The Stablecoin Revolution in Progress: Resonance of Technological Architecture and Business Ecosystem

The global financial system is undergoing profound changes. Traditional payment networks face comprehensive challenges from stablecoins due to outdated infrastructure, lengthy settlement cycles, and high costs. These digital assets are revolutionizing the patterns of cross-border value flow, corporate transaction paradigms, and the ways individuals access financial services.

In recent years, stablecoins have continued to develop and have become an important underlying infrastructure for global payments. Large fintech companies, payment processors, and government entities are gradually incorporating stablecoins into consumer-facing applications and corporate cash flows. At the same time, emerging financial tools, from payment gateways to deposit and withdrawal channels, and to programmable yield products, have greatly enhanced the convenience of using stablecoins.

This report provides an in-depth analysis of the stablecoin ecosystem from both technical and business perspectives. It examines the key players shaping this field, the core infrastructure supporting stablecoin transactions, and the dynamic demand driving its applications. Furthermore, it explores how stablecoins are giving rise to new financial application scenarios and the challenges they face in being widely integrated into the global economic process.

1. Why choose stablecoin payments?

To explore the influence of stablecoins, it is first necessary to examine traditional payment solutions. These traditional systems encompass cash, checks, debit cards, credit cards, international wire transfers (SWIFT), automated clearing houses (ACH), and peer-to-peer payments. Although they have become integrated into daily life, many payment channels, such as ACH and SWIFT, have existed since the 1970s. While they were groundbreaking at the time, most of these global payment infrastructures have now become outdated and highly fragmented. Overall, these payment methods are plagued by high fees, high friction, long processing times, inability to achieve 24/7 settlement, and complex back-end processes. Additionally, they often bundle unnecessary extra services such as identity verification, lending, compliance, fraud protection, and banking integration (which require fees).

Stablecoin payments are effectively addressing these pain points. Compared to traditional payment methods, using blockchain for payment settlement greatly simplifies the payment process, reduces intermediaries, and achieves real-time visibility of fund flows, not only shortening settlement time but also lowering 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 immutable ledger of blockchain ensures the security and transparency of transactions, providing protection for users.
• Cost reduction: Eliminating intermediaries significantly lowers transaction fees, saving expenses for users.
• Global Coverage: Decentralized platforms can reach markets underserved by traditional financial services (including unbanked populations), achieving financial inclusion.

2. The Landscape of the Stablecoin Payment Industry

The stablecoin payment industry can be subdivided into four levels of technology stack:

1. Layer One: Application Layer

The application layer is mainly composed of various payment service providers (PSP), which integrate multiple independent deposit and withdrawal payment institutions into a unified aggregation platform. These platforms provide users with convenient access to stablecoins, offer tools for developers developing on the application layer, and provide credit card services for Web3 users.

a. Payment Gateway

Payment gateways are services that facilitate transactions between buyers and sellers by securely processing payments.

Notable companies innovating in this field include:

• Certain payment providers: Traditional payment providers integrate certain stablecoins for global payments.
• Certain wallets: They do not provide direct fiat currency exchange functions themselves, and users can perform deposit and withdrawal operations through integration with third-party services.
• A certain payment platform: 450,000 active wallets and 6,000 merchants. With the help of a certain protocol plugin, millions of merchants on a certain e-commerce platform can settle payments using cryptocurrency and instantly convert a certain stablecoin to other stablecoins.
• Certain technology companies, certain online payment platforms, and certain mobile payment applications, among other Web2 payment applications, also allow users to make payments using stablecoins, further expanding the application scenarios of stablecoins.

The field of payment gateway providers can be clearly divided into two categories (with some overlap).

1. Payment gateway for developers; 2) Payment gateway for consumers. Most payment gateway providers tend to focus more on one of these categories, thereby shaping their core products, user experience, and target market.

The developer-oriented payment gateway aims to serve businesses, fintech companies, and enterprises that need to embed stablecoin infrastructure into their workflows. They typically offer application programming interfaces (APIs), software development kits (SDKs), and developer tools for integration into existing payment systems, enabling features such as automated payments, stablecoin wallets, virtual accounts, and real-time settlements. Some emerging projects focused on providing such developer tools include:

• A payment infrastructure: Provides enterprise-level payment infrastructure for easy integration of stablecoins. The platform offers API solutions for seamless process integration, a payment platform for cross-border commercial payments, and corporate accounts that allow businesses to hold and trade various stablecoins and fiat currencies, along with merchant services that provide the tools needed for businesses to accept customer payments in stablecoins. Processing over $10 billion in annualized transaction volume, with a year-on-year growth rate of 200%, a valuation of $750 million, and clients including certain emerging regions.
• A certain payment API (testing phase): Provides an API to seamlessly integrate stablecoin transactions into their existing business. It offers enterprises global inflow and outflow channels, stablecoin payment infrastructure, wallets, and virtual accounts, supporting customized payment workflows (including recurring payments, invoicing, or on-demand payments).
• A certain payment service: Offers a range of enterprise payment, salary distribution, and bulk payment APIs, supporting currencies including certain fiat currencies and stablecoins. Primarily targeting a specific regional market, there is currently no operational data.

