Crypto OTC Is Booming as Institutional Demand Moves Beyond the Block Trade

Stablecoins are changing the institutional OTC market in a way that is easy to miss if OTC is still viewed mainly through large block trades. EY-Parthenon surveyed 350 corporate and financial-services executives in 2025 and found that 13% were already using stablecoins, while more than half of non-users expected to adopt them within the following 6 to 12 months. The shift matters because more institutional flows are beginning to look like payments, treasury and operating activity rather than directional crypto positions.

Among organizations already using stablecoins, EY-Parthenon found that 41% reported cost savings of at least 10%, primarily in B2B cross-border payments. That makes the institutional use case less about finding the next asset to trade and more about moving value reliably between digital and traditional financial rails. As those workflows mature, the quote is only one part of the service being evaluated.

The result is a market in which execution remains essential, but execution alone is no longer enough to explain why clients stay with one provider rather than another. Settlement, capital positioning, access to local currencies and the ability to repeat transactions without rebuilding the process each time increasingly shape the commercial value of the service. These capabilities matter most when digital-asset liquidity is deep but the financial infrastructure around the client is fragmented.

Those surrounding capabilities are also harder to copy because they depend on relationships, operating history and capital already positioned in useful places. This is especially visible in emerging markets and payment flows, where a transaction may have to cross several financial systems before it is actually complete. The interesting question is therefore no longer simply who can quote the trade, but who can make the whole transaction work reliably.

To streamline these recurring settlements without rebuilding processes daily, enterprises are leveraging specialized B2B stablecoin infrastructure platforms to manage compliance and payment orchestration.

OTC Value Is Moving Beyond the Quote 

The traditional OTC use case remains important. A fund that wants to execute a very large Bitcoin or Ether position may prefer a bilateral quote because exposing the full order to a public book could create market impact or reveal its intentions. An OTC desk can absorb that problem by providing a firm price for a defined size and managing the resulting risk across its own inventory and other venues.

For a client, making that kind of trade, discretion and certainty still have obvious value. But that model no longer explains all of the institutional activity moving through OTC infrastructure. A payments company, for example, may receive USDT from customers in several countries and need to convert part of that balance into Mexican pesos, Reals or another operating currency at the end of each day.

The company is not making a directional bet on the stablecoin, and the transaction may not be unusually large by institutional trading standards. Its difficulty is making the conversion reliably and settling the required fiat into the correct account. It also needs the same workflow to work again tomorrow without maintaining trading relationships and balances across a long list of venues.

For that client, a competitive price remains necessary but does not describe the entire transaction. Two OTC providers may quote within a few basis points of each other while offering very different experiences once execution begins. One may require prefunding, manual coordination with several counterparties and settlement that depends heavily on local banking hours.

Another provider may already have the liquidity and relationships needed to complete the conversion through one operating workflow. It may not win because it quoted dramatically tighter, but because it removed more operational work from the client’s side. Once the flow repeats every day, those differences become part of the economics of the service.

This is why declining spread capture does not necessarily imply that OTC is becoming less valuable. It may instead show that the simplest part of the product is becoming more commoditized while competition moves into areas that are harder to replicate. That is particularly relevant to crypto OTC trading, where institutional providers increasingly combine institutional liquidity with rapid settlement and access to major and emerging-market fiat currencies.

Pricing technology can be improved relatively quickly, but settlement relationships and capital positioning take much longer to build. The value of the provider increasingly depends on how much of the surrounding complexity it can absorb. In practice, the desk is being judged not only on whether it can quote a trade, but on whether the client can rely on the transaction to settle as expected.

Global Crypto Liquidity Still Has a Local Problem

Stablecoins have made dollar-denominated value unusually portable. A business can move USDC or USDT between wallets and jurisdictions without relying on a correspondent banking chain for every transfer. That is one reason institutions increasingly view stablecoins as tools for cash management and payments rather than purely as trading instruments.

BIS research published in 2026 found that more than 70% of fiat-to-stablecoin conversions in its sample originated from non-US-dollar currencies. The study covered four major dollar-pegged stablecoins traded against 27 fiat currencies across 64 exchanges. That finding matters because a dollar stablecoin can be globally liquid while the surrounding FX and local-fiat conversion still remain fragmented.

A digital dollar may be globally available, but the currency a company needs to pay employees, suppliers or merchants usually is not. A payment company can transfer USDT on a Sunday, yet that does not guarantee that meaningful local fiat can be delivered with the same speed or depth. The crypto side of the transaction may have thousands of potential counterparties and deep liquidity across international exchanges.

The final fiat leg can depend on a much smaller group of banks, brokers and local market participants. Global access to the asset therefore does not automatically produce global access to usable money. That difference becomes more important outside the deepest dollar and euro markets, where the available capacity for a specific local currency can be much narrower.

Settlement windows, bank operating hours, local regulation and the number of available counterparties can all affect whether global crypto liquidity can actually be delivered where the client needs it. Emerging markets make these gaps easier to see because the difference between digital-asset liquidity and local financial liquidity can be much wider. They also expose whether a provider has enough local market knowledge to understand where bottlenecks are likely to appear.

