More than three years ago, flow published the article Is the crypto party over? (7 June 2022), based on Deutsche Bank’s analysis of what drove the crypto sell-off at that time. Interest rate hikes by several of the world’s major central banks were cited as contributing factors as investments were reallocated from crypto currencies to ‘safe- haven’ assets.

Since then, Bitcoin prices have multiplied by around 370% between 2023 and 2025. This robust recovery suggests a potential decoupling from its fundamental value and a move from being a purely speculative asset to something more realistic. What does the shift mean for the digital asset landscape and the future of payments?

This article provides a practical digital money update with a specific focus on stablecoins and is based on insights from the recent webinar held for Deutsche Bank clients hosted by Marion Laboure, Research Analyst at Deutsche Bank Research and Sabih Behzad, Head of Digital Assets and Currencies Transformation at Deutsche Bank.

Money, explained Laboure in her opening presentation, is “a unit of account, a medium of exchange and a store value”. She classifies stablecoins as a ‘stable’ means of payment – in being pegged to something which is stable (such as fiat currency). Bitcoin does not have these attributes and as such is not really a ‘currency’ at all, but rather an asset – the correct term being crypto asset.

Figure 1: Market capitalisation for crypto assets
Sources: Deutsche Bank Research, Haver Analytics, Bloomberg Finance LP, CoinGecko. Note: Stablecoins market capitalisation is calculated as the sum of the market capitalisation of all stablecoins listed on Haver Analytics. Last updated Feb 9, 2026

Bitcoin’s well-charted volatility (see Figure 1) looks set to persist as an inherent feature even as it evolves from a purely speculative instrument into an institutional asset. Regulatory advancements, such as Europe’s Markets in Crypto-Assets Regulation (MiCA) 2024 and the forthcoming US CLARITY Act¹, along with better custody solutions and exchange-traded funds (ETFs) will, said Laboure, “be crucial in this maturation”.

Figure 2: Money and crypto assets
Source: Deutsche Bank

As central banks and the private sector are both expanding the portfolio of digital money in the monetary system (see Figure 2) the role of Bitcoin as a catalyst in this new world of payments infrastructure cannot be underestimated, Laboure said. “Bitcoin was not only central to the rise of stablecoins, but it also created the technological and philosophical conditions that made them possible. Its blockchain became the initial rails for the first and most dominant stablecoin, Tether, and its critique of centralised finance (such as SWIFT) framed the political context in which stablecoins developed,” she notes in the accompanying paper published on 3 February, Currency crypto and payment infrastructure.²

“Bitcoin was not only central to the rise of stablecoins, but it also created the technological and philosophical conditions that made them possible”
Marion Laboure, Research Analyst, Deutsche Bank Research

Laboure set out how stablecoins can be categorised into four main categories: fiat-backed, asset-backed, crypto-backed and algorithmic. “The market is overwhelmingly dominated by those pegged to the USD, representing 99% of total market capitalisation.” In her paper, this is explained further: “The popularity of dollar-backed stablecoins stems from their utility as a medium of exchange and their aim to maintain a ‘stable’ value by pegging their price to the ‘safe haven’ properties of a portfolio of cash, bank deposits, and short-term securities (mainly US Treasuries), issuing tokens 1:1 against these assets.”

Around 85% to 90% of stablecoins are used for crypto trading as several countries do not allow direct investment into crypto assets and, said Laboure, it is “easier, faster and less expensive to have stablecoins for this”. Stablecoins are increasingly recognised for real-world utility in B2B payments and remittances, and she estimates around 2% are used for retail payments, 2% for remittances and a further 7% for settling payments for real-world asset trades. Key benefits include lower transaction fees and FX conversion costs along with improved transaction transparency, streamlined reconciliation and strengthened compliance.

The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act passed in July 2025³ was pivotal because, explained Laboure, “it encouraged USD-stablecoin growth”. The GENIUS Act:

• Focuses only on stablecoins (not crypto broadly).
• Legally creates “permitted stablecoin issuers” for the first-time. Issuers can be non-banks but must meet bank-like federal or state standards.
• Has a strict 1:1 backing: US cash, ≤93-day T-bills, repos/reverse repos, or money-market funds holding those assets.
• No yield by issuers – so stablecoins are treated as money, not investment products (but distributors such as exchanges, brokers, dealers, and affiliates can and do offer these incentives. How this loophole in the US regulation might be closed has yet to be clarified).⁴
• Full AML/KYC/BSA alignment with banks.
• Applies to foreign issuers operating in the US (for example, Tether).

In comparison, the EU’s MICA is a broad crypto rulebook designed to protect monetary sovereignty and financial stability and:

• Covers crypto broadly, not just stablecoins.
• Addresses explicit concern about threats to the euro and monetary transmission.
• Applies caps on non-euro stablecoins (€200m transactions per day).
• Reserves must be held in the EU, with EU-regulated custodians.
• Issuers must establish and maintain an EU presence.

While the potential for rapid USD-backed stablecoin growth extends American monetary reach, it also introduces new risks to the international monetary system. These risks span financial stability, monetary policy transmission, and capital flow management, warned Laboure, pointing out that in 2024 63% of illicit crypto use involved stablecoins.

In its June 2025 publication, The next-generation monetary and financial system, the Bank for International Settlements warned of capital flight in emerging markets⁵; and that USD stablecoins may weaken Euro-Area monetary policy. The report also argues that stablecoins lack sound money features – in other words singles, elasticity, and integrity, leading to undermined financial stability.

When it comes to the practical relevance of the stablecoin development to senior executives, there are “a few basic questions to think about”, said Sabih Behzad.

