Crypto venture capital cooled sharply in the first quarter of 2026, yet stablecoin payment infrastructure remained one of the few segments still attracting large rounds on a repeated basis.
Galaxy Research said crypto VCs invested $4 billion across roughly 355 deals during the quarter. Funding volume fell about 50% from the previous quarter, and deal count dropped 16%. The number of newly launched crypto venture funds also fell to its lowest level since the third quarter of 2020. Galaxy Research said the decline in total funding was driven mainly by a pullback in very large late-stage rounds, while seed and early-stage financing continued. Even so, 57% of capital still flowed to later-stage companies, a sign that investors are becoming more selective and are leaning toward businesses that already show customers, revenue and payment volume.
Strictly speaking, stablecoin payments were not the biggest funding category in crypto VC. In the first quarter of 2026, trading, investing, lending and exchange-related projects collectively raised about $2.6 billion and still dominated the market. The article’s point is narrower: in a much tougher fundraising environment, stablecoin payments stand out as one of the few areas still producing large financings and fast follow-on rounds.
Stablecoins are moving from trading rails to payment infrastructure
VC interest in stablecoin payments starts with the expansion of stablecoins themselves. A Federal Reserve study released in April 2026 said total stablecoin market capitalization stood at about $317 billion as of April 6, up more than 50% from the start of 2025. Adjusted data from Visa and Artemis showed about $10.2 trillion in stablecoin transaction volume over the previous 12 months within their measurement window, up 63% year over year.
That does not make the number a clean proxy for real payment activity. The article notes that about 36% of 2025 stablecoin volume came from centralized exchange deposits and withdrawals, which means the aggregate number cannot be treated as direct evidence of spending on goods and services.
Historically, stablecoins were used mainly to move money between exchanges or as a temporary shelter during swings in crypto asset prices. Now startups are trying to connect that on-chain liquidity with the real financial system, including cross-border B2B payments, remittances, payroll, treasury management, card spending, bank accounts and FX settlement.
That shift has also changed how investors look at the space. Rather than funding only stablecoin issuers, they are searching across the entire payments chain: base payment blockchains, issuance and orchestration, wallets, on- and off-ramps, FX liquidity, cards, banking connections, clearing and final redemption.
Recent funding examples span multiple parts of the stack
The article says the projects it lists are not a complete industry tally. They are representative funding cases since 2025, and they operate at different points in the stablecoin payment chain rather than inside one uniform business model.
Rain, RedotPay and Félix Pago sit closer to the application and distribution layer, dealing directly with how users remit, hold and spend stablecoins. OpenFX, Conduit and Noah focus on cross-border payments, FX liquidity and settlement between countries. Mesh and Crossmint provide wallets and payment orchestration tools. Stablecore and Ubyx connect banks, issuers and stablecoin clearing systems. Plasma and similar projects are trying to redesign the payment environment from the blockchain layer up.
For investors, that means the bet is not simply on one stablecoin winning. It is on a much broader set of infrastructure needs emerging as stablecoins become a payment tool.
Capital is favoring companies with operating metrics
Unlike earlier crypto startups that were often financed on future vision alone, many of the stablecoin payment companies now raising large rounds are disclosing transaction volume, customer counts or revenue.
Rain closed a $250 million Series C in January 2026. That came only about four months after its Series B and roughly 10 months after its Series A. The company said the number of active cards on its platform increased 30x in one year, annualized payment volume grew 38x, and it now processes about $3 billion in annualized transaction volume for more than 200 partners.
OpenFX raised a $23 million seed round in 2025 and then secured another $94 million about 10 months later. The company told Reuters that its annualized payment volume had risen from $4 billion a year earlier to more than $45 billion. It also said more than 98% of transactions can be completed within 60 minutes, compared with the two to five business days usually required for traditional FX settlement.
RedotPay said that as of November 2025, it had more than 6 million registered users across more than 100 markets, annualized payment volume above $10 billion, annualized revenue above $150 million, and that it had already reached profitability.
The article cautions that most of these figures come from company disclosures, may not be audited, and are not directly comparable because each firm may define payment volume, transaction volume and annualized revenue differently. Even so, they show a visible change in posture. Stablecoin payment companies are trying to justify their value with metrics familiar to traditional fintech investors instead of relying only on on-chain addresses, token prices and community size.
Why VCs are paying attention
Cross-border payments have a real efficiency problem
Traditional cross-border payments often pass through the sending bank, correspondent banks, clearing networks, the receiving bank and local payment institutions. Each operates on its own timetable, ledger and compliance process, and settlement can take days.
