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

The global financial system is undergoing profound changes. Traditional payment networks are facing comprehensive challenges from emerging alternatives - stablecoins, due to outdated infrastructure, lengthy settlement periods, and high costs. These digital assets are rapidly revolutionizing the modes of cross-border value flow, the paradigms of corporate transactions, 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 sovereign entities are gradually integrating stablecoins into consumer-facing applications and corporate fund flows. At the same time, a series of emerging financial tools, from payment gateways to deposit and withdrawal channels, 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. Additionally, it explores how stablecoins give rise to new financial application scenarios and the challenges they face in becoming widely integrated into the global economic process.

1. Why choose stablecoin payments?

To explore the influence of stablecoins, we must first examine traditional payment solutions. These traditional systems include cash, checks, debit cards, credit cards, international wire transfers, automated clearing houses, and peer-to-peer payments. Although they have become integrated into daily life, much of the infrastructure for these payment channels has existed since the 1970s. While groundbreaking at the time, today, most of these global payment infrastructures are outdated and highly fragmented. Overall, these payment methods are plagued by high costs, high friction, long processing times, inability to achieve round-the-clock settlement, and complex back-end procedures. Additionally, they often bundle unnecessary extra services such as identity verification, lending, compliance, fraud protection, and bank integration.

Stablecoin payments are effectively addressing these pain points. Compared to traditional payment methods, utilizing blockchain for payment settlement greatly simplifies the payment process, reduces intermediaries, and achieves real-time visibility of cash flow, which not only shortens settlement times but also lowers 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 that are underserved by traditional financial services, achieving financial inclusion.

2. The Landscape of the Stablecoin Payment Industry

The stablecoin payment industry can be divided into four technical stack layers:

1. Layer One: Application Layer

The application layer is mainly composed of various payment service providers, 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

A payment gateway is a service that securely processes payments, facilitating transactions between buyers and sellers.

Notable companies innovating in this field include:

• A payment service provider: Traditional payment providers integrating stablecoins like USDC for global payments.
• A certain Web3 wallet: does not provide direct fiat currency exchange functionality itself, users can perform deposit and withdrawal operations through integration with its third-party services.
• Helio: 450,000 active wallets and 6,000 merchants. With the Solana Pay plugin, millions of merchants can settle payments with cryptocurrencies and instantly convert USDY to other stablecoins, such as USDC, EURC, and PYUSD.
• Some Web2 payment applications also allow users to make payments using stablecoins, further expanding the use cases 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 the types, thereby shaping their core products, user experience, and target market.

The payment gateway for developers is designed to serve businesses, fintech companies, and enterprises that need to integrate stablecoin infrastructure into their workflows. They typically provide application programming interfaces, software development kits, 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:

• BVNK: Provides enterprise-grade payment infrastructure for easy integration of stablecoins. BVNK offers API solutions for seamless processes, with a payment platform for cross-border commercial payments, as well as enterprise accounts that allow businesses to hold and trade multiple stablecoins and fiat currencies, along with merchant services that provide the necessary tools for businesses to accept customer stablecoin payments. Processing over $10 billion in annualized transaction volume, with a year-over-year growth rate of 200%, and a valuation of $750 million, clients include emerging regions such as Africa, Latin America, and Southeast Asia.
• Iron: Provides an API to seamlessly integrate stablecoin trading into its existing business. It offers businesses global deposit and withdrawal channels, stablecoin payment infrastructure, wallets, and virtual accounts, supporting customized payment workflows (including recurring payments, invoicing, or on-demand payments).
• Juicyway: Provides a range of corporate payment, salary distribution, and bulk payment APIs, supporting currencies including Nigerian Naira, Canadian Dollar, US Dollar, Tether, and USD Coin. Primarily targeting the African market, there is currently no operational data.

