Stablecoins Triple Role in OTC Transactions: Report

Institutional investors have embraced stablecoins in the first six months of 2025 at a faster rate than ever, deploying these tokens in 75% of OTC deals compared with just 23% in 2023.

The findings are from a report from Finery Markets, which is based on the analysis of over 4.1 million institutional spot crypto trades executed on the company’s technology platform during the first half of 2025.

“A defining feature of H1 2025 was the growing institutional preference for stablecoin-based trading,” the report says. Last year, stablecoin-related trades made up just 46% of all transactions.

Stablecoins have also registered as the fastest growing segment in the first six months of 2025, with crypto-to-stablecoin transactions rising 277.4% year-on-year, compared with a 148% rise in crypto-to-crypto transactions and a mere 49% increase in crypto-to-fiat trades.

This signals “a broader industry shift toward stablecoin settlement instead of traditional fiat,” the report argues.

USDC, the stablecoin issued by Circle, which recently IPO-ed amid blockbuster demand, clocked up a staggering 29x increase year-on-year. “Stablecoins became the mainstream. Some have dubbed them as the long-awaited ‘killer use case’ for crypto – or the industry’s ‘WhatsApp moment,” the authors of the report note.

The surge in uptake comes amid robust expansion in the overall crypto OTC space, fuelled by improved sentiment and renewed institutional participation. Trade count rose 58% year-on-year and volumes increased 113% compared with the first half of last year.

Shifting policy sentiment from the US got the year off to a strong start in the first quarter, spurring strong monthly growth that peaked at 164% in January before moderating to 137% in February and 129% in March. Growth remained above 80% throughout the second quarter.

“The promise of stablecoins lies in more than payments,” the report argues. “It’s about programmable money for the capital markets, corporate treasuries optimizing liquidity, and real-time financial operations – from FX trading to securities settlement and cash management.”

VC and M&A Activity Accelerates

Robust growth in the stablecoin sector is translating into an uptick in M&A activity, such as Stripe’s $1.1bn acquisition of Bridge, Anchorage’s acquisition of Mountain Protocol, and Gnosis’s acquisition of HQ.xyz.

Investment appetite from venture capital firms is also on the rise, with stablecoin clearing startup Ubyx recently raising $10 million and Galaxy Digital successfully securing $175 million for a new fund dedicated to DeFi and stablecoin investments.

These deals are based on expectations that stablecoins will continue to bridge the gap between digital and fiat assets and act as an on/off-ramp for transactions. Circle’s USDC alone helped move $850 billion between fiat and blockchains. “We anticipate this volume will expand significantly as more USD-pegged and diverse non-USD stablecoins emerge for use in FX, local capital markets, and regional remittances,” the Finery report says.

Stablecoins have other roles to play in the future: connecting primary and secondary markets. This is only going to be possible for stablecoins that are highly liquid, easily tradeable and legally sound. But for those that meet these criteria, the future is bright.

“This evolution extends far beyond simple payments,” the report says. “It empowers banks to streamline FX and inter-fund transfers, enables tech firms to embed closed-loop stablecoins directly into their applications, allows corporates to mint their own stablecoins for loyalty programs or ecosystem development, and opens doors for asset managers to innovate with tokenised money markets.”