Authors: [email protected], [email protected]
The global financial system is in the midst of a profound transformation. Traditional payment networks are facing a full-scale challenge from emerging alternatives - stablecoins, due to outdated infrastructure, lengthy settlement cycles and high fees. These digital assets are rapidly revolutionizing the way value flows across borders, how businesses transact and how individuals access financial services.
Over the past few years, stablecoins have continued to develop and become an important infrastructure for global payments. Large fintech companies, payment processors and sovereign entities are gradually integrating stablecoins into consumer-facing applications and corporate funding flows. At the same time, a series of emerging financial tools, from payment gateways to deposit and withdrawal channels, to programmable income products, have greatly improved the convenience of using stablecoins.
This report deeply analyzes the stablecoin ecosystem from both technical and commercial perspectives. It studies the key players shaping this field, the core infrastructure supporting stablecoin transactions, and the dynamic needs driving its application. In addition, it also explores how stablecoins can give rise to new financial application scenarios and the challenges they face in the process of being widely integrated into the global economy.
To explore the impact of stablecoins, we first need to examine traditional payment solutions. These traditional systems include cash, checks, debit cards, credit cards, international wire transfers (SWIFT), automated clearing houses (ACH), and peer-to-peer payments. Despite their integration into everyday life, the infrastructure for many payment rails, such as ACH and SWIFT, has been in place since the 1970s. Although groundbreaking at the time, today much of this global payment infrastructure is outdated and highly fragmented. In general, these payment methods suffer from high fees, high friction, long processing times, lack of 24/7 settlement, and complex back-end procedures. In addition, they often come bundled (for a fee) with unnecessary additional services such as identity verification, lending, compliance, fraud protection, and bank integration.
Stablecoin payments are effectively addressing these pain points. Compared with traditional payment methods, using blockchain for payment settlement greatly simplifies the payment process, reduces intermediaries, and enables real-time visibility into capital flows, which not only shortens settlement time but also reduces costs.
The main advantages of stablecoin payments can be summarized as follows:
Real-time settlement: Transactions are completed almost instantly, eliminating delays in traditional banking systems.
Safe and reliable: The blockchain's immutable ledger ensures the security and transparency of transactions, providing protection for users.
Reduced costs: Removing intermediaries significantly reduces transaction fees, saving users money.
Global Coverage: Decentralized platforms can reach markets that are underserved by traditional financial services (including the unbanked) and achieve financial inclusion.
The stablecoin payment industry can be divided into four technology stack levels:
The application layer is mainly composed of various payment service providers (PSPs), which integrate multiple independent deposit and withdrawal payment institutions into a unified aggregation platform. These platforms provide users with convenient stable currency access, provide tools for developers developing at the application layer, and provide credit card services for Web3 users.
a. Payment Gateway
Payment Gateway is a service that facilitates transactions between buyers and sellers by securely processing payments.
Well-known companies innovating in this field include:
Stripe：A traditional payment provider that integrates stablecoins such as USDC for global payments.
MetaMask：It does not provide direct fiat currency exchange functions, and users can realize deposit and withdrawal operations through integration with its third-party services.
Helio: 450,000 active wallets and 6,000 merchants. With the Solana Pay plug-in, millions of Shopify merchants can settle payments with cryptocurrencies and instantly convert USDY into other stablecoins such as USDC, EURC, and PYUSD.
Web2 payment applications such as Apple Pay, PayPal, Cash App, Nubank, and Revolut also allow users to use stablecoins to complete payments, further broadening the application scenarios of stablecoins.
The field of payment gateway providers can be clearly divided into two categories (there is some overlap)
1. Developer-oriented Payment gateways; 2. Consumer-oriented Payment gateways. Most payment gateway providers tend to focus more on one of the categories, thereby shaping their core products, user experience and target markets.
Developer-oriented Payment gateways are designed to serve enterprises, fintech companies and enterprises that need to embed stablecoin infrastructure into their workflows. They typically provide application programming interfaces (APIs), software development kits (SDKs), and developer tools to integrate into existing payment systems to enable features such as automated payments, stablecoin wallets, virtual accounts, and real-time settlements. Some emerging projects that focus on providing such developer tools include:
BVNK: Provides enterprise-level payment infrastructure to easily integrate stablecoins. BVNK provides API solutions to make the process seamless, with a payment platform for cross-border commercial payments, as well as corporate accounts that allow companies to hold and trade multiple stablecoins and fiat currencies, and merchant services that provide companies with the tools they need to accept stablecoin payments from customers. It processes more than $10 billion in annualized transactions, with an annual growth rate of 200%, and a valuation of $750 million. Its customers include emerging regions such as Africa, Latin America, and Southeast Asia.
