You might not realize it, but before long you're going to be using stablecoins — because the old global payment systems will soon evolve, perhaps even be replaced, driven by stablecoins.

Why it matters: Smart money is betting that stablecoins will be a trillion-dollar market soon, the only question is how many trillions and how fast it gets there.

• The driver is global payments, a process built on the slow and creaky system of correspondent banking. But until stablecoins came along there wasn't sufficient impetus to update it.

Zoom in: Circle, issuer of the second-largest stablecoin, USDC, announced the Circle Payments Network last week. It looks like the most straightforward bid to sit at the center of trillions of dollars in money sloshing all over the world.

• Ananya Kumar, of the Atlantic Council, reads Circle's goals more modestly. "A goal here is to create interoperability and reduce frictions," she said. She doesn't see an imminent threat to SWIFT, the bank-to-bank messaging system at the heart of today's global payments system.
• "There's something like $1.8 quadrillion in value when it comes to global payments," Kumar says. "The volumes are far from this transplanting of SWIFT happening."

The big picture: Collectively, stablecoins are already a rival for Visa, a private network that connects banks, merchants, consumers and businesses around payments.

• Tether is king of stablecoins, for now. The company is talking about bringing the fight for stablecoin dominance to the U.S., possibly by attempting to create a new point-of-sale system designed-for-compliance stablecoin.

Yes, but: Disrupting SWIFT or Visa is a much bigger game. Arguably, if one of these companies do that (or anything close to it), Tether could end up a kingdom that's been subsumed by an empire.

Big banks have clearly been eyeing stablecoin technology for years, but until recently had avoided the inevitable headaches from regulators. But the regulatory landscape has changed:

• Europe has basically already written clear rules for stablecoins with its MiCA framework. A new law in the U.S. appears to be months, not years, away.
• Traditional finance firms are now making moves.

State of play: ING Direct and other banks in Europe reportedly want to create a stablecoin.

• Bank of America is the one that got VISA going starting back in 1958, so its announcement this year that it will be ready to go when stablecoins get the all clear could be telling.

PayPal has bet on increasing the utility of its stablecoin, PYUSD, because it believes the instruments open a universe of new kinds of business, starting at the enterprise level and in cross-border transfers.

• The first mainstream fintech to issue a stablecoin is passing on a big disruption in the payments system, however.
• "We think new payment rails will exist with old payment rails," Jose Fernandez da Ponte, PayPal's lead on digital assets, tells Axios.

What we're watching: Big, established companies are terrible at disrupting their own businesses. It remains to be seen whether stablecoins will disrupt the current payments system, or simply become integrated into its backbone infrastructure.

The bottom line: Whichever way it goes, the infrastructure built for stablecoins today will be everywhere, powering the future, and someone — a new king — will run it all.

Go deeper

Worthy of your time: Stablecoins on Bitcoin transact without politics

Stablecoins have emerged as one of the hottest categories of crypto infrastructure to invest in, even as other corners of the market are digging out of a two-year slump.

The big picture: More transparent rules are coming on both sides of the Atlantic, thanks to updates to MiCA in the EU and a pending stablecoin bill in the U.S.

M&A deals

Strategic buyers are looking to acquire licenses and strengthen their stablecoin stack before those rules go live.

• Last October, Stripe paid about $1.1 billion for Bridge, in an effort to fold the startup's stablecoin settlement rails into its merchant stack.
• In December, Tether bought an undisclosed minority stake in Dutch issuer StablR, gaining a board seat to fast-track a MiCA-compliant euro stablecoin.
• Paxos closed its takeover of Finland's Membrane Finance in early February, acquiring the EUROe issuer to secure an EU e-money license.
• In March, MoonPay acquired Iron, a U.K.-based token-infrastructure shop, in a reported low-nine-figure deal to strengthen its stablecoin APIs.

VC deals

VCs, meanwhile, are racing to lock in equity before valuations catch up to the sector's growth.

• In early December, usdx.money raised $45 million at a $275 million valuation to build fiat-backed USDX rails for Asian exchanges.
• A week later, HongShan and Peak XV co-led a $10 million seed round for KAST, a stablecoin-powered neobank targeting 150 emerging-market jurisdictions.
• Haun Ventures led a $50 million Series B in BVNK (at a $750 million valuation) to scale its stablecoin-based treasury-and-payouts platform in mid-December.
• Just before Christmas, Avalon Labs raised a $10 million Series A round to launch USDa, a Bitcoin-backed yield-bearing stablecoin.
• In February, Framework Ventures led a $24 million Series A for Plasma, a purpose-built Layer-1 that settles stablecoin transfers.
• On March 19, Kindred Ventures led a $3.5 million seed round for Stable Sea, which provides API-based stablecoin off-ramps.
• Rain raised $24.5 million a week later to expand its issuing footprint for stablecoin-based payroll cards.

Ryan Lawler covers Fintech for Axios Pro Deals. For a steady diet of scoops and smart analysis, talk to our sales team.

Custody professionals showed up Friday at the SEC to urge the agency to create principled regulations around the business of safeguarding digital assets, while also urging it not to specify technological solutions.

• Why it matters: Digital assets are bearer instruments, and the industry has had a lot of failures in terms of keeping those bearer instruments safe.

Between the lines: Custody is the core idea of cryptocurrency.

• Before Bitcoin, there was no way for an individual to hold value digitally on their own.

The big picture: Very few investors want to hold these assets themselves, however. Especially gigantic, heavily regulated investors.

Between the lines: The fact that not all digital assets are under the SEC's purview is going to complicate rulemaking: The SEC only has authority over securities, and it looks likely that very few digital assets will be securities in the end.

• Which could mean that there's two different rules for safeguarding assets that — from a custodian's perspective — are basically the same.

Friction point: One issue that seemed to spark some dispute on the panel was how customer assets should be segregated. They could have all the funds mixed but the separate amounts logged in off-chain accounts, or they could constantly rebalance between thousands of individual wallets.

• Mark Greenberg, Kraken vice president, argued that mixing is less prone to security lapses. "The less crypto moves around, the less people have to approve things [and] move it around the better."
• Though others pointed out that this raises issues with dealing with the external world.

What we're watching: Only one panelist was there to speak for self-custody, the concept invented with Bitcoin, where a person can steward their own assets.

• "What we really want to do is preserve the option for end users to be able to custody their own assets," Veronica McGregor, of Exodus Movement, a digital wallet maker, said on the panel.

🍱 How the Trump meme-coin dinner drove a feeding frenzy in the markets. (Washington Post)

💔 Details on the sweetheart deal Trump-connected World Liberty Financial sought from crypto companies to make investments. (New York Times)

✂️ The Fed ditched its special guidance to banks it regulates for crypto related activities. (Axios)

🛑 Senators pushed back on the Trump token dinner, alleging "pay to play" corruption. (CNBC)

🚔 Long (too long) story about how young hackers turn big profits out there. (New York Times)