[Digital Today reporter Chi-gyu Hwang] Crypto venture investment slowed sharply in the first quarter. Galaxy Research said crypto VC investment in the first quarter totaled about $4 billion and there were 355 deals. That was down 50 percent in value and 16 percent in deal count from the previous quarter. The number of newly formed crypto venture funds also fell to the lowest level since the third quarter of 2020.

But not all companies were hit in the same way. The decline was largely driven by fewer large late-stage rounds, while seed and early-stage investment continued. Late-stage companies drew 57 percent of total capital.

Crypto media WuBlockchain interpreted this as investors choosing companies with existing customers, revenue and real payment volume rather than those dependent on token prices or market sentiment.

It also highlighted stablecoin payment startups.

Stablecoin payments do not account for the largest share of crypto VC investment. In the first quarter, companies tied to exchanges, trading, investment and lending still raised the most, at about $2.6 billion. WuBlockchain said stablecoin payments are one of the few areas to produce consecutive sizable rounds despite a difficult funding environment.

A Federal Reserve survey showed stablecoin market capitalisation stood at about $317 billion as of April 6, up more than 50 percent from early 2025. Visa and Artemis adjusted data showed stablecoin transaction volume over the past 12 months was $10.2 trillion, up 63 percent from a year earlier. Of that, 36 percent came from exchange deposits and withdrawals. That means the figure cannot be treated as the same as real-world payments.

Even so, interest in stablecoin payment startups appears to be growing. The reasons VCs are focusing on stablecoin payments can be broadly summarised into five points.

First, cross-border payments have long suffered from inefficiency. The conventional approach takes multiple steps from the sending bank to the receiving bank, and settlement can take several days. Stablecoins can serve as a unified settlement asset that operates 24 hours a day.

Second, the revenue model is relatively clear. These companies have traditional fintech-style revenue structures such as transaction fees, foreign-exchange spreads and card issuance fees rather than relying on token price rises. Third, stablecoins are becoming an invisible backend tool. Felix Pago processes remittances via WhatsApp, and Rain links stablecoins to cards. Users may not even realise they are using stablecoins.

Fourth is regulatory change. In 2025, the United States passed the Genius Act to establish a federal regulatory framework for stablecoins. The Office of the Comptroller of the Currency also confirmed that banks can conduct stablecoin and digital-asset custody business. Fifth, exit strategies via mergers and acquisitions have become clearer. Stripe acquired Bridge in 2025 for about $1.1 billion, and Mastercard agreed in March 2026 to acquire BVNK for up to $1.8 billion.

There are also concerns about overheating. Critics say stablecoin transaction volume itself cannot be equated with payment volume, and some view the headline numbers as being lifted mainly by a handful of large rounds.

Technical barriers for on-chain payment APIs are falling rapidly, but global expansion still requires clearing banking, licensing and local regulations country by country, which is not easy in reality. Established financial companies such as Stripe and Visa may also enter this market directly.

WuBlockchain said this investment trend is neither a signal that the crypto funding winter is over nor a signal that stablecoins have already replaced existing payment systems. In its newsletter, it shared the view that investors are simply looking for companies that operate regardless of token prices, solve real financial problems and generate recurring revenue.