Iron (in beta)：Provides APIs to seamlessly integrate stablecoin transactions into existing businesses. It provides enterprises with global access channels, stablecoin payment infrastructure, wallets and virtual accounts, and supports customized payment workflows (including regular payments, invoicing or on-demand payments)
**Juicyway：**Provides a range of corporate payment, salary issuance and batch payment APIs, supporting currencies including Nigerian Naira (NGN), Canadian Dollar (CAD), US Dollar (USD), Tether (USDT), and US Dollar Coin (USDC). Mainly targeting the African market, no operating data yet.
Consumer-orientedpayment gateways are user-focused, providing a simple and easy-to-use interface for users to make stablecoin payments, remittances, and financial services. They typically include mobile wallets, multi-currency support, fiat currency deposit and withdrawal channels, and seamless cross-border transactions. Some well-known projects that focus on providing users with this simple payment experience include:
Decaf: On-chain banking platform, enabling personal consumption, remittances, and stablecoin transactions in more than 184 countries; Decaf cooperates with local channels including MoneyGram in Latin America to achieve almost zero withdrawal fees, with more than 10,000 South American users, and is highly rated among solana developers.
Meso：Deposit and withdrawal solution, directly integrated with merchants, enabling users and businesses to easily convert between fiat currencies and stablecoins with minimal friction. Meso also supports Apple Pay to purchase USDC, simplifying the process for consumers to obtain stablecoins.
Venmo：Venmo's stablecoin wallet feature leverages stablecoin technology, but its functionality is integrated into its existing consumer payment application, allowing users to easily send, receive and use digital dollars without directly interacting with blockchain infrastructure.
b. U Card
Cryptocurrency cards are payment cards that allow users to spend cryptocurrencies or stablecoins at traditional merchants. These cards are usually integrated with traditional credit card networks (such as Visa or Mastercard) to enable seamless transactions by automatically converting cryptocurrency assets into fiat currency at the point of sale.
Projects include:
Reap: Asian card issuers, clients include Infini, Kast, Genosis pay, Redotpay, Ether.fi and more than 40 other companies, selling white label solutions, mainly relying on transaction volume commission (such as Kast 85%-Reap15%) and cooperating with Hong Kong banks, can cover most areas outside the United States, and can support multi-chain deposit; transaction volume reached $30M in July 2024.
Raincards
leaf="">：American card issuer, supports Avalanche, Offramp, Takenos and other companies to issue cards. The biggest feature is that it can serve users in the United States and Latin America. I issued a USDC corporate card myself and used on-chain assets (such as USDC) to pay for travel expenses, office supplies and other daily business expenses.
Fiat24: European card issuer + web3 bank, the business model is similar to the above two, supporting ethsign, safepal and other corporate card issuance; Swiss license, mainly serving European + Asian users, does not support full-chain transactions, only arbitrum recharges. Slow growth, total users 2w, monthly income $100K-150K.
**Kast：**The fastest growing U card on Solana. Currently, more than 10,000 cards have been issued, with 5-6k monthly active users, transaction volume of $7m in December 2024, and revenue of $200k.
1Money：A stablecoin ecosystem that recently launched a credit card that supports stablecoins and provides a software development kit to facilitate L1 and L2 integration. No data is available in beta yet.
There are many cryptocurrency card providers, which mainly differ in service areas and supported currencies, and usually provide low-cost services to end users to increase users' enthusiasm for using cryptocurrency cards.
As a key layer of the stablecoin technology stack, payment processors are the backbone of payment channels, mainly covering two categories: 1. Deposit and withdrawal service providers 2. Stablecoin issuance service providers. They act as a key middle layer in the payment lifecycle, connecting Web3 payments with traditional financial systems.
a. Deposit and withdrawal processors
Moonpay : Supports more than 80 cryptocurrencies, provides a variety of deposit and withdrawal methods and token swap services to meet users' diverse cryptocurrency trading needs.
Ramp Network : Covers more than 150 countries and provides deposit and withdrawal services for more than 90 crypto assets. The network handles all KYC (identity verification), AML (anti-money laundering) and compliance requirements, ensuring the compliance and security of deposit and withdrawal services.
