Stablecoins are rapidly gaining ground as a viable alternative to traditional digital payments, increasingly used not only by crypto traders but also by consumers and businesses in everyday transactions. However, while they offer the promise of speed and transparency, the associated costs continue to be a significant hurdle to broader adoption.
According to recent data from Artemis, a New York-based blockchain analytics firm, stablecoin usage has surged substantially. Between January 2023 and August 2025, an estimated $136 billion in stablecoin transactions were recorded, with the annualized run rate pegged at $122 billion. The firm analyzed activity across 33 stablecoin-focused companies, combining surveys from 22 firms with estimates from 11 additional players, making it one of the most comprehensive datasets available on the topic.
Dominating this space is Tether’s USDT, accounting for a staggering 85% of transaction volume. It’s followed by Circle’s USDC, both of which are actively used across blockchain networks like Ethereum, Tron, Binance Smart Chain, and Polygon. What’s notable is the shift in how stablecoins are being used — moving from niche trading desks to mainstream financial applications. Major payment platforms such as Visa, Mastercard, PayPal, and Stripe are beginning to incorporate stablecoin capabilities, signaling a transformative shift in digital payments.
Despite this progress, the convenience of stablecoins often comes with hidden costs. While blockchain networks like Solana offer ultra-low-cost peer-to-peer transactions — often just fractions of a cent — the total cost of using stablecoins adds up quickly. Exchange fees, network transfer charges, and foreign exchange spreads can significantly diminish the cost advantage that stablecoins are supposed to offer.
These challenges were recently highlighted by entrepreneur and investor Kevin O’Leary. He cited an instance where Ethereum’s network congestion pushed transaction fees to over $1,000 for a relatively small transfer. “It’s like paying a thousand-dollar toll to drive on a one-lane highway,” O’Leary remarked, emphasizing that the underlying infrastructure still struggles under real-world demand. He stressed that stablecoin adoption should be matched by robust, scalable infrastructure — not just speculative hype.
This conversation comes against the backdrop of a shifting regulatory landscape. In recent months, the U.S. government introduced the GENIUS Act, signed into law by President Donald Trump, which aims to provide a federal framework for stablecoin issuers. However, critics argue that the legislation does little to safeguard consumers or resolve potential conflicts of interest.
One such conflict centers around World Liberty Financial, a crypto venture reportedly controlled in part by the Trump family, which launched its own stablecoin, USD1. Despite scrutiny, USD1 has gained traction, especially after a $2 billion investment fund from the United Arab Emirates used it to acquire a stake in Binance, the world’s largest cryptocurrency exchange.
In a controversial move, President Trump also recently pardoned Binance founder Changpeng Zhao, who had faced jail time related to regulatory lapses in preventing illicit financial activity on the platform. This has fueled concerns about political entanglements and favoritism in crypto regulation.
Stablecoins like USD1 are typically backed by fixed assets, including U.S. Treasury bonds, allowing issuers to earn yield from the reserves. This model, while financially sustainable for issuers, raises questions about the transparency and safety of these reserves, particularly during periods of financial stress or regulatory scrutiny.
Despite these issues, Artemis’ report underscores that stablecoin payments are gaining traction across various sectors. From business-to-business transactions to consumer remittances, the utility of stablecoins is expanding, even if it still pales in comparison to the scale of traditional finance systems.
Several challenges remain on the road to widespread adoption. One is scalability — many blockchain networks still cannot handle high transaction volumes without significant slowdowns and fee spikes. Ethereum, for instance, has faced persistent issues with congestion, despite ongoing upgrades and the rollout of Layer 2 solutions.
Another concern is interoperability. With multiple stablecoins operating on various blockchains, there is a growing need for seamless cross-chain transactions. Without it, users are forced to rely on centralized exchanges or bridges, which not only add costs but also introduce security vulnerabilities.
Moreover, regulatory clarity remains elusive. While the GENIUS Act is a step forward, a patchwork of global regulations continues to hinder innovation. Inconsistent policies across jurisdictions make it difficult for businesses to scale stablecoin services internationally, limiting their potential as a truly global payment method.
Consumer protection is also a pressing concern. As more individuals start using stablecoins for everyday transactions, there must be robust mechanisms to safeguard against fraud, ensure reserve transparency, and provide redress in case of disputes. Currently, many stablecoin issuers operate in regulatory gray zones, with limited oversight or accountability.
Looking ahead, the next phase of stablecoin evolution may involve central bank digital currencies (CBDCs) and greater collaboration between public and private sectors. Governments are increasingly exploring digital versions of their national currencies, which could either complement or compete with existing stablecoins.
In the meantime, technological innovation continues. Projects focused on reducing fees, improving transaction throughput, and enhancing scalability are in development. Solutions like rollups, sharding, and next-generation consensus mechanisms offer promise, but real-world implementation and adoption remain a work in progress.
In conclusion, while stablecoins are redefining the payment landscape, they are not without their growing pains. The sector stands at a crossroads between rapid innovation and the need for mature, scalable infrastructure. If addressed properly, stablecoins could become a cornerstone of modern finance — but until then, high fees and systemic limitations remain major obstacles.