A payment company that wants to offer instant transfers across several countries also needs to pre-fund bank accounts in each market. That money may not be actively used, but it has to sit in place so users can withdraw on time. The cost of idle trapped capital can be high.
Stablecoins do not solve every part of that process, but they can provide a unified settlement asset that runs around the clock. A payment company can move value on-chain first, then rely on local partners to convert stablecoins into local currency. For cross-border B2B payments, remittances, global payroll and internal treasury transfers, faster settlement and lower pre-funding requirements have direct commercial value.
The revenue model is easier to understand
Stablecoin payment companies generally do not depend on token appreciation to make money. They charge transaction fees, FX spreads, card issuance fees, account management fees, API subscription fees, or on- and off-ramp fees.
That is not a new model. At its core, it looks a lot like traditional payments and fintech. The difference is that stablecoins are used as a back-end settlement tool to reduce friction between countries, currencies and financial institutions. For VCs, that means these businesses can be valued with conventional metrics such as payment volume, net revenue, gross margin, customer retention and cost per transaction. It also makes the story easier to explain to mainstream financial investors.
Stablecoins are becoming invisible back-end rails
In the earlier version of stablecoin payments, users were expected to buy stablecoins, move them into a wallet and then find merchants willing to accept crypto. That required users to understand blockchain networks, wallet addresses and gas fees.
More recently funded companies are trying to hide that complexity. Félix Pago lets users send remittances through WhatsApp. Rain and RedotPay connect stablecoins to payment cards. Mesh lets a user pay with one crypto asset while the merchant receives another stablecoin. OpenFX mainly serves fintechs and remittance firms, which means the end user may not even know stablecoins are involved in settlement.
That is an important distinction. The VC bet is not necessarily that consumers will consciously choose to pay with stablecoins. It is that stablecoins can replace parts of the traditional payments and clearing stack behind the scenes while users continue to see familiar interfaces such as cards, bank accounts, local currencies or messaging apps.
Regulatory changes are expanding the customer base
Regulatory uncertainty used to limit how banks and large payment institutions could engage with stablecoins. The article says the U.S. passed the GENIUS Act in 2025, creating a federal regulatory framework for payment stablecoins. It also says the Office of the Comptroller of the Currency confirmed that U.S. national banks and federal savings associations could conduct certain stablecoin, digital asset custody and blockchain network activities, while removing some earlier extra "non-objection" procedures.
Those rules raise the cost of reserves, audits, anti-money-laundering controls and licensing, but they also make it easier for banks, enterprises and payment companies to determine what kinds of business can move forward. For institution-facing companies such as Stablecore, Ubyx and Rain, regulatory clarity means the potential customer set can expand from crypto-native firms to banks, fintech platforms and traditional companies.
The article uses that point to explain why the recent investor roster is no longer limited to crypto-native names such as Dragonfly, Galaxy Ventures and Paradigm. It also includes traditional technology and fintech investors including ICONIQ, Accel, Lightspeed, QED Investors and Norwest.
M&A in traditional payments is creating exit expectations
In February 2025, Stripe completed its acquisition of stablecoin infrastructure company Bridge in a deal media reports valued at about $1.1 billion. Bridge helps businesses issue, manage and move stablecoins, and Stripe later integrated those capabilities into its own payment products.
In March 2026, Mastercard said it planned to acquire stablecoin infrastructure company BVNK for up to $1.8 billion, including $300 million in contingent payments. BVNK connects stablecoins, fiat, banks and different blockchains to provide cross-border payments and settlement services for businesses.
For venture investors, those two deals matter because they broaden the plausible exit path. A stablecoin payments company no longer has to rely only on launching a token or waiting for an IPO. It may also be acquired by a card network, payment company, bank or large fintech platform.
The same deals also highlight the value of licenses, local banking relationships and an established customer network. Traditional payment firms can build blockchain technology in-house, but building compliant infrastructure and liquidity rails across multiple countries can take years. Buying a company that already did that work may be faster.
Why the enthusiasm may be overstated
On-chain volume is not the same as payment volume
Stablecoin activity on-chain includes exchange transfers, market making, arbitrage, DeFi, smart contract interactions, institutional fund movements and ordinary payments. Even after filtering some bots and repeated transfers, the remainder still cannot be treated as pure commerce activity.
The article cites Visa as saying that as of March 2025, retail-sized transactions still accounted for less than 1% of adjusted stablecoin transaction volume over the prior 12 months. That means claims that stablecoin volume has surpassed card networks do not prove stablecoin payments have already overtaken Visa or Mastercard. The underlying datasets are measuring different kinds of activity.
