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

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 Traditional payment networks face comprehensive challenges from stablecoins due to outdated infrastructure, lengthy settlement cycles, and high costs.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 the modes of cross-border value flow, corporate transaction paradigms, and individuals' 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 funding flows. Meanwhile, 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 a deep 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 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 first necessary 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 infrastructure that has existed 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 While they were groundbreaking at the time, most of these global payment infrastructures are now outdated and highly fragmented.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, the inability to achieve round-the-clock settlement, and complex back-end processes. Additionally, they often come bundled with unnecessary extra services that require payment for 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, and achieves real-time visibility of fund flows, which not only shortens settlement times 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.
• Cost reduction: Eliminating intermediaries has significantly reduced transaction fees, saving users money.
• 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 subdivided into four technical stack levels:

1. Layer One: 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 stablecoin access methods, offer tools for developers working at the application layer, and provide credit card services for Web3 users.

a. Payment Gateway

Payment gateways are services that facilitate transactions between buyers and sellers by securely processing payments.

Notable companies innovating in this field include:

• A payment company: Traditional payment providers integrating stablecoins like USDC for global payments.
• A non-custodial wallet: It does not provide direct fiat currency exchange features; 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 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 for 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 type, thus shaping their core products, user experience, and target market.

The developer-focused payment gateway aims to serve enterprises, fintech companies, and businesses that need to embed stablecoin infrastructure into their workflows. They typically offer application programming interfaces (APIs), software development kits (SDKs), and developer tools for integration into existing payment systems to enable functionalities such as automated payments, stablecoin wallets, virtual accounts, and real-time settlement. Some emerging projects that focus on providing such developer tools include:

• Enterprise-level payment infrastructure: Provides enterprise-level payment infrastructure for easy integration of stablecoins. The platform offers API solutions for seamless processes, has a payment platform for cross-border commercial payments, and allows enterprises to hold and trade various stablecoins and fiat currencies through enterprise accounts, along with merchant services that provide the tools needed for businesses to accept customer stablecoin payments. Processing 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.
• A stablecoin API integration platform (testing phase): Provides APIs to seamlessly integrate stablecoin transactions into existing business operations. 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 corporate payment API platform: provides a range of corporate payment, salary distribution, 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 are currently no operational data.

Consumer-focused payment gateways prioritize the user, offering an easy-to-use interface that facilitates 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:

• A bank platform on a certain blockchain: enabling personal consumption, remittances, and stablecoin transactions in over 184 countries; the platform collaborates with local channels, including a certain remittance company, in Latin America to achieve nearly zero withdrawal fees, with over 10,000 South American users, and is highly rated among certain blockchain developers.
• 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 stablecoins with minimal friction. The platform also supports certain mobile payment purchases of USDC, simplifying the process for consumers to acquire stablecoins.
• A certain mobile payment application: The stablecoin wallet feature of this application 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 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:

• A certain Asian card issuer: An Asian card issuer with over 40 corporate clients, selling white-label solutions, primarily relying on transaction fee commissions (e.g., a certain client 85% - the company's 15%) and collaborating with Hong Kong banks, can cover most areas outside the United States, and supports multi-chain deposits; the transaction volume reached $30M in July 2024.
• Some card issuers in the Americas: Card issuers in the Americas support multiple companies and are characterized by their ability to serve users in the United States 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 (such as USDC).
• A European card issuer: European card issuer + web3 bank, the business model is similar to the above two, supporting multiple companies to issue cards; Swiss license, mainly serving European + Asian users, currently does not support full-chain transactions and can only recharge on specific blockchains. Growth is slow with a total of 20,000 users, monthly revenue of $100K-150K.
• A certain blockchain U card: A U card that is growing rapidly on a certain blockchain, with over 10,000 cards issued, a monthly active user count of 5-6k, a transaction volume of $7m in December 2024, and an income of $200k.
• A certain stablecoin ecosystem: The stablecoin ecosystem has recently launched a credit card that supports stablecoins and provides a software development kit to facilitate L1 and L2 integration. There is no data available in the testing phase.

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

2. Second Layer: Payment Processor

As a key layer in the stablecoin technology stack, payment processors are the backbone of payment channels, primarily 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 Web3 payments with traditional financial systems.

a. Deposit and Withdrawal Processor

• A certain cryptocurrency payment platform: 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 deposit and withdrawal network: covering over 150 countries, providing deposit and withdrawal services for more than 90 types of crypto assets. This network handles all KYC (Know Your Customer), AML (Anti-Money Laundering), and compliance requirements, ensuring the compliance and security of the deposit and withdrawal services.
• A hybrid payment gateway: A hybrid payment gateway solution that supports bi-directional exchange and payment between fiat currency and crypto assets, realizing the integration of traditional fiat currency and crypto asset payments.

b. Stablecoin Issuance & Coordination Processors

• A certain stablecoin infrastructure platform: The core products of this platform include a coordination API and an 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 important partnerships with the U.S. State Department and the Treasury, possessing strong compliance operational capabilities and resource advantages.
• A certain regulated stablecoin platform (testing phase): Similar to the aforementioned platform 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 enterprises are required to undergo KYB (Know Your Business), while users must create accounts on the platform for KYC (Know Your Customer). The clients of this platform are mostly on-chain OGs, and compared to the aforementioned platform, their investment background and business development capabilities are slightly inferior.
• A certain stablecoin issuance platform (testing phase): This platform's certain product lowers the issuance threshold for niche stablecoins by encouraging users to provide concentrated liquidity in a single pool. The product employs a "central hub-radiating" model, with USD* as the central reserve asset, acting as the "hub" for stablecoin issuance and exchange. This mechanism allows multiple stablecoins linked to different assets or jurisdictions to be efficiently minted, redeemed, and traded, with each stablecoin acting as a similar "spoke" connected to USD*. Through this system structure, the product ensures deep liquidity and enhances capital efficiency, as smaller stablecoins can interoperate through USD*.