FROM UTOPIAN NARRATIVES TO FINANCIAL INFRASTRUCTURE: ENCRYPTION OF VC'S "SILENT" AND DIVERSION

Original by Suvashree Ghosh, Matt Haldane

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Not long ago, the encryption industry was chanting the slogan "Zone Chains, not Bitcoin", claiming that distributed bookkeeping technology would go beyond financial applications and completely reshape the Internet. However, recent financing trends show that cash remains the rule in the real world。

Since the early 2020s, when web3 and NFT booms retreated, the investment in encryption has clearly cooled. But one of the subdivisions in the market has been inversely attracting more and more venture capital - stable currency payments。

Stripe bought Bridge last year at $1.1 billion, an early signal that traditional financial institutions had started to set up stable currency payments. Since then, a number of start-ups, such as ARQ, KAST and RedotPay, have received new financing successively for cross-border payment routes and financial services based on stable currency. Last week, MasterCard bought BVNK for $1.8 billion, which is a testament to the strong interest of the market in this track。

“Initiatives associated with the stabilization of currencies are almost the hottest areas of current investment financing. Rob Hadick, a common partner in dragonflies capital, says, "Stabilized coins have emerged from the whole encryption industry as a few truly groundbreaking applications to achieve widespread reality."

According to Architect Partners, which focuses on annual encrypted financing reports, the total amount of encrypted payments-type corporate finance jumped to $2.6 billion in 2025, more than the sum of the previous three years. This number is expected to continue to climb this year, led by the acquisition of BVNK by MasterCard。

Encrypted payment of infrastructure finance: in 2025, the sum of corporate finance exceeded the previous three years

At the same time, private fundraising in the encryption industry as a whole increased from nearly $13 billion in 2024 to $20.4 billion in 2025, still below its peak of $27.6 billion in 2022。

Encoded Money Corporation Total Finance: The number of encrypted money financing transactions increased over the past year, but still falls short of the peak of 2022。

The two main areas in which private fund-raising is currently most concentrated are "investment and trading infrastructure" and "brokers and exchanges", all of which are financial applications. The payment infrastructure is third. In contrast, as a chain track at the heart of the Web3 and NFT booms, financing went from $3.76 billion in 2022 (about 14 per cent of total financing) to 2025, which was no longer a stand-alone statistical category。

In fact, total financing for the various decentrization applications (Web3 functional tiers) amounted to $5.2 billion in 2022, while in the 2025 report, only the consumption category DApp was retained, with only $864 million。

The breakdown of encrypted currency by sector: the payment sector is among the three main subsectors that attracted financing in 2025

The stabilization currency is building a better financial infrastructure for the block chain. Such tokens are usually anchored with the United States dollar at 1:1 and are valued at the bottom. Driven by the government’s pro-encryptist policy, the market’s enthusiasm for a stable currency reached unprecedented levels last year。

According to Artemis Analytics, in 2025 the total volume of stable currency transactions surged by 72 per cent to $33 trillion. The two largest stabilization currencies are the USDCs of Tether and Circle。

Circe stock prices were at their highest level in history on Tuesday, and investors were assessing possible adjustments to United States currency stabilization regulations and the impact of increased competition in the industry. But the central attraction of the stabilization currency remains clear: to transfer funds as efficiently as possible。

Cross-border payments continue to be slow, costly and absorbing significant amounts of money. Despite years of financial science and technology, cross-border transfers are highly dependent on the opening of pre-financing accounts in different jurisdictions。

"Stable currency has completely changed this pattern. Prajit Nanu, co-founder and chief executive officer of the cross-border payment company Nium, stated that "it allows real-time value to flow around the world without causing the same degree of financial efficiency loss, which is why investors see it as the next generation to pay for core infrastructure."

There are still strong gatekeepers in the industry. Large payment networks such as Visa and MasterCard have access to payment terminals. In his report, Eric F. Risley, founder and managing partner of Architect Partners, wrote that the issue of channel distribution "is a problem for every stable currency and related payment company."。

Trend in market share of cash transactions

By February this year, the share of coins in spot transactions in bitcoin had fallen to 27 per cent, and the share of whole currency transactions had dropped from 52 per cent to 32 per cent. Its share of the most profitable derivatives similarly declined significantly to 34 per cent。

Franklin Templeton, in collaboration with Ondo Finance, has launched an ETF monetization product, which can be traded 24/7 through encrypted wallets, bypassing decades of brokerage accounts and time-bound trading rules on which the Fund relies for investment。

Intercom Sound

"This event is now being held in Las Vegas, and the irony of the event has come to the fore. As Ben Johnson, the manager of the morning star company's customer settlement programme, put it bluntly, the industry “has completely crossed the red line between investment and gambling, with no room for manoeuvre”

THE ETF, WHICH WAS CREATED TO STREAMLINE INVESTMENT, IS NOW THE NEWEST VEHICLE FOR FINANCIAL GAMBLING IN THE UNITED STATES. ACCORDING TO BLOOMBERG INTELLIGENCE, 36 PER CENT OF THE 1,000 NEW FUNDS ISSUED LAST YEAR WERE LEVERAGED PRODUCTS OR ENCRYPTED RELATED FUNDS。