Banks Are Crucial for Unlocking the Full Potential of Stablecoins, According to PayPal Crypto Head

Jose Fernandez da Ponte, PayPal's senior vice president of digital currencies, stressed that the involvement of banks is necessary for the success of stablecoins during a panel discussion at Consensus 2025 in Toronto. "It may seem counterintuitive, but the presence of banks in this space is essential," Fernandez da Ponte stated, highlighting the importance of their infrastructure, including custody and fiat rails, in scaling stablecoins beyond the crypto community. "That connectivity and fabric are vital for growth." His remarks were made as U.S. lawmakers are moving closer to passing stablecoin legislation, which could redefine the market and allow banks to participate. Read more: Stablecoin Legislation Efforts in the U.S. Senate Are Still Ongoing, with a Possible Return to the Floor: Sources According to Anthony Soohoo, chairman and CEO of MoneyGram, a cross-border money transfer service, "This is going to be a significant breakthrough." He added, "There's always uncertainty: Can I trust this? The stablecoin legislation will address many of those concerns." Both executives anticipate a wave of new issuers entering the market once regulation is in place, followed by a period of consolidation. Fernandez da Ponte noted, "It won't be 300 stablecoins, and it won't be just two." Currently, Tether's USDT and Circle's USDC dominate the market, accounting for nearly 90% of the $230 billion asset class. PayPal's PYUSD, launched in 2023, has a significantly lower supply of $900 million. Fernandez da Ponte emphasized that market cap is not the primary metric for success. "We focus on velocity, active wallets, and the number of transactions," he said. "Those are the drivers of real usage." In countries with high inflation and volatile currencies, consumers are turning to dollar-backed stablecoins as a store of value and a means for cross-border payments. Soohoo stated that MoneyGram, which operates in over 200 countries with nearly half a million cash-access locations, is facilitating access to these stablecoins. "We position ourselves between physical and digital finance," Soohoo said. "Many consumers in local economies want to hold value in dollars but still need to access it as cash to spend in places that don't accept digital currency." The adoption of stablecoins in developed countries has been slower. However, with clear regulation in place, stablecoins can streamline corporate treasury operations and cross-border disbursements, according to Fernandez da Ponte. "We used to rush to ensure money was in the right places before the weekend," he said. "Now, we're sending money to the Philippines and Africa in ten minutes using stablecoins." Both executives emphasized that real-world use cases, rather than hype, will determine whether stablecoins can reach the projected trillion-dollar scale in the next few years. "Consumers don't care about stablecoins; they care about solving problems," Fernandez da Ponte said. "We're five years into a ten-year journey, and regulation will define the next half."