Funding is concentrated in a small set of names
Rain raised $250 million in one round. RedotPay raised a cumulative $194 million in 2025. OpenFX brought in $94 million in one financing. A few large rounds can lift the headline number for the entire segment, but that does not mean every stablecoin payment startup is finding fundraising easy.
The article argues that investors are backing companies that already show scale. Rain, RedotPay and OpenFX have all disclosed fast-growing business metrics. Early-stage firms without licenses, local payment channels or real customers still face a difficult market. In other words, this looks more like capital concentrating around category leaders than a broad boom across all startups in stablecoin payments.
Core services may commoditize quickly
The technical barriers to wallets, stablecoin on- and off-ramps, cross-border transfers and payment APIs are falling. More companies can now offer similar features, while banks, exchanges, stablecoin issuers and traditional payment providers are building their own products as well.
If several platforms can all move USDC or USDT, then offering a basic on-chain payment interface alone may not create a lasting moat. Competition shifts to licenses, local banking channels, FX pricing, payment success rates, risk controls, customer service and cost structure.
As competition intensifies, transaction fees and FX spreads may compress. Payment volume can keep growing without automatically translating into stronger profits.
Global expansion still has to be built market by market
Blockchains operate across borders, but bank accounts, licenses and fiat systems do not. Every time a stablecoin payment company enters a new market, it still needs local banks, payment institutions and liquidity providers, and it must comply with local KYC, AML, sanctions screening, data and consumer protection rules.
If a local banking partner stops working with the company, or if on- and off-ramp channels break down, then even funds that arrive on-chain may not be convertible into the fiat currency the user needs. Stablecoins solve mainly the intermediate settlement layer, not the full removal of the traditional financial system.
Traditional finance firms are both customers and competitors
Banks and card networks are investing in or acquiring stablecoin infrastructure companies because they want to gain those capabilities quickly. But as technology and regulation mature, those same institutions may build their own systems and fold stablecoin functionality into existing products.
Stripe, Visa, Mastercard, PayPal and large banks already have merchants, accounts, brands and regulatory resources. Startups may become suppliers to them or acquisition targets, but they may also end up pushed into lower-margin back-end service roles.
Where funding may go next
The article says the current shift in investment focus is moving from "issuing more stablecoins" to "getting stablecoins into banks, enterprises and user accounts." It highlights several areas that could continue drawing attention.
- Cross-border B2B payments. Compared with consumer transactions, business payments are larger and more sensitive to settlement speed, capital lockup and FX costs. Businesses are also more willing to pay for efficiency gains.
- Connections between banks and stablecoins. The opportunity represented by Stablecore and Ubyx is to help banks receive, send, clear and redeem stablecoins across different issuers and blockchains.
- Stablecoin cards and local payment acceptance. Users do not need to find merchants that accept stablecoins directly if they can spend through existing card and acquiring networks. The repeat funding seen by Rain and RedotPay suggests this remains one of the more direct paths into everyday payments.
- Orchestration layers for multiple stablecoins and multiple blockchains. Enterprises usually do not want to integrate USDT, USDC, different blockchains and country-specific on- and off-ramp providers one by one. Platforms that can unify asset selection, routing, fees, compliance and conversion may be more attractive to institutional customers.
- AI agent payments. The article says traditional payment systems were not designed around AI agent workflows such as programmable settlement, since they often rely on CAPTCHA, card verification and manual authorization. Stablecoin wallets and programmable payments may offer another route, though for now this theme remains more about infrastructure buildout and expectation than verified payment demand or proven revenue scale.
The core venture bet is on the connection layer
The article closes with a narrower interpretation of the trend. VC interest in stablecoin payments does not mean the crypto funding winter is over, and it does not mean stablecoins have already replaced traditional payment systems at scale. What it suggests is that, after financing conditions tightened, investors started looking harder for businesses that can operate independently of token prices, address real financial frictions and generate recurring revenue.
Stablecoins offer a global, programmable settlement asset that runs at all hours. The startup opportunity lies in building the connections between stablecoins and bank accounts, FX markets, card networks, local currencies and compliance systems. In the next phase, the factors that determine value will not be headline fundraising totals or raw on-chain volume alone. The key questions are how much of that activity reflects real customer payments, how much net revenue it creates, how many compliant markets a company can enter, and whether it can still make money after liquidity, channel and compliance costs.
The article’s conclusion is that VCs are not making a simple winner-take-all bet on one stablecoin. They are betting that important pieces of infrastructure still need to be built as stablecoins move deeper into the real financial system.