A Deep Dive into the Stablecoin Ecosystem from Technical and Business Perspectives

The global financial system is undergoing profound changes. Traditional payment networks are facing comprehensive challenges from stablecoins due to outdated infrastructure, long settlement periods, and high costs. Stablecoins are innovating the cross-border flow of value, the paradigm of corporate transactions, and the ways individuals access financial services.

In recent years, stablecoins have continued to develop and have become an important 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, emerging financial tools such as payment gateways, deposit and withdrawal channels, and programmable yield products have greatly enhanced the usability of stablecoins.

This article 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. In addition, it explores how stablecoins are giving rise to new financial application scenarios and the challenges they face in integrating into the global economy.

1. Why choose stablecoin payment?

To understand the influence of stablecoins, we must first 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 among others. Although they have been integrated into daily life, the infrastructure of many payment channels has existed since the 1970s. Most of these global payment infrastructures are now outdated and highly fragmented. Overall, these payment methods suffer from high fees, high friction, long processing times, inability to settle around the clock, and complex backend processes. Additionally, they often require extra payments for bundling unnecessary services such as identity verification, lending, compliance, fraud protection, and bank integration.

Stablecoin payments are effectively addressing these pain points. Using blockchain for payment settlement greatly simplifies the process, reduces intermediaries, and enables real-time visibility of fund flows, not only shortening settlement times but also lowering costs.

The main advantages of stablecoin payments are 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 transaction security and transparency, 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 the unbanked population ), achieving financial inclusion.

2. Stablecoin Payment Industry Landscape

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

1. Layer 1: 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 building on the application layer, and provide credit card services for Web3 users.

a. Payment Gateway

The 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 perform deposit and withdrawal operations by integrating 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.
• Some Web2 payment applications 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. Developer-facing payment gateway; 2) Consumer-facing payment gateway. Most payment gateway providers tend to focus more on one type, thus shaping their core products, user experience, and target market.

The developer-focused 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 to integrate into existing payment systems, enabling features such as automatic payments, stablecoin wallets, virtual accounts, and real-time settlements. Some emerging projects that focus on providing such developer tools include:

• BVNK: Provides enterprise-level payment infrastructure for easy integration of stablecoins. BVNK offers API solutions to ensure seamless processes, with a payment platform for cross-border commercial payments, as well as business accounts that allow companies to hold and trade various stablecoins and fiat currencies, and merchant services that provide the necessary tools 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%, and a valuation of $750 million, clients include emerging regions such as Africa, Latin America, and Southeast Asia.
• Iron )in beta(: Provides APIs to seamlessly integrate stablecoin transactions into their 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 enterprise payment, payroll, and bulk payment APIs, supporting currencies including Nigerian Naira )NGN(, Canadian Dollar )CAD(, US Dollar )USD(, Tether )USDT(, and USD Coin )USDC(. Mainly targeting the African market, there is currently no operational data.

Consumer-facing payment gateways are user-centric, providing an easy-to-use interface that facilitates users in making 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 Western Union in Latin America, achieving almost zero withdrawal fees, with over 10,000 users in South America and high ratings among certain blockchain developers.
• Meso: Deposit and withdrawal solution, directly integrated with merchants, allowing users and businesses to easily convert between fiat currency and stablecoin with minimal friction. Meso also supports certain mobile payment methods to purchase USDC, simplifying the process for consumers to acquire stablecoin.
• A well-known payment application's 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.

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: Asian card issuer, clients include multiple enterprises, selling white-label solutions, mainly relying on transaction fees in cooperation with certain regional banks, can cover most regions outside the United States, supports multi-chain deposit; by July 2024, transaction volume reached $30M.
• Raincards: American card issuer, supports multiple companies issuing cards, with the main feature being 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 ) like USDC (.
• Fiat24: European card issuer + web3 bank, the business model is similar to the above two companies, supporting multiple enterprises to issue cards; licensed in certain regions, mainly serving European + Asian users, currently does not support full-chain transactions, only certain blockchain top-ups. Growth is slow with a total of 20,000 users and monthly revenue of $100K-150K.
• Kast: A rapidly growing U card on a certain blockchain, currently has issued over 10,000 cards, with 5-6k monthly active users, and transaction volume of $7m and revenue of $200k by December 2024.
• 1Money: The stablecoin ecosystem has recently launched a credit card supporting stablecoins and provides a software development kit for facilitating L1 and L2 integration, currently in beta with no data available.

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

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

a. Deposit and Withdrawal Processor

• A certain company: supports over 80 types of cryptocurrencies, provides various deposit and withdrawal methods and token swap services to meet users' diverse cryptocurrency trading needs.
• A certain network: covering 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.
• A certain payment gateway: a hybrid payment gateway solution that supports two-way 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 the Treasury Department, possessing strong compliance operation capabilities and resource advantages.
• Brale ) in beta(: 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) corporate identity verification(, while users must set up accounts on Brale to complete KYC. Brale's customers are primarily on-chain OGs, and compared to Bridge, its investment endorsements and business development are slightly weaker.
• Perena ) in beta (: Perena's Numeraire platform 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 various stablecoins linked to different assets or jurisdictions, with each stablecoin connected to USD* as a similar "spoke." Through this system structure, Numeraire ensures depth liquidity and enhances capital efficiency, as small stablecoins can interoperate through USD* without the need to provide dispersed 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 Issuer

Asset issuers are responsible for creating, maintaining, and redeeming stablecoins. Their business model typically revolves 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 a spread. At the asset issuer level, stablecoin innovations can be divided into three tiers: statically reserve-backed stablecoins, interest-bearing stablecoins, and profit-sharing stablecoins.

1. Stablecoins supported by static reserves

The first generation of stablecoins introduced the foundational model of digital dollars: centralized issuance supported by fiat reserves held by traditional financial institutions at a 1:1 ratio.