The Stablecoin Revolution in Progress: Resonance of Technical Architecture and Business Ecology

The global financial system is undergoing profound changes. Traditional payment networks are facing comprehensive challenges from stablecoins due to outdated infrastructure, lengthy settlement cycles, and high costs. These digital assets are reshaping cross-border value flow patterns, corporate transaction paradigms, and individual access to 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, a series of emerging financial tools, ranging from payment gateways to inflow and outflow channels, and 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 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 essential 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. Although they have become part of daily life, many payment channels, such as ACH and SWIFT, have been in place since the 1970s. While they were groundbreaking at the time, most of these global payment infrastructures are now outdated and highly fragmented.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 backend processes. Additionally, they often bundle unnecessary extra services such as identity verification, lending, compliance, fraud protection, and banking integration (for a fee).

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 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.
• Cost reduction: Eliminating intermediaries significantly reduced transaction fees, saving users money.
• Global Reach: Decentralized platforms can reach markets that are 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 levels:

1. First Layer: 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 stablecoin and offer tools for developers working at the application layer, as well as credit card services for Web3 users.

a. Payment Gateway

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

Well-known companies innovating in this field include:

• A well-known payment provider: integrating stablecoins like USDC for global payments.
• A certain cryptocurrency wallet: It does not provide direct fiat currency exchange functionality, and users can perform deposit and withdrawal operations through integration with its third-party services.
• A certain payment platform: 450,000 active wallets and 6,000 merchants. With the help of a certain payment plugin, millions of e-commerce merchants can settle payments using cryptocurrency and instantly convert USDY into other stablecoins, such as USDC, EURC, and PYUSD.
• Some 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 category, thereby shaping their core products, user experience, and target market.

The developer-oriented payment gateway is designed to serve businesses, 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 for integration into existing payment systems, enabling features such as automated payments, stablecoin wallets, virtual accounts, and real-time settlement. Some emerging projects focused on providing such developer tools include:

• A payment infrastructure provider: offers enterprise-level payment infrastructure for easy integration of stablecoins. The platform provides API solutions for seamless processes, has a payment platform for cross-border business payments, and allows enterprises to hold and trade various stablecoins and fiat currencies through corporate accounts, as well as merchant services that provide businesses with the tools needed to accept customer payments in stablecoins. Processing over $10 billion in annualized transaction volume, with a growth rate of 200%, and a valuation of $750 million, clients include emerging regions such as Africa, Latin America, and Southeast Asia.
• A certain payment API provider (in testing phase): Provides an API to seamlessly integrate stablecoin transactions 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).
• A payment service provider: offers a range of corporate payment, salary disbursement, 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, with no operational data available yet.

Consumer-focused payment gateways prioritize users by providing a simple and user-friendly interface, enabling users to make stablecoin payments, remittances, and access 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 delivering this straightforward payment experience for users include:

• A certain blockchain banking platform: enables personal consumption, remittances, and stablecoin transactions in over 184 countries; the platform collaborates with local channels in Latin America, including a well-known cross-border remittance company, to achieve almost zero withdrawal fees, with over 10,000 South American users and high ratings among developers in a certain public chain.
• A certain deposit and withdrawal solution: The deposit and withdrawal solution is directly integrated with merchants, allowing users and businesses to easily convert between fiat currency and stablecoin with minimal friction. The platform also supports the purchase of USDC through a well-known mobile payment service, simplifying the process for consumers to acquire stablecoins.
• A certain mobile payment application: The application's stablecoin wallet function 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 cryptocurrencies or stablecoins at traditional merchants. These cards are usually 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:

• A certain Asian card issuer: Clients include more than 40 enterprises, selling white-label solutions, mainly relying on transaction fees (e.g., certain clients 85%-issuer 15%) cooperating with Hong Kong banks, covering most areas outside the United States, supporting multi-chain deposits; by July 2024, the transaction volume reached $30M.
• Some American card issuers: support multiple companies in issuing cards, with the main feature being the ability to serve users in the US and Latin America. Issued a USDC corporate card to pay for travel expenses, office supplies, and other daily business expenses using on-chain assets (such as USDC).
• A certain European card issuer: European card issuer + web3 bank, the business model is similar to the above two companies, supporting multiple enterprises to issue cards; Swiss license, mainly serving European + Asian users, currently does not support full-chain transactions, only certain L2 top-ups. Growth is slow with a total of 20,000 users, monthly revenue of $100K-150K.
• Certain public chain U Card: A U Card that is growing rapidly on a certain public chain, currently has issued over 10,000 cards, with 5-6k monthly active users, projected transaction volume of $7m in December 2024, and revenue of $200k.
• A certain stablecoin ecosystem: The stablecoin ecosystem has recently launched a credit card that supports stablecoins and provides a software development kit for easy L1 and L2 integration; there is no data available during the testing phase.

There are many cryptocurrency card providers, which mainly differ in the regions they serve and the currencies they support, 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 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 serve as a crucial intermediary layer in the payment lifecycle, connecting Web3 payments with traditional financial systems.

a. Deposit and Withdrawal Processor

• A certain deposit and withdrawal service provider: supports over 80 types of cryptocurrencies, offers various deposit and withdrawal methods and token exchange services to meet users' diverse cryptocurrency trading needs.
• Certain deposit and withdrawal network: covering over 150 countries, providing 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 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 of Processors

• A stablecoin infrastructure provider: The company's core products include a coordination API and an issuance API, with the former helping businesses integrate multiple stablecoin payments and exchanges, while the latter supports companies 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 operational capabilities and resource advantages.
• A certain stablecoin issuance platform (testing phase): Similar to the products of the aforementioned companies, it is a regulated stablecoin issuance platform that provides stablecoin coordination and reserve management APIs. It has compliance licenses in various states in the US, and partner enterprises are required to undergo KYB (Know Your Business) verification, while users must set up an account on the platform for KYC (Know Your Customer). The platform's clients are primarily on-chain OGs (such as certain well-known projects), and compared to the former, the backing from investors and business development is slightly weaker.
• A certain stablecoin issuance platform (testing phase): The company’s platform reduces the issuance threshold of niche stablecoins by encouraging users to provide concentrated liquidity in a single pool. The platform 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 pegged to different assets or jurisdictions, with each stablecoin acting as a similar "spoke" connected to USD*. Through this system structure, the platform ensures deep liquidity and enhances capital efficiency, as smaller stablecoins can interoperate through USD* without the need to provide separate liquidity pools for each trading pair. The ultimate design of the system...