Alchemy Pay：A hybrid payment gateway solution that supports two-way exchange and payment between fiat currency and crypto assets, realizing the integration of traditional fiat currency and crypto asset payments.
b. Stablecoin issuance & coordination processors
Bridge：Bridge's core products include coordination APIs and issuance APIs. The former helps companies integrate multiple stablecoin payments and exchanges, and the latter supports companies to quickly issue stablecoins. The platform is currently licensed in the United States and Europe, and has established important partnerships with the U.S. State Department and Treasury Department, with strong compliance operations capabilities and resource advantages.
Brale (in beta)：Similar to the Bridge product, it is a regulated stablecoin issuance platform that provides stablecoin coordination and reserve management APIs. There are compliance licenses in all states in the United States. All cooperative enterprises need to pass KYB (corporate identity verification), and users need to set up accounts in Brale for KYC. Brale's customers are mostly on-chain OGs (such as Etherfuse, Penera, etc.), which are slightly worse than Bridge in terms of investor endorsement and BD.
Perena (in beta)：Perena's Numeraire platform lowers the threshold for issuing niche stablecoins by encouraging users to provide centralized liquidity in a single pool. Numeraire adopts a "hub-and-spoke" model, in which USD* acts as a central reserve asset and serves as a "hub" for the issuance and exchange of stablecoins. This mechanism enables multiple stablecoins pegged to different assets or jurisdictions to be efficiently minted, redeemed, and traded, with each stablecoin connected to USD* as a similar "spoke". Through this system structure, Numeraire ensures deep liquidity and improves capital efficiency, as small stablecoins can interoperate through USD* without the need for decentralized liquidity pools for each trading pair. The ultimate design goal of the system is not only to enhance price stability and reduce slippage, but also to enable seamless conversion between stablecoins.
Asset issuers are responsible for the creation, maintenance and redemption of stablecoins. Their business model is usually centered on the balance sheet, similar to bank operations - accepting customer deposits and investing the funds in high-yield assets such as US Treasuries to earn interest spreads. At the asset issuer level, stablecoin innovation can be divided into three levels: static reserve-backed stablecoins, interest-bearing stablecoins, and revenue-sharing stablecoins. 1. Static Reserve-Backed Stablecoins The first generation of stablecoins introduced the underlying model of the digital dollar: a centrally issued token backed 1:1 by fiat reserves held by traditional financial institutions. Major players in this category include Tether and Circle. Tether’s USDT and Circle’s USDC are the most widely used stablecoins, both backed 1:1 by USD reserves in Tether and Circle’s financial accounts. These stablecoins are currently integrated with multiple platforms and serve as base currency pairs for a large portion of cryptocurrency trading and settlement. It is worth noting that the value capture of these stablecoins belongs to the asset issuers themselves. USDT and USDC generate returns for their issuing entities mainly through interest rate spreads rather than sharing returns with users. 2. Interest-bearing stablecoins The second evolution of stablecoins goes beyond simple fiat-backed tokens and embeds native yield-generating functions. Interest-bearing stablecoins provide holders with on-chain returns, usually derived from mechanisms such as short-term treasury yields, decentralized finance (DeFi) lending strategies, or staking rewards. Unlike traditional static stablecoins that passively hold reserves, these assets actively generate returns while maintaining price stability.
Well-known protocols that provide on-chain yields to stablecoin holders include:
Ethena($6B)：Stablecoin protocol issues USDe - an on-chain synthetic dollar backed by hedged Ethereum (ETH), Bitcoin (BTC) and Solana (SOL) collateral. Ethena's unique design enables USDe holders to earn organic returns derived from perpetual futures market funding rates (currently 6.00% annualized) through a unique collateral and yield mechanism that attracts users.
Mountain($152M)：An interest-bearing stablecoin with a current annualized yield of 4.70%. Mountain allows users to earn interest daily simply by depositing USDM into their wallets, which is attractive to users seeking passive income without additional staking or participating in complex DeFi, providing users with a simple and convenient way to earn interest.
Level($25M)：A stablecoin composed of liquid re-collateralized US dollars. Level explores a new method of stablecoin yield generation; it uses lvlUSD to provide security for multiple decentralized networks, collects the additional income of these networks, and then passes it on to lvlUSD holders, innovating the stablecoin yield model.
