Disruptive Theme of the Week: Stablecoin

Fingers have been pointed, lessons have been learned, and changes are already being made to avoid similar events in the future. Binance quickly distributed $283 million in compensation to impacted users in two rounds of payments.

Stablecoins are a cash-equivalent digital asset issued by a private entity. In theory, they should hold their value relative to a traditional currency like the U.S. dollar. As such, they are backed by holding reserve assets.

Stablecoin-based payments settle immediately at lower execution costs; offer better transparency than standard banking; and can execute at any time. Stablecoins also provide expanded access and financial inclusion to the world’s unbanked population due to relying on digital wallets instead of on traditional bank accounts. The benefits of stablecoin and its ecosystem are further detailed in the table below compiled by McKinsey & Company.

Incidents like the flash-crash depeg threaten to undermine investors’ trust in stablecoin. However, more regulation behind stablecoin technology — such as the GENIUS Act. passed in July 2025 — is on the way to establish a better framework for consumer protections.

Companies like Circle Internet Group and PayPal are expanding their stablecoin offerings. Large tech companies such as Apple, Meta, and Google are expected to integrate more stablecoin functionality into their platforms. Big retailers such as Walmart and Amazon are looking into the idea of offering coins as well. While growth estimates vary, firms like Citi, Coinbase, and Standard Chartered predict $1 trillion–$2 trillion in transaction volume in stablecoin by 2028.

The other unique aspect of stablecoin, beyond facilitating payment and transactions, is the potential for yield generation.  DeFi-native stablecoin generates yield from sources such as short-term cash-equivalent instruments and lending. It offers more attractive yields, with some as high as 7%, than traditional finance-based cash alternatives like money markets. The yield generation component will also be a focus for regulators, along with consumer protections related to pegging and anti-money laundering (AML) regulations.  As institutional interest grows and regulatory frameworks develop, most agree that the potential for stablecoin integration beyond the DeFi ecosystem is enormous.

There are several stablecoin-related ETF filings in the works, including filings from Grayscale, Bitwise and Amplify. These products are expected to hold both publicly traded companies in the stablecoin ecosystem and ETFs holding the digital assets being utilized for on-chain solutions such as Ethereum and Solana.

There are a few ETFs currently in the market that offer indirect exposure to the stablecoin ecosystem. Blockchain ETFs like the actively managed Amplify Blockchain Technology ETF (BLOK A) and the Global X Blockchain ETF (BKCH A-) provide some of this exposure, holding key names such as Circle and PayPal.

The Invesco Alerian Galaxy Crypto Economy ETF (SATO B+) is another ETF with exposure to the stablecoin ecosystem and offers the additional benefit of holding crypto ETFs to get direct digital asset exposure.

Another ETF to consider is the Bitwise Crypto Industry Innovators ETF (BITQ A-) which provides publicly traded exposure to this theme. Finally, for leveraged exposure to the largest publicly traded stablecoin stock Circle Internet Group (the issuer behind USDC), there is the ProShares Ultra Circle ETF (CRCA ), offering 2X exposure.

If recent demand for U.S. spot Solana ETFs is any indication, there is investor demand for new plays on the crypto economy. Spot Solana ETFs have attracted a total of $568.24 million since the launch of the Bitwise Solana Staking ETF (BSOL) on October 28. As of November 25, there are now six ETFs holding total net assets of $936 million, many with initial fee waivers.

For more on the recent Solana ETF launches, read my colleague Roxanna Islam’s research article.

VettaFi LLC (“VettaFi”) is the index provider for BLOK and SATO for which it receives an index licensing fee. However, BLOK and SARO are not issued, sponsored, endorsed or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of BLOK or SATO.

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