Consumer-focused payment gateways prioritize users, 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:

• Decaf: An on-chain banking platform that enables personal consumption, remittances, and stablecoin transactions in over 184 countries; Decaf collaborates with local channels, including MoneyGram, in Latin America to achieve nearly zero withdrawal fees, with over 10,000 users in South America.
• Meso: A funding solution that integrates directly with merchants, enabling users and businesses to easily convert between fiat currencies and stablecoins with minimal friction. Meso also supports Apple Pay for purchasing USDC, simplifying the process for consumers to acquire stablecoins.
• A certain payment platform: Its stablecoin wallet feature 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.

U 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 to fiat currency at the point of sale.

The project includes:

• Reap: An Asian issuing company with clients including multiple enterprises, selling white label solutions, primarily relying on transaction fee commissions in cooperation with Hong Kong banks, covering most regions outside the US, and supporting multi-chain deposits; transaction volume reached $30M in July 2024.
• Raincards: A card issuer in the Americas that supports multiple companies for issuing cards, with the main feature being its service to users in the US and Latin America. They issued a USDC corporate card to pay for travel expenses, office supplies, and other daily business expenses using on-chain assets.
• Fiat24: European card issuer + web3 bank, business model similar to the above two, supports multiple companies in card issuance; Swiss license, mainly serves European + Asian users, does not yet support full-chain transactions, only specific network top-ups. Growth is slow with a total of 20,000 users and monthly revenue of $100,000 - $150,000.
• Kast: A rapidly growing U-card on a certain blockchain network, with over 10,000 cards issued, 5-6 thousand monthly active users, a trading volume of $7 million in December 2024, and an income of $200,000.
• 1Money: A stablecoin ecosystem that recently launched a credit card supporting stablecoins and provides a software development kit for easy L1 and L2 integration, no data available yet.

There are many cryptocurrency card providers, and they mainly differ in terms of service areas and supported currencies, usually offering low fees to end users to enhance their enthusiasm for using cryptocurrency cards.

2. Second Layer: Payment Processors

As a key layer in the stablecoin technology stack, payment processors are the backbone of payment channels, primarily encompassing 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 service provider A: supports over 80 types of cryptocurrencies, offers various deposit and withdrawal methods, and token swap services to meet users' diverse cryptocurrency trading needs.
• A certain deposit and withdrawal service provider B: 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 the deposit and withdrawal services.
• A hybrid payment gateway: A hybrid payment gateway solution that supports bidirectional exchange and payment between fiat currency and crypto assets, achieving the integration of traditional fiat currency and crypto asset payments.

b. Stablecoin Issuance & Coordination Processors

• Bridge: The core products of Bridge include the Coordination API and the Issuance API. The former helps enterprises integrate multiple stablecoin payments and exchanges, while the latter supports enterprises in quickly issuing 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, possessing strong compliance operation capabilities and resource advantages.
• Brale: Similar to the Bridge product, it is a regulated stablecoin issuance platform that provides stablecoin coordination and reserve management APIs. It has compliance licenses in various states across the United States. Partner companies are required to go through KYB, and users need to set up an account with Brale for KYC. Brale's clients are primarily on-chain OGs.
• Perena: The Numeraire platform by Perena lowers the issuance threshold of niche stablecoins by encouraging users to provide concentrated liquidity in a single pool. Numeraire adopts a "central hub-radiating" model, where USD* serves as the central reserve asset, acting as the "hub" for stablecoin issuance and exchange. This mechanism allows for the efficient minting, redemption, and trading of multiple stablecoins linked to different assets or jurisdictions, each stablecoin serving as a similar "spoke" connected to USD*. Through this system structure, Numeraire ensures deep liquidity and enhances capital efficiency, as smaller stablecoins can interoperate through USD* without the need to provide distributed 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 typically centered around the balance sheet, similar to bank operations - accepting customer deposits and investing the funds in high-yield assets such as U.S. Treasury bonds to earn interest margins. At the asset issuer level, stablecoin innovation can be divided into three tiers: fiat-backed stablecoins, interest-bearing stablecoins, and yield.