CAP Labs(Beta)：Built on the highly anticipated megaETH blockchain, CAP is developing the next-generation stablecoin engine designed to provide new sources of income for stablecoin holders. CAP stablecoins generate scalable and adaptable returns by leveraging external revenue sources such as arbitrage, maximum extractable value (MEV), and real-world assets (RWA) - these revenue streams have traditionally been reserved for sophisticated institutional players, opening up new directions for stablecoin returns.
3. Revenue-sharing stablecoins
Revenue-sharing stablecoins integrate built-in monetization mechanisms to distribute part of transaction fees, interest income, or other revenue streams directly to users, issuers, terminal apps, and ecosystem participants. This model aligns incentives between stablecoin issuers, distributors, and end users, further transforming stablecoins from passive payment tools to active financial assets.
Paxos ($72m): As a growing stablecoin issuer, Paxos announced the launch of USDG in November 2024, which is regulated by the Monetary Authority of Singapore's upcoming stablecoin framework. Paxos shares stablecoin returns and interest income generated by reserve assets with partners who help expand the utility of the network, including Robinhood, Anchorage Digital, and Galaxy, expanding the revenue sharing model through collaboration.
M^0 ($106m): The M^0 team is composed of former MakerDAO and former Circle veterans. M^0's vision is to act as a simple, trusted neutral settlement layer that enables any financial institution to mint and redeem M^0's revenue-sharing stablecoin "M". M^0 The protocol shares most of the interest income with approved distributors known as yield-earners. However, one of the differences between "M" and other yield-sharing stablecoins is that "M" can also be used as "raw materials" for other stablecoins such as Noble's USDN
Agora ($76m): Similar to USDG and "M", Agora's AUSD also shares revenue with applications and market makers that integrate AUSD. Agora has received strategic support from some market makers and applications including Wintermute, Galaxy, Consensys and Kraken Ventures. Agora's Rev-sharing ratio is not fixed, but most of it will be returned to partners. 4. The Fourth Layer: Settlement Layer The settlement layer of the stablecoin technology stack is the foundation of the stablecoin ecosystem, ensuring the finality and security of transactions. It consists of payment channels (blockchain networks) that process and verify stablecoin transactions in real time. Today, many well-known L1L2 networks serve as key settlement layers for stablecoin transactions: Solana: A high-performance blockchain known for its excellent throughput, fast finality, and low fees, it has become a key settlement layer for stablecoin transactions, especially in consumer payments and remittances. The Solana Foundation is actively encouraging developers to build on Solana Pay and hosting PayFi conferences/hackathons to strongly support off-chain PayFi innovation and promote the application of stablecoins in actual payment scenarios.
Tron: The first-layer blockchain that occupies an important market share in the field of stablecoin payments; USDT on Tron is widely used in cross-border payments and peer-to-peer (P2P) transactions due to its efficiency and deep liquidity. Tron focuses on B2C transactions, but the support for B2B scenarios is currently insufficient
Codex (beta)：OP L2 for cross-border B2B payments, Codex aggregates deposit and withdrawal service providers, market makers, exchanges, and stablecoin issuers to provide enterprises with one-stop stablecoin financial services. Codex has a strong distribution channel and shares 50% of its sorter fees with Circle to obtain its deposit and withdrawal traffic.
Noble：USDC native asset issuance chain designed for Cosmos and IBC ecosystems, Cosmos is the fourth largest USDC issuance chain and has been integrated with Coinbase. Projects that integrate Noble can deposit USDC into more than 90 IBC modular chains (dYdX, Osmosis, Celestia, SEI, Injective) with one click to realize the native minting and circulation of USDC in the multi-chain ecosystem.
1Money (beta): L1 built specifically for stablecoin payments. Transactions are processed in parallel with the same priority and fixed fees, which means there is no transaction reordering and no user can "jump the queue" by paying a higher fee. The network also provides gas-free transactions through ecosystem partners to enhance the user experience and provide a fair and efficient network environment for stablecoin payments.
Regulatory uncertainty: Before banks, enterprises and fintech companies fully adopt stablecoins, they urgently need regulators to provide clearer policy guidance to effectively control risks.
User side: The lack of usage scenarios for stablecoins has restricted its popularity among ordinary consumers. The payment scenarios used by consumers in daily life are relatively fixed, and stablecoins have not yet been deeply integrated into them. Many consumers lack the actual demand and motivation to use stablecoins.
