Fintechs Circle, Block detail blockchain and AI strategies | PaymentsSource

• Key insights: Both Block and Circle are pursuing blockchain projects, with Block focusing more on Bitcoin than stablecoins.
• What’s at stake?: The GENIUS Act is expected to create a huge global market for digital assets.
• Look forward: Payment experts say banks will need to up their game to keep up.

the The law of genius It’s been nearly six months, but for Dante Disparte the benefits are just starting to show.

“It’s a landmark piece of legislation,” Desparte, chief strategy officer and head of global policy and operations at USDC issuer Circle, told American Banker. “It gives the United States something we haven’t had historically, which is a de facto national payments license.”

While the law is designed to give regulatory clarity to stablecoins, its impact goes far beyond that, indicating a favorable environment for stablecoins. Scope of digital assets Which can be used for payments and other financial services. US-based payment companies that have supported digital assets for years, such as Circle and Block, are racing to take advantage of the new environment by building networks that support not only payments, but a wide list of financial services that handle banking.

“We can do what we haven’t been able to do in my career in payments, which is get a field advantage for payments,” Disparte said. “It’s now about how you face this moment.”

What is the moment?

Although cryptocurrencies and stablecoins have been around for years, 2025 has brought a lot of interest, especially from banks trying to spot opportunities.

47% of banks said their customers want information about digital assets, while 35% said they want the ability to make payments using cryptocurrencies; 27% said customers ask banks to provide custody of digital assets, he said Research from American Banker.

Circle has taken several steps to respond to an increasingly inclusive digital asset market More banks And others Technology companies.

Recently launched Circle Payments Networkwhich connects financial institutions, challenger banks, payment companies and digital wallets, enabling payments to be processed instantly in different currencies and markets.

“Although we are widely known as a regulated stablecoin issuer, a lot of what we are doing now is ensuring how all of these payment options interact,” Disparte said. “The Circle Payment Network is a major initiative to coordinate cross-border money flows for a better payment coordination layer.”

The circuit you priced IPO In June, he also applied for National Trust Bank Charterwhich would enable it to provide custodial services under OCC regulations rather than a patchwork of government money transmitter licenses. The custody service will also include the representation of stocks and bonds on the blockchain network.

Desparte does not view Circle, or fintech-led stablecoins, as a threat or competitor to banks, countering concerns that digital assets will drain traditional bank deposits. “We say it’s an increased supply with banks,” Disparte said, noting that bank-backed stablecoins could boost transaction volumes and enable all payment service providers to access new markets and users. “Stablecoins can support bank balance sheet growth.” Circle is also expanding development to connect proxy trading to digital assets such as stablecoins.

“What we expect in time is there being a connection between stablecoins and proxy trading, and having a digital wallet that can access the trade on your behalf,” Desparte said.

In trying to build stable support for currencies, payment companies may have better luck with businesses than with consumers. Merchants are more interested in stablecoins as a way to avoid interchange fees, but the incentive for consumers is less clear, according to Aaron McPherson, principal at AFM Consulting. “It’s not clear what the incentive would be for consumers. Maybe if settlement were to happen, allowing merchants to charge an additional fee for using a reward card, that would make stablecoins relatively attractive by comparison, but there would have to be some incentive to use them,” McPherson told American Banker.

Cash bank

In block, CEO Jack Dorsey I have long supported Bitcoin, referring to it as the “native currency” of the Internet. Block supports stablecoins, but it does You have no plans To issue one of its own. Block has not seen high demand for stablecoin payments among its U.S. domestic payments vendors, but like many payment companies and banks, it is seeing demand for international stablecoin payments, Owen Jennings, Block’s business head, told American Banker.

“We’ve been focused on bitcoin, and we believe bitcoin is the best bet for moving money,” Jennings said. “It is open and resistant to censorship.”

In an effort to connect both sides of its business, Block recently launched a feature that enables sellers to accept bitcoin as payment, and a cash app map that consumers can use to discover merchants that accept bitcoin.

“This is a key area where we can combine Square and Cash App,” Jennings said of Block’s strategy to serve both consumers and merchants.

Block, which retains its original Square branding for its merchant-facing business, is also being integrated New forms of artificial intelligence With blockchain technology. “We have millions of customers who use Cash App as their ‘main bank,’” Jennings said, noting that the company has 50 million active cash users. “We can rely on that for proactive AI.”

New products include “bots” for consumers and merchants, using generative and agent AI to connect users to merchant services, financial products, and digital payment “buttons.”

“Most AI programs have the consumer prompt the AI ​​tool, so the user has to know the right question to ask,” Jenning said. “I don’t think this is the right direction. [Block’s] The bot has prompts about spending or how the user should approach investment diversification, for example. “We build proactive intelligence models on top of our data foundations.”

Room for banks?

The growth of fintechs that offer a mix of digital payments or transactions that rely on blockchain technology or artificial intelligence could pose a threat to banks, Tony DeSanctis, a senior director at Cornerstone Advisors, told American Banker.

DeSanctis said he tracks five major payment companies that have introduced debit cards in recent years — Affirm, Sofi, Block, PayPal and Chime — which total about 55 million debit cards.

“There are a total of a billion debit cards out there, so it doesn’t look that scary on a percentage basis,” DeSanctis said. “But these companies rose from zero to 55 million in five years, and perhaps less than that.”

These fintech companies are “picking the edges” of the banking market by targeting niche demographics amenable to fintech, such as younger consumers or digital natives.

“This gives these companies an advantage not only against big banks but also against community banks,” DeSanctis said.

Payment technology companies have also been at the forefront of developing cryptocurrency strategies and are pushing banks to respond.

“Companies like PayPal, Block and Circle are accelerating a direction the industry was already heading,” James Wester, director of payments at Javelin Strategy & Research, told American Banker. “Its impact is to identify the first practical use cases for AI and blockchain technology and then show how the technologies work in practice so that the rest of the industry can safely adopt them.”

These companies move faster than traditional banks in getting products to market, and once models are on the market, banks can pick and choose the right use cases and scale them within their more regulated and risk-averse environments, Javelin’s Wester said. “Over the next year, these companies will shape expectations simply by showing what is possible and influencing the direction of the market.”