to become more focused, and this industry's evolving very quickly and, candidly, our understanding of the industry continues to evolve.

But, I think one of the unlocks around stablecoins, and one of the things that some of these emerging networks that we discuss in the report are trying to stand up is the idea of the integration of B2B data. I mentioned Programable Smart Contracts. You can imagine just the amount of data and the complexity of data that exist in B2B transactions, as opposed to consumer transactions. I think orchestration layers, and data exchange, and ERP integrations are, sort of, the plumbing that is going to underline, underlie the growth of commerce in stablecoins, cross-border commerce. And it's one more layer of complexity, which we think will, you know, favor the companies that that have the best understanding of the market and have invested the most in infrastructure.

I think one of the things you hear a lot about these days is a lot of companies want to issue their own stablecoins, and I think these are efforts to demonstrate that they're thinking about the market. But, I think they're also not very well thought out, in a lot of cases, for example, how a stablecoin will be integrated into existing commerce and infrastructure, how the existing connectivity between ERP systems and payment systems will incorporate the data that I mentioned into stablecoins.

All of that plumbing, I think, is more advanced at some of the larger, sort of, network-oriented companies in the space rather than, you know, for example, some of the payment providers or banking providers that might be interested in issuing stablecoins but don't know exactly or don't have a roadmap for integration into their infrastructure.

12:43 Chris

What are the biggest risks or uncertainties that could slow down stablecoin adoption?

12:48 Andrew

Well, I think there are a couple things. One, we mentioned rewards, right? And the idea that that the inability to pay distribution partners rewards could be an impediment. And, I'll say one more thing on that. Today, stablecoins are used almost exclusively in crypto trading for liquidity settlement. So, if I want to sell my Bitcoin but I don't want to convert back to fiat, perhaps I move the funds back into TradFi, I want to keep them in the crypto ecosystem. I will do that by holding USDC, predominantly. If I can't earn a yield for holding my stablecoin, whatever that stablecoin may be, USDC just happens to be the biggest. If I can't earn rewards for holding that stablecoin on a trading platform, or on an exchange, then I might think about what I want to do with my liquidity.

Do I want to take it off chain, bring it back to TradFi where I can earn a yield on treasuries, for example? That could thwart the growth of stablecoins more broadly. You can see, historically, we highlighted in the report, in times of extreme stress, we've seen a decoupling of the relationship between USDC and Bitcoin, and that was just flight of capital out of the crypto ecosystem.

You can imagine that would be an impediment. I think, like all financial transactions, you need regulations, you need regulatory clarity. You need rails, which I think the rails, and the infrastructure, and the plumbing for, not the money or the stablecoin movement in and of itself, because I think those rails actually exist today, but, as I mentioned, the integration of data and the transaction rules that are so critical to smart contracts. I think the timing with which, that infrastructure is stood up is an impediment.

I also think, though, the other thing that payments need and, you think about consumer payments is a proxy, they need they need fungibility. They need liquidity, right? So, when I use my payment card at the point of sale, there's certainty of settlement and there's really no cost other than interchange, and perhaps card acceptance cost for the merchant, which are well defined and well understood.

In stablecoin commerce, however, again when you consider USDC, USDC operates, as do most stablecoins, and I just go back to USDC because it's the largest viable, an order magnitude, USDC resides on multiple blockchains. So, it might be that one counterparty holds USDC on Ethereum, and that counterparty wants to pay, say a buyer wants to pay a supplier whose infrastructure is built on Solana, or who wants to receive stablecoin on the Solana chain.

The inability to use stablecoins cross-chain or the liquidity of the costs and some of the technology required for cross-chain stablecoin use could create liquidity issues. It's one of the reasons that some companies in the space have stood up what are known as cross-chain transaction protocols to smooth the use of, and to speed the use, and to eliminate some of the risk of cross-chain stablecoin movement.

The other, so again, it's an infrastructure question and a friction question. The other risk, I think, is fragmentation. If you look at consumer payments, there are a few providers, right? The banks, historically, years ago, you know, talking 30, 35 years ago, were issuing their own cards, their own branded cards. And, it was very clear with the emergence of two or three large payment networks that it would be better to allow the networks to act as effectively clearinghouses, and the banks would issue cards that that run across those networks.

And so, if you had 50 different cards in your wallet, right, you would constantly be wondering if you're walking into a merchant, can I use card A or card B? Does this merchant accept this card? You know, that's friction in and of itself. So, you can imagine if there were a proliferation of stablecoins, and there will be probably more than one or two standards.

But I think if there are ten or 12 or 15, it will work against liquidity, it will work against ubiquity, and I think it will create a challenge in terms of uptake. So, those are the things we're thinking about as potential impediments or risk to adopt.

17:20 Chris

Got it. And then, you know, what should listeners watch for as indicators of real world stablecoin adoption in the coming months?

17:27 Andrew

Yeah, I think the key indicator will be, sort of, a divergence between and, again, I'll go back to USDC because it is at 75, 76 billion, 25 to 35 times larger than the next largest Genius compliant stablecoin. I think a decoupling of USDC from Bitcoin would be a good indicator. So, USDC has, for the most part, run right around 4% of Bitcoin's market cap.

So, I think if you were to see a decoupling, what that would tell you is, perhaps it would tell you, not unambiguously, but likely, it would tell you that USDC is being minted outside of the crypto ecosystem. Now, I did mention that that relationship blew out around the time of the Silicon Valley bank collapse because there was a flight out of, you know, into safety, out of the crypto ecosystem.

So, there are times when separating signal from noise can be a little bit of a challenge. But, I would think that that's the key relationship investors should be looking at. And it's notable too, that bitcoin has declined about 25% from its all-time peak. I'm just looking today, you know, in real time here. USDC is still right around 75 billion. And so, when Bitcoin was at its peak, its market cap was 76, very close to where we are today. And, as I mentioned, Bitcoin is down 25%. That's encouraging. I think what that tells me, not necessarily that USDC is being used for commerce, so that you might interpret that a little bit that way, but it's telling me that whatever liquidity has been generated by this Bitcoin selloff is, at least, being kept in the ecosystem, right?

And so, I think that that's positive, generally, for as an indicator that stablecoins are being viewed as just that, stable, one for one relationships and fungible with U.S. dollars.

19:28 Chris

All right. Well, Andrew, this has been great. That's all the time we have for today. For those interested in reading the report is called “Programable Money: Stablecoins Are the Future of Cross-border Commerce.” You can request a copy by reaching out to us at WilliamBlair.com/contact-us. Andrew, thanks again for joining us. It's been a pleasure.

19:45 Andrew

Thank you. Appreciate the time.