Stablecoin Payments: Reshaping Global Value Flow

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 Traditional payment networks face comprehensive challenges from stablecoins due to outdated infrastructure, lengthy settlement cycles, and high costs.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 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 enterprise cash flows. At the same time, a series of 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. Additionally, it discusses 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 payment?

To explore the influence of stablecoins, we first need to 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 many payment channels has existed since the 1970s. Today, most of this global payment infrastructure is outdated and highly fragmented. Overall, these payment methods are plagued by issues such as high costs, high friction, long processing times, inability to achieve round-the-clock settlement, and complex backend processes. 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, using blockchain for payment settlement greatly simplifies the payment process, reduces intermediaries, achieves real-time visibility of fund flows, shortens settlement times, and 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.
• Cost reduction: Eliminating intermediaries significantly lowers transaction fees, saving expenses for users.
• Global Coverage: Decentralized platforms can reach markets 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 stablecoin access methods, 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 facilitates transactions between buyers and sellers by securely processing payments.

Notable companies innovating in this field include:

• Stripe: A traditional payment provider that integrates stablecoins like USDC for global payments.
• MetaMask: It does not provide direct fiat currency exchange functionality itself; users can perform deposit and withdrawal operations through integration with third-party services.
• Helio: 450,000 active wallets and 6,000 merchants. With the Solana Pay plugin, millions of Shopify merchants can settle payments using cryptocurrency 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 make payments using stablecoin, further expanding the application scenarios of stablecoin.

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 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 offer application programming interfaces, software development kits, and developer tools to facilitate 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:

• BVNK: Provides enterprise-level payment infrastructure for easy integration of stablecoins. BVNK offers API solutions for seamless processes, a payment platform for cross-border commercial payments, and corporate accounts allowing businesses to hold and trade various stablecoins and fiat currencies, along with merchant services providing the tools necessary for businesses 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.
• Iron: Provides APIs to seamlessly integrate stablecoin trading into existing businesses. It offers enterprises global deposit and withdrawal channels, stablecoin payment infrastructure, wallets, and virtual accounts, supporting customized payment workflows.
• Juicyway: Offers a range of enterprise 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, with no operational data available yet.

Consumer-focused payment gateways prioritize the user, offering an easy-to-use interface that facilitates stablecoin payments, remittances, and financial services. They often include mobile wallets, multi-currency support, fiat currency deposit and withdrawal channels, and seamless cross-border transactions. Well-known projects that focus on providing 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 almost zero withdrawal fees, with over 10,000 users in South America and high ratings among Solana developers.
• Meso: Deposit and withdrawal solution, directly integrated with merchants, enabling users and businesses to easily convert between fiat currency and stablecoins with minimal friction. Meso also supports Apple Pay to purchase USDC, simplifying the process for consumers to acquire stablecoins.
• Venmo: Venmo's stablecoin wallet feature leverages stablecoin technology, but its functionality is integrated into its existing consumer payment app, allowing users to easily send, receive, and use digital dollars without directly interacting with the blockchain infrastructure.

b. 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 card issuer with clients including Infini, Kast, Genosis pay, Redotpay, and over 40 other companies, selling white-label solutions, primarily relying on transaction volume for commission and collaborating with Hong Kong banks, covering most regions outside the US, capable of supporting multi-chain deposits; the transaction volume reached 30M in July 2024.
• Raincards: A card issuer in the Americas that supports card issuance for multiple companies including Avalanche, Offramp, takenos, etc. Its main feature is the 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 expenses using on-chain assets.
• Fiat24: European card issuer + web3 bank, business model similar to the above two, supports card issuance for companies like ethsign, safepal; Swiss license, mainly serving European + Asian users, does not yet support full-chain transactions, only arbitrum deposits. Growth is slow with a total of 20,000 users, 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, projected transaction volume of 7m in December 2024, and revenue of 200k.
• 1Money: stablecoin ecosystem, recently launched a credit card that supports stablecoins and provides a software development kit for easy L1 and L2 integration, in beta with no data yet.

There are many cryptocurrency card providers, and they mainly differ in the regions they serve and the currencies they support, typically offering low fees to end users to enhance the motivation 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 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 a variety of deposit and withdrawal methods, and provides token swap services to meet users' diverse cryptocurrency trading needs.
• Ramp Network: Covers over 150 countries and provides deposit and withdrawal services for more than 90 types of crypto assets. The network handles all KYC, AML, 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 with Operators

• Bridge: The core products of Bridge include the Coordination API and the Issuance API. The former helps companies integrate various stablecoin payments and exchanges, while the latter supports companies in the rapid issuance of stablecoins. The platform is currently licensed in the United States and Europe and has established significant partnerships with the U.S. State Department and the Treasury, boasting strong compliance operational 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 partnering companies need to pass KYB, while users must establish an account on Brale for KYC. Brale's clients are more on-chain OGs, and compared to Bridge, its investment endorsements and business development are slightly weaker.
• Perena: The Numeraire platform by Perena reduces the issuance threshold for niche stablecoins by encouraging users to provide centralized liquidity in a single pool. Numeraire employs a "central hub-and-spoke" model, where USD* serves as the central reserve asset, acting as the "hub" for stablecoin issuance and exchange. This mechanism enables the efficient minting, redemption, and trading of various stablecoins linked to different assets or jurisdictions, with each stablecoin connected to USD* as similar "spokes". Through this system structure, Numeraire ensures deep liquidity and enhances capital efficiency, as small stablecoins can interoperate via USD* 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 facilitate seamless conversions between stablecoins.

3. Layer Three: Asset Issuer

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

1. Static Reserve Supported Stablecoin

The first generation of stablecoins introduced the foundational model of the digital dollar: a centrally issued token supported by a 1:1 ratio of fiat reserves held by traditional financial institutions. The main participants in this category are.