Stablecoin Revolution: Technological Innovation and Business Ecosystem Resonance

The global financial system is undergoing profound changes. Traditional payment networks are facing comprehensive challenges from stablecoins due to outdated infrastructure, lengthy settlement periods, and high costs. These digital assets are revolutionizing cross-border value flow models, 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 sovereign entities are gradually integrating stablecoins into consumer-facing applications and corporate cash flows. At the same time, 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 being widely integrated into the global economic process.

1. Why choose stablecoin payments?

To explore the influence of stablecoins, it is essential to first examine traditional payment solutions. These traditional systems include cash, checks, debit cards, credit cards, international wire transfers (SWIFT), Automated Clearing House (ACH), and peer-to-peer payments, among others. Although they have become integrated into daily life, many payment channels, such as ACH and SWIFT, have been in existence since the 1970s. While they were pioneering at the time, most of these global payment infrastructures have now become outdated and highly fragmented.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 round-the-clock settlement, and complex backend procedures. Additionally, they often require payment for unnecessary extra services bundled with identity verification, lending, compliance, fraud protection, and banking integration.

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, which not only shortens settlement time but also lowers costs.

The main advantages of stablecoin payments can be summarized as follows:

• Real-time settlement: Transactions are completed almost instantaneously, 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.
• Lower costs: Removing intermediaries significantly reduces 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 divided into four technical stack layers:

( 1. Layer 1: Application Layer

The application layer is primarily 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

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

Notable companies innovating in this field include:

• Stripe: A traditional payment provider that integrates stablecoins like USDC for global payments.
• MetaMask: does not provide direct fiat currency exchange functionality itself; users can achieve 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 Shopify merchants can settle payments with cryptocurrency and instantly convert USDY to other stablecoins, such as USDC, EURC, and PYUSD.

The domain of payment gateway providers can be clearly divided into two categories, with certain overlaps existing.

1( developer-oriented payment gateway; 2) consumer-oriented payment gateway. Most payment gateway providers tend to focus more on one type, thereby shaping their core products, user experience, and target market.

The developer-oriented payment gateway is designed to serve enterprises, fintech companies, and businesses that need to embed stablecoin infrastructure into their workflows. They typically offer Application Programming Interfaces (API), Software Development Kits )SDK), and developer tools for integration into existing payment systems to enable functionalities 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-level payment infrastructure for seamless integration of stablecoins. BVNK offers API solutions that ensure a seamless process, with a payment platform for cross-border commercial payments, as well as corporate 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-on-year growth rate of 200%, and a valuation of $750 million, its clients include emerging regions such as Africa, Latin America, and Southeast Asia.
• Iron: Provides an API to seamlessly integrate stablecoin transactions into its existing business. It offers enterprises 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, payroll distribution, and bulk payment APIs, supporting currencies including Nigerian Naira )NGN(, Canadian Dollar )CAD(, US Dollar )USD(, Tether )USDT(, and USD Coin )USDC(. Primarily targeting the African market, there are currently no operational data.

Consumer-oriented payment gateways are user-centric, providing a simple and easy-to-use interface that facilitates 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 focusing on providing users with this simple payment experience include:

• Decaf: An on-chain banking platform that facilitates personal consumption, remittances, and stablecoin transactions in over 184 countries; Decaf collaborates with local channels, including MoneyGram, in Latin America to achieve almost zero withdrawal fees, with over 10,000 South American users and high ratings among Solana developers.
• Meso: Deposit and withdrawal solutions, directly integrated with merchants, enabling users and businesses to easily convert between fiat currency and stablecoins with minimal friction. Meso also supports Apple Pay for purchasing USDC, simplifying the process for consumers to acquire stablecoins.

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 like Visa or Mastercard, enabling seamless transactions by automatically converting cryptocurrency assets into fiat currency at the point of sale.

The project includes:

• Reap: A payment service provider in Asia, with clients including Infini, Kast, Genosis pay, Redotpay, Ether.fi, and over 40 other enterprises, selling white-label solutions, mainly relying on transaction fee commissions in partnership with Hong Kong banks, covering most areas outside the United States, supporting multi-chain deposits; by July 2024, the transaction volume reached $30M.
• Raincards: A card issuer in the Americas, supporting card issuance for multiple companies such as Avalanche, Offramp, takenos, etc., with the main feature being its ability to serve users in the US and Latin America. I issued a USDC corporate card to pay for travel expenses, office supplies, and other daily business costs using on-chain assets.
• Fiat24: European card issuer + web3 bank, the business model is similar to the above two companies, supporting card issuance for enterprises like ethsign, safepal; Swiss license, mainly serving users in Europe + Asia, currently does not support full-chain transactions and can only recharge via Arbitrum. Growth is slow with a total user base of 20,000, monthly revenue of $100K-150K.
• Kast: A rapidly growing U card on Solana, currently issued over 10,000 cards, with 5-6k monthly active users, $7m in transaction volume by December 2024, and $200k in revenue.
• 1Money: The stablecoin ecosystem recently launched a credit card that supports stablecoins and provides a software development kit for easy L1 and L2 integration, currently in beta with no data available.

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

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) 2. Layer 2: Payment Processor

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

a. Deposit and Withdrawal Processor

• Moonpay: supports over 80 cryptocurrencies, offers various deposit and withdrawal methods as well as token swap services to meet users' diverse cryptocurrency trading needs.
• Ramp Network: Covers over 150 countries, providing deposit and withdrawal services for more than 90 types of 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 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

• Bridge: Bridge's core products include the Coordination API and Issuance API. The former helps businesses integrate various stablecoin payments and exchanges, while the latter supports businesses 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 the 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, and partner companies are required to undergo KYB, while users need to set up an account with Brale for KYC. Brale's customers are more on-chain OGs, and compared to Bridge, its investment endorsements and business development are slightly weaker.
• Perena: The Numeraire platform by Perena lowers the issuance threshold for niche stablecoins by encouraging users to provide concentrated liquidity in a single pool. Numeraire adopts a "central hub-radiating" model, with USD* 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, with each stablecoin acting 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 needing to provide separate 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 conversions between stablecoins.

( 3. Layer Three: Asset Issuers

Asset issuers are responsible for creating, maintaining, and redeeming stablecoins. Their business model is typically centered around a balance sheet, similar to bank operations - accepting customer deposits and investing the funds in high-yield assets such as U.S. Treasuries to earn a spread. At the asset issuer level, stablecoin innovation can be divided into three tiers: static reserve-backed stablecoins, yield-bearing stablecoins, and revenue-sharing stablecoins.

1. Static Reserve Supported Stablecoin

The first generation of stablecoins introduced the digital dollar.