How does BlackRock’s involvement in Bitcoin relate to the future of global payment systems?

Why BlackRock’s Bitcoin Clients Aren’t Backing the Case for Global Payments

Introduction

Bitcoin’s 2024-2025 mainstream breakthrough came via Wall Street, not point-of-sale. BlackRock’s spot Bitcoin ETF attracted tens of billions in assets, validating BTC as an investable macro asset. Yet the same clients flocking to IBIT aren’t pushing Bitcoin for global payments. For crypto-native builders, the message is clear: institutional demand is strong for “digital gold,” but payment rails are being built elsewhere-primarily on stablecoins and tokenized assets.

Bitcoin via ETFs: A Store-of-Value Trade, Not Spendable Money

Most BlackRock buyers are mandates-driven allocators-RIAs, wealth platforms, hedge funds, and some corporates-optimizing portfolios, not checkout flows. The ETF wrapper solved custody, liquidity, and compliance for exposure. It didn’t solve payments.

– Bitcoin is being used as:
– A macro hedge and high-beta risk asset
– A diversifier with 24/7 price discovery
– A liquid, regulated exposure via brokerage accounts

– Bitcoin is not being used as:
– A medium of exchange for merchants
– A treasury settlement rail for corporates
– A compliance-friendly cross-border network

Larry Fink has repeatedly framed Bitcoin as “digital gold,” while BlackRock’s tokenization efforts (e.g., its BUIDL fund on Ethereum) point to stable, programmable dollars as the near-term settlement stack-not BTC on L1.

Institutional Frictions That Undercut Bitcoin Payments

1) Taxes and Accounting Still Favor Holding Over Spending

– In the U.S., every BTC spend is a taxable event, creating capital gains tracking headaches for enterprises and consumers. No broad federal de minimis exemption exists as of 2025.
– FASB’s 2023 fair-value update (effective 2025) improved balance-sheet treatment for holding crypto, aiding treasuries. But it doesn’t remove the pain of realizing gains on every payment.

2) Fees, Throughput, and UX Remain Volatile

– Base-layer fees spiked during the 2024 halving/Runes launch, with priority transactions briefly costing tens of dollars or more. Payment certainty requires predictable, low fees.
– The Lightning Network reduces costs and latency, but enterprise-grade liquidity management, routing reliability at scale, and operational tooling are still evolving. Capacity growth has been uneven, and vendor standardization is limited.
– CFOs want settlement predictability and strong SLAs; today’s BTC payment stack can’t consistently guarantee this at global commerce scale.

3) Compliance, Counterparty Risk, and Reversibility

– Regulated institutions must screen counterparties, satisfy Travel Rule requirements, and manage sanctions exposure. Open, irreversible funds transfer directly to self-custody addresses is a policy red flag.
– Lack of built-in dispute resolution and refund workflows conflicts with consumer-protection expectations.

Stablecoins and Tokenization Are Winning the Payments Narrative

Stablecoins provide the dollar-denominated certainty finance teams need, while keeping on-chain settlement speed.

– Circle’s USDC and Tether’s USDT collectively exceed $160B in circulating supply in 2025, and on-chain stablecoin transfer volumes reach trillions of dollars annually.
– Payments giants are integrating stablecoins:
– Visa has enabled USDC settlement with partners and expanded to faster chains.
– Stripe reintroduced crypto by enabling stablecoin payments and payouts across major networks.
– PayPal launched PYUSD, extending stable-dollar rails to a massive consumer base.
– BlackRock’s own tokenization push (e.g., BUIDL on Ethereum, which surpassed $1B in 2024 and continued growing in 2025) aligns with programmable dollars and tokenized Treasuries-not BTC as a payment rail.

What Would Have to Change for Bitcoin to Compete in Global Payments?

1) Policy and tax fixes
– A clear U.S. de minimis exemption for everyday crypto spends.
– Standardized guidance for Travel Rule compliance with self-custody endpoints.

2) Fees and scale predictability
– Sustainable L2 routing liquidity and enterprise service-level guarantees.
– Smoother on/off-ramps that hedge BTC volatility during checkout in real time.

3) Enterprise-grade compliance and ops
– Address reputation, screening, and blacklisting compatible with institutional policies.
– Reversible payment constructs at the application layer (escrow/hold-release) and auditable workflows.

4) UX that matches cards and bank rails
– Consumer-grade recovery, invoicing, refunds, and disputes without exposing users to UTXO complexity.
– Integration paths for ERPs and treasury systems comparable to stablecoin rails.

5) Clear value over stablecoins
– A compelling reason to accept BTC volatility or additional complexity-such as censorship resistance for high-friction corridors-where stablecoins can’t operate.

The Realignment: Bitcoin as Reserve Asset, Stablecoins as Settlement

The market has bifurcated:
– Bitcoin is the reserve asset play-scarce, bearer, politically neutral, increasingly institutionally held via regulated wrappers.
– Stablecoins and tokenized funds are the programmable settlement layer-fiat-denominated, high-throughput, and compliance-extensible.

BlackRock’s clientele reflect this reality. They buy BTC exposure for macro and portfolio reasons. When they need programmable money for commerce, they look to USD stablecoins and tokenized treasuries on networks with robust developer tooling and compliance hooks.

Conclusion

BlackRock’s Bitcoin clients aren’t championing BTC for global payments because the incentives-and the plumbing-don’t line up. Taxes, fee volatility, compliance burdens, and enterprise UX gaps make Bitcoin a better reserve asset than a retail or B2B payment rail in 2025. Meanwhile, stablecoins and tokenized assets are scaling real-world settlement. For builders, the opportunity isn’t to force Bitcoin into a role institutions don’t want; it’s to double down on its strengths while borrowing the best ideas-speed, programmability, compliance-from the stablecoin and tokenization stack.