**Enterprise side:** The degree of acceptance of stablecoin payments by enterprises greatly affects the promotion process of stablecoins. At present, when accepting stablecoin payments, enterprises are faced with the dual test of willingness and ability. On the one hand, some enterprises have limited knowledge of stablecoins as an emerging payment method, and have doubts about their security and stability, which leads to low willingness to accept. On the other hand, even if enterprises have the idea of accepting stablecoin payments, in actual operations, they may still face difficulties in technical docking, financial accounting, compliance supervision and other aspects, which limits their acceptance ability.
Despite many bottlenecks, we believe thatU.S. regulation will encourage more traditional users and enterprises to adopt compliant stablecoins as it gradually becomes clearer. Although both parties may face potential frictions such as KYC (customer identity verification) and KYB (business identity verification), the market potential is huge in the long run.
If the market is segmented into 1. Crypto native users 2. Non-crypto native users. All the project parties interviewed are mostly targeting on-chain markets and serving crypto native users, while the non-crypto native market is still largely undeveloped. This market gap provides a major opportunity for innovative companies to establish a first-mover advantage in guiding new users into the crypto field.
On the chain, the stablecoin market is already highly competitive. Many participants are committed to increasing use cases, locking in total value locked (TVL) through higher yields, and incentivizing users to hold stablecoins. As the ecosystem develops, future project success will depend on expanding real-world applications, promoting interoperability between different stablecoins, and reducing friction faced by businesses and consumers.
Stablecoins are integrated into mainstream payment applications: Mainstream payment platforms such as Apple Pay, PayPal, and Stripe have already included stablecoin transactions. This move not only greatly expands the use scenarios of stablecoins, but also significantly reduces foreign exchange fees in international payments, bringing more economical and efficient cross-border payment experience to enterprises and users.
Incentivize enterprises with revenue-sharing stablecoins: Revenue-sharing stablecoins prioritize distribution channels and build a strong network effect by cleverly coordinating the incentive mechanism between stablecoins and applications. It is not directly aimed at C-end users, but precisely targets distribution channels such as financial apps. Paxos’ USDG, M0 Foundation’s M, and Agoda’s AUSD are typical examples of “revenue sharing” stablecoins.
Enterprises and organizations can more easily issue their own stablecoins: Ordinary enterprises can more easily issue and manage their own stablecoins, which has become a key trend in promoting the adoption of stablecoins by enterprises. For example, Perena Bridge and Brale are pioneers in this field. As the overall infrastructure continues to improve, the trend of enterprises or countries issuing proprietary stablecoins is expected to further increase.
B2B stablecoin liquidity and fund management solutions: Help enterprises properly hold and manage stablecoin assets to meet working capital and revenue generation needs. For example, the Mountain Protocol's on-chain revenue platform provides enterprises with professional fund management solutions, effectively improving the efficiency of enterprise fund operations.
**Payment infrastructure for developers (enterprises):** It is not difficult to find that some of the most successful platforms currently position themselves as crypto-native versions of traditional financial services, committed to providing innovative financial solutions for enterprises. For example, many companies currently have to manually coordinate liquidity providers, exchange partners, and local payment channels, making the large-scale adoption of stablecoins inefficient. BVNK solves this problem by automating the entire payment workflow. The protocol also introduces a multi-track solution that combines local banks, crypto liquidity providers, and fiat off-chain into a single payment engine. Instead of requiring companies to manage multiple intermediaries, BVNK automatically routes funds through the "fastest, cheapest, and most reliable channels" to optimize each transaction in real time. As stablecoin enterprise adoption continues to accelerate, solutions like BVNK will play a key role in making stablecoin payments frictionless, scalable, and fully integrated with global commerce. By addressing the inefficiencies that prevent enterprises from adopting stablecoins on a large scale.
Settlement network designed for cross-border payments: Proprietary L1L2 covering scenarios such as business-to-business cross-border payments or business-to-consumer retail transfers. It has the significant advantages of easy integration and comprehensive supervision, and can effectively meet the payment needs of enterprises in complex business scenarios. For example, Codex, as an L2 built specifically for cross-border transactions, provides one-stop stablecoin financial services for enterprises by aggregating deposit and withdrawal service providers, market makers, exchanges and stablecoin issuers; Solana fully supports PayFi. In addition to its own technology stack advantages, it actively promotes products to partners and local enterprises, and guides Shopify, Paypal enterprises and offline merchants to use Solana pay for payment (especially in Latin America, Southeast Asia and other regions where banking services are relatively weak). A major trend is that the competition between L1L2 settlement networks is not only limited to technology, but will also involve multi-level competition such as developer ecology, BD merchants, and traditional enterprise cooperation in the future.
