Stablecoins Power Billions in Payments. One in Ten Could Be Illicit

Would you take a new payment rail that claims to handle transaction volumes that are multiples higher than global industry stalwarts and blue chip networks at face value?

Or might you take it with a grain of salt?

That is the question facing many businesses and financial institutions with stablecoins, the typically dollar-pegged blockchain financial instruments that the cryptoverse is pushing forward as its best bet for integration into the broader traditional financial system.

While headlines tout the explosive growth of stablecoin transaction volumes, the topline numbers may hide a different story. According to data in the a16z State of Crypto 2025 report, stablecoins were responsible for $46 trillion in total transaction volume over the past year (down to $9 trillion when adjusted to remove bots and other artificially inflationary activity). Another recent report highlighted that stablecoin volumes have surged 70% since the U.S. signed the GENIUS Act into law this past July.

Of course, the overall payments industry in 2025 is expected to handle $2 quadrillion in value flows. This in turn positions stablecoins themselves a comparative grain of salt in the payments space.

And as the a16z report noted, the numbers in its own report mostly represents financial flows, which are apples and oranges compared to retail payments for card networks.

Still, what many of these estimates ultimately do fail to flag is that the same rails delivering legitimate payments also deliver illicit ones. And those illicit ones are becoming a statistically significant slice of the total, adjusted, stablecoin volume pie.

One estimate from the blockchain analytics firm Chainalysis found that stablecoins enabled $40 billion in crypto crime from 2022-2023, representing about 12-16% of the total stablecoin landscape’s market capitalization at year-end in the same time period.

The true question facing industry and regulators today is not just whether stablecoins are “stable” in economic terms, but whether we are fully seeing what moves through them. The numbers show that legitimate use cases are scaling, but also that bad actors are gravitating toward the very asset class whose features make sense for their purposes.

Read more: Making Sense of What AML Looks Like Across the Crypto Landscape 

Legitimate Growth Tangled With Risk

It is worth emphasizing that the story of stablecoins’ growth is not due to illicit actors. Stablecoins have leapt from niche curiosity to one of the most important rails in the digital-asset ecosystem. Corporate treasury use, programmable payments, and cross-border settlement are real, legitimate applications. The institutionalization of stablecoins is underway, and traditional financial institutions are exploring issuance and integration. 

They combine the speed and reach of crypto with the stability of fiat. Yet the deeper story is more complex.

When one isolates stablecoins, their share of illicit activity is materially larger than their share of overall volume, potentially signaling disproportionate exposure. According to a fall 2025 report from blockchain analytics firm TRM, stablecoins made up around 30% of all on-chain volume in early 2025, yet accounted for 60% of illicit volume. 

Criminal actors are not aloof to the structural advantages of stablecoins: price stability, rapid global transfer, and blockchain-native transparency combined with anonymity.

PYMNTS covered over the summer how the Financial Action Task Force (FATF), a global organization targeting money laundering, terrorist and proliferation financing, reported that most on-chain illicit activity involved stablecoins.

Unlike bitcoin, which fluctuates wildly and leaves a trail that law enforcement has learned to follow, stablecoins offer exactly what bad actors want, which is typically price stability, dollar liquidity, and a degree of plausible deniability. The same traits that make them attractive to FinTechs in emerging markets also make them ideal for money launderers or sanctioned entities. The Chainalysis report pointed out that bad actors have shifted from holding or moving value in more volatile coins (such as bitcoin) to stablecoins in large part for these reasons.

See also: Stablecoins Fuel $36 Billion in B2B Payments as Issuers Eye Mature Markets 

The Corporate Playbook Is Evolving

While much of the optimism surrounding stablecoins comes from their grassroots adoption among retail users in emerging markets. But the next phase, the one now unfolding quietly inside corporate finance departments and FinTechs, could be even more transformative.

Large enterprises have begun exploring stablecoins not as speculative assets but as operational tools. The TRM report flagged B2B transfers made up the bulk of stablecoin payments over the first half of 2025 at $6.4 billion, while peer-to-peer consumer transactions were at $1.6 billion monthly, the report added.

For multinational firms, stablecoins offer instant settlement across borders without the delays or fees of Swift and correspondent banking. Treasury teams can move value between subsidiaries, contractors or vendors in different time zones within seconds, rather than waiting days. That speed is not cosmetic — it changes working capital management. Liquidity that was previously trapped in cross-border settlement pipelines can now be deployed more dynamically.

For CFOs and corporate treasurers, this level of control is novel. In traditional systems, liquidity and data move on separate rails — cash through banks, information through ERPs or APIs. Stablecoins unify them, creating a single digital object that carries both value and metadata. That convergence makes real-time auditing, reconciliation and cash visibility possible in ways banks have long promised but rarely delivered.

They are, in many ways, a pragmatic manifestation of financial innovation today: not speculative, but infrastructural.

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