• Is there really value in this thing and is it gaining momentum?
• What is it actually for, what problems is it trying to solve and can we see traction here?
• What are market participants doing about it? This is banks, regulators and different governments around the world.

Behzad demonstrated how stablecoin payment activity is increasing but annual real-world payment volumes remain modest despite overall stablecoin transaction volume growth. “In 2025, overall stablecoin transaction volume was estimated to be US$62trn,” he said, citing the BCG white paper Stablecoin payments – the truth behind the numbers published in January 2026. See Figure 3.⁶

Figure 3: Stablecoin payment activity is increasing
Source: BCG Stablecoin Payments 2026

But once non-economic activity (bots and internal transactions) is removed from this total, approximately US$4.2trn only is estimated to be actual payments – and from those around US$350bn to US$550bn account for real-economy payments.

While real economy payments represent a minority share, they are growing rapidly and are concentrated in use cases where traditional payment rails are structurally inefficient. This (US$350– US$550bn) is still a large number, said Behzad, but it is small compared with what we see in the traditional flows in markets. The question is whether this is the end point or whether stablecoins are set for “tremendous growth”. He pointed out that this estimated figure of real-economy payments has grown by 60% on the previous year and by far the largest area of growth is in B2B payments. “So, there is certainly momentum behind it,” he added.

“Unlocking further real-world use cases depends on advancing a few key areas”
Sabih Behzad, Head of Digital Assets and Currencies Transformation at Deutsche Bank

Unlocking further real-world use cases depends on advancing a few key areas, said Behzad. Stablecoins were needed for crypto trading because traders had large crypto positions that needed to be rebalanced on a 24/7 basis (bank money is not available in this way). Although this is still the main use case, others are emerging.

• Tokenised securities settlement – as more assets come onto the blockchain, there is the need to have a cash leg that also operates on a 24/7 basis to settle transactions.
• B2B cross-border payments. When you move away from the established cross-border payment corridors into emerging markets then there may well be a good case to make for using a stablecoin. This is where someone on-ramps from fiat cash into a stablecoin, that stablecoin then transfers across the border instantly. So the stablecoin provides a settlement layer the central bank or commercial bank may use and then the stablecoin is off ramped into that local country and cash provided to the end users – known as the stablecoin ‘sandwich’.
• Treasury and cash management. Here there is an opportunity to move cash 24/7, increase opportunities for cash pooling, enable ‘just-in-time’ funding and allow better intraday funding opportunities.
• Repo and securities financing – there is a lot of discussion around potentially using stablecoins as collateral, again enabling 24/7 movement of that collateral.

Behzad next examined what is needed for these use cases to develop traction and momentum. Although the following barriers may well get dismantled in time, they are currently creating friction:

• Global regulatory clarity and support. This is critical and regulatory arbitrage cannot be allowed to happen.
• Interoperability across blockchains and venues. One of the challenges is that there are many different types of stablecoins that can be issued on many different types of blockchains. While there are various solutions in the market that address this diversity, the industry needs to unlock the problem as a whole.
• Seamless integration with legacy systems. Most corporates have legacy systems such as ERP architecture and new types of money and payments need to integrate with them. “We are seeing some ERP vendors lean into this space and provide integration”.

Within the banking sector there have been a number of stablecoin initiatives. These include:

• Societe Generale-Forge (the digital asset arm of Societe Generale) issued a stablecoin in EUR and USD in September 2025 that has had some momentum.⁷
• AllUnity. Established by DWS (Deutsche Bank’s Asset Management arm), Flow Traders and Galaxy, AllUnity launched the EURAU in 2025 (Germany’s first fully reserved MiCar-compliant euro stablecoin under a BaFin EMI licence and is planning to launch CHFAU – EUR and Swiss Franc pegged stablecoins.
• Qivalis. Backed by a consortium of European banks,⁸ this stablecoin is “100% backed by reserves held in euros and high-quality liquid assets, held by regulated custodians”.
• G7 currency-pegged stablecoin. A coalition of 10 major banks (including Deutsche Bank) exploring stablecoins pegged to G7 currencies built for deployment on public blockchain was announced on 10 October 2025.⁹

Behzad added, “Beyond the banking sector, key infrastructure providers and central securities depositories are now exploring and issuing regulated stablecoins to provide the programmable cash layer that is required for large-scale asset tokenisation.”

In concluding the webinar, Laboure and Behzad agreed that while stablecoins dominate the headlines, progress across other forms of tokenised money is also accelerating – in particular central bank digital currencies. These will be covered in a follow-up article.

The webinar, Outlook for Digital Assets was presented by Marion Laboure, Research Analyst, Deutsche Bank Research and Sabih Behzad, Head of Digital Assets and Currencies Transformation at Deutsche Bank on 9 February 2026 to Deutsche Bank clients

Future Payments: Bitcoin: The end of "The Tinkerbell Effect" by Deutsche Bank Research Analysts Marion Laboure and Camilla Siazon, 4 February 2026

Currency crypto and payment infrastructure by Deutsche Bank Research Analysts Marion Laboure and Camilla Siazon, 3 February 2026

Sources

¹ See The Facts: The CLARITY Act at senate.gov
² See Chapter 1: Currency, crypto, and payment infrastructure at dbresearch.com
³ See Stablecoins and the Genius Act: What you need to know at dlapiper.com
⁴ See Trade Groups Urge Congress to Address GENIUS Act Loopholes at natlawreview.com
⁵ See III. The next-generation monetary and financial system at bis.org
⁶ See Stablecoin Payments at bcg.com
⁷ See Societe generale-forge deploys its euro and dollar stablecoins in decentralized finance via its partners at sgforge.com
⁸ See qivalis at qivalis.eu
⁹ See Major banks explore issuing stablecoin pegged to G7 currencies at reuters.com