As stablecoins become easier to obtain and integrated into traditional financial applications, non-crypto native users will begin to use them without being aware of them. Just as today’s users can use digital payments without understanding the underlying banking system, stablecoins will increasingly become invisible infrastructure, providing faster, lower-cost, and more efficient transaction support for various industries.
Embedded Stablecoin Payments in E-Commerce and Remittances
The use of stablecoins for daily transactions is a key driver of their adoption, especially in the areas of e-commerce and cross-border remittances where traditional payment systems are inefficient, costly, and rely on outdated banking networks. Embedded stablecoin payments provide the following value for these scenarios:
Faster and lower-cost payment experience: Stablecoins significantly reduce transaction fees and settlement times for merchants and consumers by eliminating intermediaries. When integrated into mainstream e-commerce platforms, they can replace credit card networks, achieve instant transaction finality and save payment processing costs.
Gig economy, cross-border freelance salary payment, and currency preservation needs in Latin America and Southeast Asia: The needs of these specific scenarios have given rise to the need for barrier-free cross-border payments. Compared with traditional banking and remittance services, stablecoins enable gig workers and freelancers to receive funds in seconds at a lower cost, and this advantage is destined to make it the preferred payment solution for the global labor market.
As stablecoin payment channels become deeply embedded in mainstream platforms, their application scope will exceed the circle of native cryptocurrency users. In the future, consumers will use blockchain-driven transaction services in their daily financial activities without feeling.
On-chain yield products for non-crypto users
Obtaining yield through digital dollars is another core value proposition of stablecoins, which is still underdeveloped in the traditional financial sector. Although DeFi native users have long been exposed to on-chain yields, emerging products are bringing these opportunities to mainstream consumers through simplified and compliant interfaces.
The key is to introduce traditional financial users to the world of on-chain yields in a seamless and intuitive way. In the past, obtaining DeFi yields required technical knowledge, self-custody capabilities, and experience in operating complex protocols. Today, compliant platforms abstract technical complexity and provide intuitive interfaces, allowing users to earn income by holding stablecoins without deep crypto knowledge.
As a pioneering protocol in this field, Mountain Protocol deeply understands the inclusive value of on-chain yields. Unlike traditional stablecoins that only serve as a medium of exchange, Mountain's stablecoin USDM defaults to directly distribute yields to holders on a daily basis. Its current annualized yield of 4.70% is derived from short-term low-risk US Treasuries, making it a dual alternative to traditional bank deposits and DeFi staking mechanisms. Mountain attracts non-crypto native users through the following ways:
Frictionless passive income: Users only need to hold USDM to automatically accumulate income, without the need for additional staking, participation in complex DeFi strategies or active management.
Compliance Guarantee: USDM is fully audited, fully collateralized, and designed with an isolated bankruptcy isolation account structure to ensure that users receive the same level of transparency and investor protection as off-chain money market instruments.
On-chain yield risk control: Mountain minimizes the risk of bank bankruptcy and stablecoin decoupling by strictly limiting reserve assets to US Treasury bonds and simultaneously establishing a credit line denominated in USDC, eliminating the common concerns of non-crypto users about digital assets.
Mountain brings a paradigm shift for non-crypto users: for individual users, USDM provides a low-risk digital asset yield entry without DeFi knowledge; for institutional and corporate fund management departments, USDM is a compliant, stable and interest-bearing alternative to traditional banking products. Mountain Protocol's long-term strategy includes deepening the integration of USDM in the DeFi and TradFi ecosystems, expanding multi-chain support, and expanding institutional cooperation (such as the existing cooperation with BlackRock). These measures will further simplify the path to on-chain yield and promote the adoption of stablecoins by non-crypto users.
Optimize the KYC process to achieve seamless user access
For stablecoin payments to achieve large-scale consumer adoption, the KYC (Know Your Customer) process must be extremely simplified under the premise of compliance. One of the key pain points that currently hinders the entry of non-crypto users is the cumbersome identity verification process. To this end, leading stablecoin payment service providers are embedding KYC directly into the platform to achieve smooth user access.
Modern platforms no longer require users to complete verification separately, but integrate KYC into the payment process. For example:
Ramp and MoonPay allow users to complete KYC in real time when purchasing stablecoins through debit cards, reducing manual review delays;
BVNK provides enterprises with embedded KYC solutions to quickly and securely complete customer authentication without interrupting the payment experience.
