Stablecoin Payments: Reshaping the Global Financial Transaction Landscape

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 Traditional payment networks are facing comprehensive challenges from stablecoins due to outdated infrastructure, lengthy settlement cycles, and high costs. Stablecoins are rapidly innovating the model of cross-border value flow, 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 underlying infrastructure for global payments. Large fintech companies, payment processors, and sovereign entities are gradually integrating stablecoins into consumer-facing applications and corporate funding flows. At the same time, emerging financial tools, from payment gateways to deposit and withdrawal channels, and to programmable yield products, have significantly enhanced the convenience of using stablecoins.

This report provides an in-depth analysis of the stablecoin ecosystem from both technical and business perspectives. It studies the key participants 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, 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 everyday life, the infrastructure for many payment channels has existed since the 1970s. Today, most of these global payment infrastructures are outdated and highly fragmented. Overall, these payment methods are plagued by issues such as high fees, high friction, long processing times, inability to enable round-the-clock settlement, and complex backend processes. Furthermore, they often bundle unnecessary additional 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 time, and lowers costs.

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

• Real-time settlement: Transactions are completed almost instantaneously, eliminating delays found 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. 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 users.

a. Payment Gateway

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

Well-known companies innovating in this field include:

• Stripe: Traditional payment provider that integrates stablecoins like USDC for global payments.
• MetaMask: It does not provide direct fiat currency exchange functionality itself, and 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 cryptocurrencies 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 of these types, thus shaping their core products, user experience, and target market.

The payment gateway for developers aims to serve businesses, fintech companies, and enterprises that need to embed stablecoin infrastructure into their workflows. They typically offer 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 process integration, a payment platform for cross-border commercial payments, and 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 payments in stablecoins. Handling over $10 billion in annualized transaction volume, with a year-on-year growth rate of 200%, a valuation of $750 million, and clients including 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: Provides a range of enterprise payment, salary distribution, and bulk payment APIs, supporting currencies including Nigerian Naira, Canadian Dollar, US Dollar, Tether, and USDC. Primarily targeting the African market, with no operational data available yet.

Consumer-facing payment gateways are user-centric, providing an easy-to-use interface to facilitate users in making 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 focused on providing this simple payment experience for users 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, achieving almost zero withdrawal fees, with over 10,000 South American users and high ratings among Solana developers.
• Meso: A deposit and withdrawal solution that integrates directly with merchants, allowing users and businesses to easily convert between fiat currencies and stablecoins with minimal friction. Meso also supports the purchase of USDC, simplifying the process for consumers to obtain stablecoins.
• Venmo: Venmo'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 blockchain infrastructure.

b. U Card

Cryptocurrency cards are payment cards that allow users to spend cryptocurrencies 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 over 40 enterprises, selling white-label solutions, mainly relying on transaction fee commissions in cooperation with Hong Kong banks, capable of covering most regions outside the United States, and supporting multi-chain deposits; in July 2024, the transaction volume reached $30M.
• Raincards: A card issuer in the Americas that supports multiple companies in issuing cards, with the main feature being its ability to serve users in the US and Latin America. They 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, business model similar to the above two, supports multiple companies for card issuance; Swiss license, mainly serving European + Asian users, currently does not support full chain transactions, only Arbitrum deposits. Growth is slow with a total of 20,000 users and monthly revenue of $100K-150K.
• Kast: The rapidly growing U card on Solana, with over 10,000 cards issued, 5-6k monthly active users, a 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 available.

There are many cryptocurrency card providers, and they mainly differ in terms of service areas and supported currencies, usually offering low-fee services to end users to encourage the use of cryptocurrency cards.

2. Layer Two: 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 critical intermediary in the payment lifecycle, connecting payments to the traditional financial system.

a. Deposit and Withdrawal Processor

• Moonpay: Supports over 80 cryptocurrencies, offering various deposit and withdrawal methods as well as token swapping 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, 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 currency and crypto assets, achieving the integration of traditional fiat currency and crypto asset payments.

b. Stablecoin Issuance & Coordination of Processors

• Bridge: The core products of Bridge include the Coordination API and the Issuance API. The former helps enterprises integrate various 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 significant partnerships with the U.S. State Department and the Treasury, possessing 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 in the U.S., and partner companies are required to undergo KYB, while users need to set up an account on Brale for KYC. Brale's clients are mostly on-chain OGs, and compared to Bridge, the endorsement from investors and business development is slightly weaker.
• Perena: The Numeraire platform by Perena lowers the issuance threshold for niche stablecoins by encouraging users to provide centralized liquidity in a single pool. Numeraire adopts a "central hub-radiating" model, with USD* as the central reserve asset, serving as the "hub" for stablecoin issuance and exchange. This mechanism allows for the efficient minting, redemption, and trading of various stablecoins pegged 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 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 enable seamless conversions between stablecoins.

3. Third Layer: Asset Issuers

The asset issuer is responsible for the creation, maintenance, and redemption of stablecoins. Its business model is typically centered around the balance sheet, similar to how banks operate - accepting customer deposits and investing the funds in high-yield assets like U.S. Treasury bonds to earn a spread. At the level of asset issuers, stablecoin innovation can be divided into three tiers: static reserve-backed stablecoins, interest-bearing stablecoins, and profit-sharing stablecoins.

1. Static Reserve-Backed Stablecoin

The first generation of stablecoins introduced the foundational model of digital dollars: centrally issued tokens backed by a 1:1 ratio of fiat reserves held by traditional financial institutions. Major players in this category include Tether and Circle.

Tether's USDT and Circle's USDC are the most widely used stablecoins, both backed 1:1 by dollar reserves in the financial accounts of Tether and Circle.