Crypto-focused bank Anchorage Digital placed its bets on stablecoins last month when it unveiled plans to acquire stablecoin issuer Mountain Protocol for an undisclosed sum.
It’s been a big year for the novel technology, which is meant to maintain a stable value by being pegged to fiat currency like the U.S. dollar. Major stablecoin issuer Circle filed its initial public offering in May, and as of Wednesday its stock price has surged over 160%. Fiserv launched a stablecoin in collaboration with Circle on Monday; JPMorgan Chase launched a stablecoin-like token for institutional clients early this month; and the GENIUS Act – meant to create a regulatory framework for the tokens – is moving through the legislature.
Stablecoins are “cornerstone” to Anchorage’s long-term vision and “foundational” to the future of finance, CEO and co-founder Nathan McCauley said – “not just as payment tools, but as critical infrastructure that powers tokenized assets, decentralized finance, and next-generation financial products.”
In a recent email interview with Banking Dive, McCauley detailed his thoughts on how stablecoins are both foundational technology and a bridge to other innovations.
“[T]hey solve a real-world problem: enabling fast, transparent and programmable movement of value across borders, platforms and asset classes,” he said, and “they unlock the utility needed for the next wave of innovation, including tokenized assets, on-chain capital markets and real-time financial services.”
“Without stablecoins, tokenized assets don’t have a native settlement layer. Without stablecoins, programmable finance can’t operate at scale,” McCauley said. “So, while they may have started as a bridge between crypto and fiat, stablecoins are now becoming core plumbing in the digital financial system.”
Editor’s note: This interview has been edited for brevity and clarity.
BANKING DIVE: Which stablecoin models — fully fiat-backed, overcollateralized, algorithmic, etc. — are most viable at scale and why?
NATHAN MCCAULEY: At scale, fully fiat-backed stablecoins are the most viable today — particularly when issued under clear regulatory frameworks and backed by high-quality, short-duration assets like U.S. Treasuries. They offer transparency, simplicity and the predictability that institutions and regulators need to trust and adopt stablecoins at scale.
Overcollateralized models, like those used in DeFi, have a role to play — especially in crypto-native environments — but their capital inefficiency and volatility limits broader institutional adoption.
As for algorithmic stablecoins, the track record speaks for itself. Without credible, collateral-backed mechanisms, they introduce systemic risk and tend to fail under stress. That may evolve over time, but for now, they’re not ready for large-scale, real-world financial applications.
Ultimately, institutions are looking for stability, compliance and trust. Fully fiat-backed models check those boxes today — and they’re the foundation upon which broader innovation can responsibly build.
What are the biggest technical or operational challenges Anchorage Digital faces when supporting stablecoins today?
Some of our biggest challenges today aren’t purely technical, but rooted in the need for regulatory clarity. There have been significant steps forward in that direction. The Senate passing the GENIUS Act was a significant step forward, and hopefully once stablecoin legislation passes the House and is signed by the president, it will help facilitate stablecoin adoption while strengthening the U.S. dollar. We can’t lose sight of market structure reform since deciding which regulator has jurisdiction over which products and services will be critical to unlocking the clarity market participants need.
Another challenge is that not all stablecoins are built the same — and that variability has real operational consequences. From how tokens are issued and burned, to how they handle upgrades or integrate compliance controls, the technical design can vary significantly. That means we often have to tailor our infrastructure on a coin-by-coin basis to ensure the same level of security, traceability and institutional readiness.
And finally, there’s the 24/7 operational demand. Stablecoins don’t follow banking hours, and institutional clients expect real-time movement, compliance and reporting around the clock. Supporting that at scale, while maintaining regulatory-grade security and auditability, is a non-trivial undertaking.
How does Anchorage evaluate the credibility of stablecoin issuers?
Credibility in stablecoins comes down to three things: transparency, regulation and operational integrity.
At Anchorage Digital, we evaluate stablecoin issuers with the same rigor institutions apply to counterparties in traditional finance. That starts with transparency: do we have full visibility into the underlying reserves? Are the assets fully backed, held in high-quality, liquid instruments? And are the reserves subject to independent, regular attestation or audit?
We also look at regulatory posture. Is the issuer operating under a clear legal framework? Do they have the appropriate licenses? Are they aligned with global standards for compliance, risk management and disclosure?
Finally, we assess the issuer’s technical and governance infrastructure. Can the stablecoin be integrated securely into institutional workflows? Is the underlying protocol resilient? How are minting and redemption controlled?
For us, credibility isn’t just about market reputation — it’s about whether a stablecoin can meet the operational, regulatory and risk standards our institutional clients expect.
Where is there more demand for stablecoin infrastructure: institutional or retail? How has that shifted over time?
Historically, stablecoins gained traction on the retail and crypto-native side — used for trading, remittances and as a dollar proxy in emerging markets. But that’s changing fast.
Today, the fastest-growing demand is coming from institutions. We’re seeing asset managers, fintechs, corporates and even governments exploring stablecoins for treasury management, cross-border payments, instant settlement and on-chain fund distribution. What they need isn’t just access to stablecoins — they need the infrastructure to issue, hold, move and integrate them securely and compliantly.
That shift reflects a broader trend: stablecoins are evolving from a crypto tool to a core financial primitive. The infrastructure is following that trajectory — moving from retail wallets to institutional custody, compliance and operational tooling at scale.
In short: Demand started with retail, but the future is decidedly institutional.
Will there be just a couple big players, like PayPal USD, or will every bank/fintech issue their own? What is better?
We’ll see both, but ultimately we believe in a network model like the Global Dollar Network, where network participants share the rewards, and there’s a regulated issuer.
The key is that successful stablecoins will have proper regulatory frameworks and institutional-grade infrastructure. Not every bank or fintech firm needs to issue their own coin, but many will participate through partnerships or specialized applications.
What do you think the stablecoin industry will look like in a year? 10 years?
In a year, we expect the stablecoin landscape to be more regulated, more institutionally adopted and more globally relevant. You’ll see increased clarity from U.S. and international regulators, more banks and fintechs entering the issuance space, and growing demand for yield-bearing and tokenized cash equivalents built specifically for enterprise use.
In 10 years, stablecoins will be so embedded in the financial system that we won’t call them “stablecoins” anymore — they’ll just be part of how money moves. They’ll underpin everything from cross-border payments and capital markets settlement to real-time treasury operations and on-chain financial products. And they’ll be issued not just by startups but by central banks, major financial institutions and trusted fintech infrastructure providers.
What we’re witnessing now is the early formation of a new financial standard — one that’s faster, more transparent and natively digital. Stablecoins are the on-ramp to that future. Today’s payment system will look antiquated in comparison.