The fragmentation of regulatory frameworks across jurisdictions remains a challenge to simplifying the KYC process. Head service providers address regional compliance differences through modular KYC frameworks. For example:
Circle's USDC platform adopts a hierarchical verification mechanism. Users can complete small transactions through basic KYC and unlock higher limits through advanced verification.
In the future, transforming KYC into a seamless link through automation and process optimization will become the key for stablecoin payment service providers to break the entry barriers for mainstream users and accelerate on-chainization.
While stablecoins have greatly accelerated the global payment process, saving a lot of time and capital costs, real-world transactions currently still rely on fiat currency on- and off-ramps. This has led to the metaphorical "stablecoin sandwich" framework, where stablecoins only serve as a bridge between fiat currencies in the transaction lifecycle. Many stablecoin payment providers focus on fiat currency interoperability, essentially making stablecoins a temporary transfer layer between fiat currencies. However, a more forward-looking vision is that in the future, stablecoin native payment service providers (PSPs) may emerge to enable stablecoin payments to operate natively. This means fundamentally rebuilding the payment system, assuming that trading, settlement, and fund management functions are completely on-chain.
Companies like Iron are actively exploring innovation in this field, committed to building a future where stablecoins are not only a bridge between fiat currency systems, but also the foundation of the entire on-chain financial ecosystem. Unlike other payment solutions that often replicate traditional financial rails with stablecoins, Iron is focusing on developing a payment and fund management stack that is on-chain first, with the expectation that funds will remain on-chain throughout the future, financial markets will achieve true interoperability, and real-time settlement will be achieved 24/7 on a shared public ledger.
Whether the future of funds remaining on-chain is feasible depends entirely on the choice of consumers: whether to exchange stablecoins for fiat currency and settle through traditional rails, or to keep funds on-chain. There are several key factors that may drive this shift:
A very compelling reason for consumers to keep their funds in stablecoins is to be able to obtain passive, risk-adjusted returns directly on the chain. In a stablecoin-native economy, consumers will have greater control over the use of their funds and receive almost instant returns that are superior to traditional savings accounts. But for this to truly be possible, users must be able to discover attractive yield opportunities in the future, and the protocols that provide such returns must reach a level of maturity with almost no counterparty risk.
Holding stablecoins greatly reduces the need for traditional banking relationships. Today, users are highly dependent on banks for account custody, payments, and access to financial services. Stablecoins enable self-custodial wallets and programmable finance, allowing users to hold and manage their funds autonomously without third-party intermediaries. This is particularly valuable in areas where the banking system is unstable or access to financial services is limited. Despite the growing appeal of the self-custodial model, most non-crypto native users either lack understanding of it or are wary of managing their funds in this way. To further the development of this self-custodial model, consumers may demand more regulatory assurance and powerful applications.
As stablecoin regulation becomes clearer and its acceptance grows, consumers will have more confidence in the long-term value preservation ability of stablecoins. If large enterprises, payroll agencies, and financial institutions begin to settle transactions natively in stablecoins, the need for users to convert back to fiat will be greatly reduced. This is similar to the process of consumers gradually transitioning from cash to digital banking. Once the new infrastructure is widely adopted, the demand for traditional systems will naturally decline.
It is worth noting that the transition to a stablecoin-native economy may eventually cause a shock to many existing payment rails. If consumers and businesses increasingly prefer to store value in stablecoins rather than fiat currencies in traditional bank accounts, this will have a significant impact on the existing payment system. Credit card networks, remittance companies, and banks rely primarily on transaction fees and foreign exchange spreads as a source of revenue, while stablecoins can be settled instantly and at almost zero cost on blockchain networks. If stablecoins can circulate freely in a country's economy like fiat currencies, these traditional payment players are likely to be excluded from the middleman.
In addition, the native stablecoin economy will also challenge the banking business model based on fiat currencies. In the traditional model, deposits are the basis for lending and credit creation. If funds remain on the chain, banks may face deposit losses, and their ability to lend and earn returns on customer funds will also be reduced. This may accelerate the transformation of the financial system, prompting decentralized and on-chain financial services to gradually replace the traditional role of banks.
Clearly, as long as incentives are in favor of keeping funds on-chain, the theoretical stablecoin native economy has the potential to become a reality. This shift will be gradual, and as on-chain yield opportunities continue to increase, banking frictions persist, and stablecoin payment networks continue to mature, consumers may increasingly choose stablecoins over fiat currencies, causing some traditional financial rails to become obsolete.