A sophisticated trading stack is much less useful if the last step into local fiat repeatedly becomes the weak link. The IMF’s 2026 work on Nigeria shows how quickly stablecoins can become embedded in cross-border activity when local currency and payment frictions are high. Stablecoins accounted for more than 65% of the country’s crypto inflows in 2024, according to the IMF.

The IMF also noted that small and medium-sized importers were increasingly using stablecoins to pay overseas suppliers, while some larger firms were experimenting with them for trade settlement. Those are not classic speculative trades. They are operating flows, and their success depends on whether digital dollars can be converted, settled and reused inside the local financial system.

Capital in the Wrong Place Is Not Useful Liquidity

Balance-sheet strength also looks different once the transaction crosses several markets. A liquidity provider with substantial capital has more ability to warehouse risk, support larger flows and continue quoting during difficult conditions. But the total size of the balance sheet does not reveal where that capital is actually available.

In fragmented markets, location matters because money cannot always be moved instantly between venues, currencies and jurisdictions. A firm may have significant dollar and stablecoin balances across major exchanges but limited access to one local currency late in the trading day. It can look comfortably capitalized on paper while still being constrained in the market where the client needs liquidity.

The firm may have more than enough capital in aggregate to support the transaction, yet converting and settling that capital through the required local corridor could take longer than the client’s operating needs allow. That creates a capital-management problem that is easy to overlook when OTC is discussed only in terms of execution size. Providers have to anticipate where balances are likely to be needed and how quickly one-sided client flow can build.

Some liquidity must be positioned before demand becomes visible because waiting until the client requests the trade may already be too late. The provider also needs a realistic view of how quickly capital can move if one corridor suddenly becomes busier than expected. Forecasting and distribution therefore become part of execution quality rather than a separate treasury concern.

Firms with repeated flow in the same markets can gain an advantage because operating history improves the way capital is positioned. The same issue explains why extremely fast blockchain settlement does not automatically translate into an extremely fast institutional transaction. A stablecoin transfer may reach finality quickly, but the client may still be waiting for fiat funds, reconciliation or another part of the transaction to clear.

For businesses using crypto as working capital rather than as an investment, the more meaningful measure is when the money becomes available for its next intended use. Measuring only the digital leg can make an apparently efficient workflow look better than it actually is. The relevant endpoint is operational, not simply technical.

The Hardest Institutional Trade May Not Be the Largest One

Crypto OTC is still commonly associated with exceptionally large tickets. A $50 million Bitcoin purchase clearly requires institutional execution capabilities because market impact, pricing and risk management become difficult at that size. But recurring stablecoin flow can create a different kind of complexity even when each individual transaction is much smaller.

A payment company converting several hundred thousand dollars every day across multiple currencies may demand more operational infrastructure than a fund executing one large trade every quarter. A one-off block can tolerate manual coordination, bespoke settlement instructions and significant attention from traders. Repeated conversions cannot depend on that kind of process.

A company processing similar transactions every day eventually needs API connectivity, known counterparty limits, predictable settlement arrangements and enough capacity for the process to continue working when volume increases unexpectedly. The operational standard rises because the trade becomes part of the client’s normal business rather than a special event. Reliability becomes part of the product.

The most demanding client may therefore not be the one making the largest individual trade, but the one expecting an ordinary transaction to work hundreds of times without disruption. Payments businesses, fintech platforms and treasury teams value consistency because the trade is embedded inside another commercial activity. A failed or delayed conversion can create problems far beyond the trading desk itself.

Stablecoins are accelerating that transition because they are increasingly being used as working capital rather than simply as a bridge between crypto trades. Once a company regularly receives, holds or pays digital dollars, conversion into local currency stops being an occasional trading decision and becomes part of normal treasury operations. That creates demand for infrastructure capable of connecting crypto liquidity with bank accounts and local currencies repeatedly.

The emerging OTC market therefore looks less like a collection of private block desks and more like a network connecting different forms of liquidity. Exchanges, market makers, stablecoins, banks, local currencies and payment systems can all become parts of the same transaction even though they operate on different infrastructure and different schedules. Price remains important, but increasingly it is only the entry point into a much larger service.

Competitive pricing is becoming easier to compare, while dependable liquidity across currencies, markets and settlement systems remains difficult to build. Emerging markets expose that difference particularly clearly because they force providers to prove that global digital liquidity can actually become useful local money. That is a harder capability to advertise in a single number, but it may be a much stronger source of differentiation.

Final Word

The next phase of institutional crypto OTC will be shaped less by the spectacle of the largest block trade and more by whether providers can make complex money movement routine. Competitive pricing is already easier to compare. What remains harder to replicate is dependable settlement, capital in the right markets and access to the currencies clients actually need.

As stablecoins move deeper into payments and treasury workflows, those operational differences become more important. The strongest OTC infrastructure will be the infrastructure that lets a client move between digital assets and local money without rebuilding the process each time. In emerging markets especially, that ability may prove more valuable than shaving another fraction from the quoted spread.