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The Tokenization Files, Part 2

The Tokenization Files, Part 2

The Foundation that Made Everything Possible

Shelby Cannon
April 03, 2026

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The Dollar Arrived First 💵

Stablecoins were supposed to be a crypto experiment. They became the foundation of the entire tokenization story.

Series note: This is Part 2 of The Tokenization Files, Solid Right's ongoing deep dive into the tokenization of real-world assets. Part 1 introduced the roadmap. This issue goes inside Phase 1 — the infrastructure that made everything else possible.

Start with a number that should have been bigger news: $33 trillion. That is the volume of stablecoin transactions that settled on blockchain rails in 2025 — a 72% increase from the prior year, and a figure that now rivals the annual throughput of the world's largest card networks. The stablecoin market itself hit $320 billion in circulating supply by early 2026, up from $202 billion at the start of 2025.

These are not crypto numbers anymore. They are financial infrastructure numbers.

The Foundation 🗻

Stablecoins were the unglamorous first chapter of the tokenization story. The question Phase 1 had to answer was basic: can blockchain handle real money at scale, with the reliability institutions require? The answer arrived quietly, in transaction volumes and supply growth that most of the market was too focused on price action to notice. The proof of concept is not coming. It is done.

The mechanics are worth understanding because they explain why every subsequent phase of tokenization is possible. A stablecoin is a tokenized dollar — a digital representation of fiat currency on a blockchain, backed one-to-one by reserves held in cash or short-term Treasuries. What blockchain adds is programmability, 24/7 availability, near-instant settlement, and global reach without a correspondent bank in the middle. B2B stablecoin payments surged from under $100 million monthly in early 2023 to over $6 billion by mid-2025. Visa's stablecoin settlement volume hit a $4.5 billion annualized run rate by January 2026. These are not pilot programs. They are production systems.

The Institutions 🏢

The institutional signal is now impossible to ignore. Eighty-one percent of crypto-aware small and medium businesses expressed interest in using stablecoins in Coinbase's 2025 State of Crypto research. The number of Fortune 500 executives saying their companies planned to use or explore stablecoins increased more than threefold year over year. Nine major global banks — including Goldman Sachs, Citigroup, Deutsche Bank, and Bank of America — began exploring stablecoin launches on G7 currency rails. The passage of the GENIUS Act in mid-2025 established the federal framework that gave institutions the regulatory cover to move from interest to action.

The geographic picture adds another dimension. Stablecoin adoption is not a US story. Emerging markets are the fastest-growing segment, driven by a simple and urgent use case: access to a stable dollar in economies where local currency volatility is a lived reality rather than an abstract risk. Remittance platforms built on stablecoin rails are processing transfers at a fraction of the cost of traditional services. The average stablecoin peer-to-peer transfer is $47. The average traditional remittance is $250. That gap is not a product feature — it is a structural advantage that compounds with scale.

The Metrics 🔢

The honest caveat is worth stating clearly. A large share of that $33 trillion in transaction volume is still tied to crypto trading and market structure activity rather than real-world commerce. The signal that genuine adoption is taking hold is not raw volume — it is repeat behavior. Repeat merchants. Retained wallets. Recurring payments. Those metrics are growing, but they are growing from a smaller base than the headline numbers suggest. The infrastructure is real. The mainstream payment adoption is still in early innings.

What Comes Next 🔮

The smart money question this raises: the value in stablecoin infrastructure accrues to the issuers — Circle and Tether — not to the token holders. Circle's potential IPO, and the broader buildout of stablecoin-native payment rails by Visa, Mastercard, and PayPal, is where the investable opportunity sits in this phase.

Next issue: Institutions got serious in Phase 2. We go inside the tokenized Treasury market — how it grew from $2 billion to over $12 billion in 18 months, what BlackRock's BUIDL fund actually proved, and why the world's largest asset managers are competing to put government bonds on a blockchain.

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COIN SPOTLIGHT 🔍️

Spotlight: Coinbase (COIN) 🌕️

Stablecoins proved the model. Coinbase built the on-ramp, the custody layer, and increasingly the compliance infrastructure that makes the model accessible to institutions. As the tokenization series moves through its phases, Coinbase appears at almost every layer — and that ubiquity is not accidental. It is the most direct public market proxy for the infrastructure that makes stablecoin adoption and tokenization possible at institutional scale.

The Bridge 🛣️

USDC, the stablecoin issued by Circle, runs on infrastructure that Coinbase helped develop and continues to support through its exchange and custody operations. Coinbase Prime holds assets for BlackRock's BUIDL fund. Coinbase's institutional custody arm is increasingly the default call for traditional financial institutions that need regulated digital asset custody with the compliance standing to satisfy their own boards and regulators. When Citi and Morgan Stanley began building Bitcoin custody infrastructure in 2026, they were entering a market Coinbase has been building for years.

The business is real and growing. Coinbase generates revenue from transaction fees, custody fees, stablecoin revenue sharing with Circle, and increasingly from its institutional services. It is also publicly traded, regulated, and operating under the most scrutinous compliance regime of any crypto-native company — which is precisely why institutions trust it enough to give it their assets.

The risks are equally real. Coinbase is heavily exposed to crypto market volatility — its transaction revenue collapses in bear markets and surges in bull markets, creating earnings that are difficult to predict or value using traditional frameworks. Its regulatory standing, while strong relative to crypto peers, remains subject to ongoing regulatory evolution in the US market. And the competitive landscape is intensifying, with traditional financial institutions building custody capabilities in-house rather than outsourcing to Coinbase indefinitely.

But for public market investors who want exposure to the stablecoin infrastructure story, the tokenization custody story, and the institutional digital asset adoption story in a single regulated vehicle, Coinbase is currently the cleanest available option.

IPO Watch 🔍️

Circle is the company most investors in the stablecoin space cannot yet buy. The issuer of USDC — currently at $78 billion in circulating supply and growing — generates hundreds of millions annually in interest income from the Treasury reserves backing the stablecoin. Its revenue model is straightforward and highly profitable: hold short-term Treasuries against the USDC supply and collect the yield. The GENIUS Act's federal framework for stablecoin issuers has strengthened Circle's compliance positioning and accelerated its preparation for a public listing. A Circle IPO would represent one of the most direct pure-play investments available in the stablecoin infrastructure layer. Watch the filing.

Until next time ….

— Solid Right

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