Payment Application Layer: Make every effort to simplify the consumer experience and build a regulatory-first stablecoin solution that provides lower prices, higher asset returns, and faster and more convenient transfer experience than Web2 payment rails.
Payment Processor Layer: Focus on building enterprise-friendly, out-of-the-box infrastructure middleware. Due to the characteristics of its business, different licenses and compliance requirements are required to serve different regions, and the competition landscape of payment processors is still relatively fragmented.
Asset Issuer Layer: Actively pass stablecoin revenue to non-crypto native companies and ordinary users, thereby incentivizing users to hold stablecoins instead of fiat currencies.
Settlement network layer: The competition between L1L2 settlement networks is not only limited to the technical level, but will also involve competition in multiple levels such as developer ecology, BD merchants, and traditional enterprise cooperation in the future, accelerating stablecoin payments into real life.
Of course, the large-scale adoption of stablecoins depends not only on emerging start-ups, but also on the collaboration of mature financial giants. In recent months, four major financial giants have announced their entry into the stablecoin field: Robinhood and Revolut are launching stablecoins, Stripe recently acquired Bridge to achieve faster and cheaper global payments, and Visa is helping banks launch stablecoins despite its own interests.
In addition, we observe that Web3 startups are leveraging these mature distribution channels to integrate crypto payment products into existing mature companies through software development kits (SDKs), providing users with multiple options such as fiat currency & cryptocurrency payments. This strategy helps solve the cold start problem and build trust with businesses and users from the beginning.
Stablecoins have the potential to reshape the global financial transaction landscape, but the key to mass adoption lies in bridging the gap between the on-chain ecosystem and the broader economy.
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JoyFormer Binance CEO Changpeng "CZ" Zhao faced account restrictions on social media platform X (formerly Twitter), post-resignation linked to a $4.3 billion settlement with the U.S. Department of Justice. The platform hinted at rule violations, and CZ attributed the restriction to a flawed bot detection algorithm, raising uncertainties about his future activity despite Richard Teng assuming Binance's leadership role.
JixuRaiffeisen Bank, a venerable Austrian financial institution with $215 billion in assets, is set to introduce cryptocurrency trading services for retail clients in Vienna by January 2024, in partnership with Bitpanda. The move reflects the bank's strategic foray into the crypto realm, targeting digitally savvy customers with a preference for modest investments and emphasizing the increasing adoption of cryptocurrencies in regions with clear regulatory frameworks.
JixuThe Macy's Thanksgiving Day Parade featured the Cool Cats NFT collection, with its Blue Cat Balloon symbolizing the launch of "The Milk Chug" YouTube Shorts series. Despite facing challenges and price fluctuations, the parade spotlight has revitalized the collection, now boasting a floor price of 1.05 ETH ($2,150), marking a 195% surge in trading volumes within the last 24 hours on OpenSea.
JixuThe SEC has filed a complaint against Kraken, alleging the cryptocurrency platform operated without necessary registrations, combining multiple roles without proper approval. The accusations include providing a marketplace for securities transactions, acting as an unregistered exchange, and commingling customer funds with its own. Kraken's CEO disputes the claims, sparking a broader debate on the SEC's role in regulating cryptocurrency exchanges and the industry's future.
JixuSingapore's MAS introduces measures to safeguard against crypto speculation, reinforcing regulatory vigilance and navigating the challenges of Digital Asset Trading.
Hui XinThe founder of Binance, Zhao Changpeng (CZ), recently resigned and pleaded guilty to violating the Banking Secrecy Act. Despite posting a $175 million bail, CZ remains in the United States.
JoyWall Street Memes swiftly responds to a Discord cyber attack by launching the Discord Hack Relief Fund, airdropping $46,000 in $WSM tokens to compensate victims. Those submitting claims by November 17 receive a 1:1 refund for compromised wallet funds, with the community expressing gratitude on Telegram. The team also introduces the Wall Street Memes Casino Loyalty Program and teases the upcoming Wall Street Casino Affiliate Program, set to launch next week.
JixuExploring the aftermath of Nigeria's $246,153 crypto theft: arrests, recovery efforts, and the broader implications in the digital sphere.
Hui XinAmidst escalating legal tensions, former Binance CEO Changpeng "CZ" Zhao fights against the US government's efforts to impede his return to the UAE.
Hui Xin