New BlackRock report reveals a significant transformation in cryptocurrency, resulting in a single blockchain dominating the settlement layer.

Stablecoins were once seen as a convenience within the crypto space, providing a means to hold dollars between transactions without having to use fiat. However, the industry has evolved to the point where BlackRock now regards them as essential infrastructure for the market.

In its 2026 Global Outlook, the BlackRock Investment Institute stated that stablecoins are expanding beyond exchanges and becoming integrated within mainstream payment systems. It also suggested that they could grow in cross-border transactions and regular usage in emerging economies.

This perspective is significant as it alters the inquiries investors make, particularly when articulated by a reputable entity like BlackRock.

The issue at hand isn’t whether stablecoins are beneficial for crypto. Rather, it’s whether they are on the path to becoming a settlement mechanism that exists alongside, and occasionally within, conventional finance.

If that occurs, which blockchains will serve as the foundational layer for final settlements, collateral, and tokenized cash?

BlackRock presents the stakes clearly. “Stablecoins are no longer niche,” the report cites Samara Cohen, BlackRock’s global head of market development.

They are “becoming the bridge between traditional finance and digital liquidity.”

From trading tool to payment infrastructure

Stablecoins flourished in response to crypto volatility. Markets fluctuate, banks are closed on weekends, and exchanges depend on a fragmented array of fiat systems for redemptions.

<p Tokens pegged to the dollar addressed that operational issue by offering traders a 24/7 unit of account and a settlement asset.

BlackRock stresses that stablecoins have now surpassed that niche role. The firm indicated that integration into mainstream payment systems and international payments is a logical next phase, particularly in areas where latency, fees, and correspondent banking challenges remain persistently high.

One reason the timing appears favorable is regulatory. In the United States, the GENIUS Act was enacted on July 18, 2025, establishing a federal framework for payment stablecoins, which includes reserve and disclosure requirements.

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This kind of legal clarity doesn’t assure widespread adoption. However, it alters the risk assessment for banks, large retailers, and payment networks that must respond to compliance teams and regulators.

The market’s size is no longer a theoretical concept. The total value of stablecoins was approximately $298 billion as of January 5, 2026, with USDT and USDC still leading the market.

BlackRock’s report, utilizing CoinGecko data up to November 27, 2025, highlights that stablecoins reached record market caps even amid fluctuating crypto prices. It underscores their role as the primary source of “dollar liquidity and on-chain stability.”

This combination of legal acknowledgment and sheer volume is why stablecoins are beginning to appear in areas where they previously were absent, such as the backend of global payments.

Visa provided a tangible example in December 2025. The company announced it had initiated USDC settlements in the U.S., enabling issuer and acquirer partners to settle with Visa using Circle’s dollar stablecoin.

Visa noted that initial banking participants settled transactions over Solana. It framed this move as a means to modernize its settlement infrastructure with quicker fund transfers, availability seven days a week, and enhanced resilience during weekends and holidays.

Stablecoins are infiltrating the often unseen aspects of finance: settlement.

Settlement is where value accumulates

If stablecoins are now effectively digital dollars, the next inquiry is where these dollars reside as the system evolves.

As stablecoins advance toward more intricate applications, such as collateralization, treasury management, tokenized money-market funds, and cross-border netting, the foundational layer becomes increasingly important compared to marketing. This layer requires predictable finality, deep liquidity, robust tools, and a governance and security model that institutions can trust for decades rather than just a single cycle.

This is where Ethereum may come into play.

Ethereum’s value proposition in 2026 isn’t that it’s the least expensive chain for transferring a stablecoin. Numerous networks compete in that regard, and Visa’s Solana pilot serves as a reminder that high-throughput chains have a role in the ecosystem.

The argument for Ethereum is that it has evolved into the anchor layer for an ecosystem that differentiates execution from settlement.

Ethereum’s own documentation explicitly states this in relation to rollups, where Ethereum serves as the settlement layer that ensures security and offers objective finality if disputes arise on another chain.

So when users transact quickly and cheaply on L2s, the base chain continues to act as the referee. The more significant the value being settled, the more crucial the referee role becomes.

Tokenization is subtly guiding institutions toward Ethereum

BlackRock’s discussion on stablecoins also touches on the topic of tokenization. The report describes stablecoins as a “modest but significant step toward a tokenized financial system,” where digital dollars coexist with, and sometimes reshape, traditional channels of intermediation and policy transmission.

Tokenization transforms that abstract concept into a tangible reality. It involves issuing a claim on a real-world asset, such as a Treasury bill fund, on a blockchain.

Stablecoins subsequently serve as the cash component for subscriptions, redemptions, and secondary-market trading.

In this context, Ethereum remains the focal point. RWA.xyz indicates that Ethereum hosts around $12.5 billion in tokenized real-world assets, holding roughly a 65% market share as of January 5, 2026.

BlackRock itself contributed to that gravitational influence. Its tokenized money-market fund, BUIDL, was launched on Ethereum and later expanded to multiple chains, including Solana and various Ethereum L2s, as tokenized Treasuries emerged as one of the most evident real-world applications for on-chain finance.

Even with a multi-chain strategy, the institutional trend is clear: begin where liquidity, custody integrations, and smart contract standards are most advanced, then expand outward as distribution channels mature.

JPMorgan has been following a similar path. The bank introduced a tokenized money-market fund with shares represented by digital tokens on Ethereum.

It accepted subscriptions in cash or USDC and partially tied the initiative to the stablecoin regulatory shift that ensued after the GENIUS Act.

This indicates that stablecoins require more than just a rapid network for payments. They also demand a reliable settlement framework for tokenized collateral, yield-bearing cash equivalents, and institutional-grade finance.

Ethereum has emerged as the default solution for that demand, not because it excels in every metric, but because it has established itself as the settlement court where the most valuable cases are adjudicated.

The wager isn’t without risks

BlackRock’s outlook incorporates caution alongside opportunity. In emerging markets, it observes that stablecoins could increase dollar accessibility while potentially undermining monetary control if the use of domestic currency diminishes.

This presents a political economy issue rather than a technological one. It’s also the type of situation that can provoke stringent policy reactions precisely where stablecoins have found a product-market fit.

There are issuer risks as well. Not all stablecoins are identical, and market structure can hinge on trust.

S&P Global Ratings downgraded its assessment of Tether’s reserves in November 2025, citing concerns about transparency. It served as a reminder that the stability of the system can depend on the underlying assets backing the peg.

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Ethereum is also not guaranteed to be the sole important settlement layer. Visa’s USDC settlement initiatives indicate that major players are prepared to process stablecoin settlements over alternative chains when it suits their operational requirements.

Circle promotes USDC as being natively supported across a multitude of networks, a strategy that enhances the portability of stablecoin liquidity and diminishes reliance on any single chain.

However, portability has its drawbacks. As stablecoins proliferate, the emphasis shifts to layers that can offer credible settlements, integration with tokenized assets, and a robust security framework convincing enough for institutions to store real cash and collateral on-chain without risk of governance surprises.

This is why ETH is a likely candidate for the standard settlement layer for tokenized dollars. If stablecoins are indeed becoming what BlackRock suggests—a bridge between traditional finance and digital liquidity—then this bridge still requires a solid foundation.

Within the current structure of the crypto market, Ethereum remains the foundational layer that most institutions repeatedly turn to.

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