The A16Z report that explains why stablecoins are the new standard for global banking

Stablecoins are rebuilding the global financial infrastructure, according to the latest report from A16Z Crypto. Learn more here.

The financial system is undergoing a comprehensive reconstruction of its technical infrastructure, a process that is progressing faster than those outside the technology sector perceive. 

According to the latest analysis from the venture capital firm A16Z CryptoStablecoins have ceased to be a niche instrument for trading digital assets and have become the fundamental backbone of global finance. According to the report, this shift reflects a structural migration toward Banking as a Service (BaaS) models based on decentralized networks. 

The firm's analysts maintain that we are facing a "Troy Horse" This facilitates access to dollars in emerging markets, with the ultimate goal of establishing a fully open credit, investment, and insurance system. Under this premise, connectivity between legacy systems and digital asset architecture becomes the engine of a programmable, borderless economy.

The transition to the on-chain banking model

The evolution of the financial sector is now divided between those who lease traditional banking licenses and those who build directly on blockchain protocols. The A16Z report emphasizes that on-chain infrastructure allows for the combination of payments, current accounts, foreign exchange, and credit into a single, modular technology package. This technical capability eliminates the need to rely on multiple local banking partners or regional licenses, which, until a decade ago, were insurmountable barriers to entry. By using self-custody wallets, companies reduce operational friction and dependence on intermediaries, granting unprecedented autonomy in capital management.

This new financial architecture does not treat all blockchains equally. A16Z experts identify a clear specialization in three areas: general purpose networks such as Ethereum or Solana for complex capital markets; specific networks for paymentsoptimized for predictable costs and privacy; and institutional networks designed to comply with strict regulatory frameworks. 

In this ecosystem, stablecoin issuers participate in a race to obtain legal status, such as National Trust Charter Under the GENIUS Act, they are seeking direct access to the Federal Reserve's lending facilities. Achieving this position would place these assets at the core of the global payments hierarchy, transforming the sector's legitimacy with regulators and institutional partners.

The transformative potential of stablecoins according to A16Z

The firm identifies growth drivers that go far beyond simple value transfer. Below are the areas where stablecoins are generating a disruptive impact:

• Universal access to the dollar: According to experts, stablecoins allow individuals in economies with high inflation or poor banking systems to save and trade in hard currency without a U.S. account.

• Efficiency in the "average mile": According to the report, stablecoins eliminate the reliance on pre-funded correspondent accounts, reducing costs and times in international transfers.

• Payment scheduling: The report also highlights that stablecoins facilitate the integration of financial services into corporate workflows, such as treasury management and payments to global suppliers.

• Inclusion of emerging markets: Stablecoins connect freelancers and small businesses in regions like Southeast Asia or Latin America with instant global payment rails.

• Reduction of cost-to-serve: Ultimately, the a16z Crypto report points out that automation through smart contracts allows for the provision of low-value services that are unprofitable for traditional banking.

From capital flows to the global credit market

If payments represent the first act of this transformation, credit will be the second and more significant one. A16Z projects that, once a massive scale of stablecoin circulation is reached, a natural demand will emerge to put that capital to work. 

Unlike the initial cycles of decentralized finance (DeFi), where credit was self-referential and served primarily for speculation, the new model is geared towards productive economyThis includes loans against real-world assets, accounts receivable financing, and working capital for businesses in regions where bank credit is nonexistent or prohibitively expensive.

This transformation bears similarities to the growth of private credit over the last decade. Faced with the retreat of commercial banks due to regulatory pressures, private lending funds filled that void. Now, the stablecoin infrastructure offers a similar alternative, but with the advantage of being global and programmable by default. 

From a geopolitical perspective, each digital wallet that holds dollars becomes a new node reinforcing the presence of the US currency. According to the firm's analysts, this represents a soft power tool that amplifies US economic influence, allowing the dollar to penetrate economies where it previously had limited reach. This new system under construction not only seeks to move money faster but also to redesign access to wealth-creation tools.