Consumer-focused payment gateways prioritize the user, providing an easy-to-use interface that facilitates stablecoin payments, remittances, and financial services. They typically include mobile wallets, multi-currency support, fiat deposit and withdrawal channels, and seamless cross-border transactions. Some well-known projects that focus on providing users with this simple payment experience include:

• A banking platform on a certain blockchain: enabling personal consumption, remittances, and stablecoin transactions in over 184 countries; this platform collaborates with local channels, including a certain remittance service, in a certain region to achieve almost zero withdrawal fees, with more than 10,000 users in that region, receiving high ratings among certain public chain developers.
• A certain deposit and withdrawal solution: Direct integration with merchants allows users and businesses to easily convert between fiat currency and stablecoins, with minimal friction. The platform also supports certain mobile payment options to purchase certain stablecoins, streamlining the process for consumers to acquire stablecoins.
• A mobile payment application: The stablecoin wallet feature of this application utilizes 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 the blockchain infrastructure.

b. Cryptocurrency Card

Cryptocurrency cards are payment cards that allow users to spend cryptocurrency or stablecoins at traditional merchants. These cards are typically integrated with traditional credit card networks, enabling seamless transactions by automatically converting cryptocurrency assets into fiat currency at the point of sale.

The project includes:

• An Asian issuer: Clients include more than 40 enterprises, selling white-label solutions, mainly relying on transaction fee sharing (e.g., a certain project 85%-the issuer 15%) cooperating with banks in certain regions, covering most areas outside of a certain region, and supporting multi-chain deposits; by July 2024, the transaction volume reached $30M.
• Certain American card issuers: support multiple companies in issuing cards, with the main feature being the ability to serve users in certain regions. Issued a certain stablecoin corporate card to pay for travel expenses, office supplies, and other daily business costs using on-chain assets.
• A certain European card issuer: The business model is similar to the two mentioned above, supporting some enterprises in issuing cards; licensed in a certain country, mainly serving users in certain regions, currently does not support full-chain transactions and can only recharge through a certain public chain. Growth is slow with a total of 20,000 users and a monthly income of $100K-150K.
• Certain public chain U Card: A U Card that is growing rapidly on a certain public chain, with over 10,000 cards issued, 5-6k monthly active users, a trading volume of $7m in December 2024, and revenue of $200k.
• A certain stablecoin ecosystem: Recently launched a credit card supporting stablecoins and provided a software development kit for easier integration, with no data available in the testing phase.

There are many cryptocurrency card providers, which mainly differ in terms of service areas and supported currencies, and they usually offer low-fee services to end users to enhance the enthusiasm for using cryptocurrency cards.

2. Second Layer: Payment Processor

As a key layer in 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 crucial intermediary in the payment lifecycle, connecting Web3 payments with traditional financial systems.

a. Deposit and Withdrawal Processor

• A certain deposit and withdrawal platform: supports over 80 types of cryptocurrencies, provides various deposit and withdrawal methods and token swap services, meeting users' diverse cryptocurrency trading needs.
• A certain network: covers over 150 countries and provides deposit and withdrawal services for more than 90 types of crypto assets. The network handles all KYC (Know Your Customer), AML (Anti-Money Laundering), and compliance requirements, ensuring the compliance and security of deposit and withdrawal services.
• A certain payment gateway: a hybrid payment gateway solution that supports bidirectional exchange and payment between fiat currencies and crypto assets, achieving the integration of traditional fiat currency and crypto asset payments.

b. Stablecoin Issuance & Coordination of Processors

• A certain platform: The core products of this platform include a coordination API and an issuance API. The former helps enterprises integrate various stablecoin payments and exchanges, while the latter supports enterprises in quickly issuing stablecoins. The platform is currently licensed in certain regions and has established significant partnerships with some government agencies, possessing strong compliance operational capabilities and resource advantages.
• A certain issuance platform (testing phase): Similar to the products of the aforementioned platform, it is a regulated stablecoin issuance platform that provides stablecoin coordination and reserve management APIs. It has compliance licenses in various states within a certain region, and partner enterprises are required to undergo KYB (Know Your Business) verification, while users need to set up an account on the platform for KYC (Know Your Customer). The clients of this platform are mostly earlier-stage on-chain projects, which are slightly less backed by investors and have weaker business expansion compared to the aforementioned platform.
• A certain issuing platform (testing phase): This platform lowers the issuance threshold for niche stablecoins by encouraging users to provide concentrated liquidity in a single pool. The platform adopts a "central hub-radiating" model, where a certain stablecoin serves as the central reserve asset, acting as the "hub" for the issuance and exchange of stablecoins. This mechanism allows for the efficient minting, redemption, and trading of various stablecoins linked to different assets or jurisdictions, with each stablecoin acting as a similar "spoke" connected to a certain stablecoin. Through this system structure, the platform ensures deep liquidity and enhances capital efficiency, as small stablecoins can interoperate through a certain stablecoin without the need to provide 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 achieve seamless conversion between stablecoins.

3. Layer Three: Asset Issuers

Asset issuers are responsible for creating, maintaining, and redeeming stablecoins. Their business model is often centered around a balance sheet, similar to bank operations - accepting customer deposits and investing the funds in certain high-yield assets to earn a spread.