The Stablecoin Payment Revolution: Resonance of Technical Infrastructure and Business Ecosystem

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 Traditional payment networks are facing comprehensive challenges from stablecoins due to outdated infrastructure, lengthy settlement cycles, and high costs.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 revolutionizing 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 cash flows. At the same time, a series of emerging financial tools, from payment gateways to deposit and withdrawal 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 fostering new financial application scenarios and the challenges they face as they become increasingly integrated into the global economic process.

1. Why choose stablecoin payment?

To understand the impact of stablecoins, it is first necessary to examine traditional payment solutions. These traditional systems encompass cash, checks, debit cards, credit cards, international wire transfers, automated clearing houses, and peer-to-peer payments. Although they have been integrated into daily life, many payment channels, such as the infrastructure of ACH and SWIFT, have 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 While they were groundbreaking at the time, most of these global payment infrastructures are now outdated and highly fragmented.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 settle around the clock, and complex backend processes. Moreover, they often bundle unnecessary additional services such as authentication, lending, compliance, fraud protection, and bank integration.

Stablecoin payments are effectively addressing these pain points. Compared to traditional payment methods, utilizing blockchain for payment settlement greatly simplifies the payment process, reduces intermediaries, achieves real-time visibility of cash flow, not only shortens settlement time 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 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 costs 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 levels:

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 securely processes payments and facilitates 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; users can perform deposit and withdrawal operations through integration with its 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 stablecoins, further expanding the application scenarios for stablecoins.

The field of payment gateway providers can be clearly divided into two categories.

1. developer-oriented payment gateway; 2) consumer-oriented payment gateway. Most payment gateway providers tend to focus more on one of these categories, thereby shaping their core products, user experience, and target market.

The developer-oriented payment gateway is designed to serve enterprises, fintech companies, and businesses that need to integrate stablecoin infrastructure into their workflows. They typically provide 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 settlements. 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 that seamlessly connect processes, with a payment platform for cross-border commercial payments, as well as enterprise accounts that allow businesses to hold and trade various stablecoins and fiat currencies, 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 growth rate of 200%, and a valuation of $750 million, clients include emerging regions such as Africa, Latin America, and Southeast Asia.
• Iron: Provides an API that seamlessly integrates stablecoin transactions into its existing business. 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. Supported currencies include Nigerian Naira, Canadian Dollar, US Dollar, Tether, and USD Coin. Mainly targeting the African market, with no operational data available yet.

Consumer-focused payment gateways prioritize the user, providing a simple and easy-to-use interface for 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. Some well-known projects that focus on providing users with this simple payment experience include:

• Decaf: 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 nearly zero withdrawal fees, boasting over 10,000 South American users and receiving 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 stablecoin with minimal friction. Meso also supports Apple Pay to purchase USDC, simplifying the process for consumers to acquire stablecoins.
• Venmo: The stablecoin wallet feature of Venmo 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 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: A card issuer in Asia, with clients including Infini, Kast, Genosis pay, Redotpay and over 40 other companies, selling white-label solutions, primarily relying on transaction fee commissions in cooperation with Hong Kong banks, capable of covering most regions outside the United States, supporting multi-chain deposits; by July 2024, the transaction volume reached $30M.
• Raincards: American card issuer, supports Avalanche, Offramp, takenos, and other companies for card issuance, 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.
• Fiat24: European card issuer + web3 bank, business model similar to the above two, supports issuing cards for companies like ethsign, safepal; Swiss license, mainly serves European + Asian users, currently does not support full-chain trading, only allows arbitrum deposits. Slow growth with a total of 20,000 users, monthly revenue of $100K-150K.
• Kast: Rapidly growing U cards 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: the stablecoin ecosystem has recently launched a credit card supporting stablecoins and provides a software development kit for easy L1 and L2 integration, currently in beta with no data available.

There are many cryptocurrency card providers, and they mainly differ in terms of service areas and supported currencies. They typically offer low-fee services to end users to enhance the enthusiasm for 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 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 various deposit and withdrawal methods as well as 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 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 across the United States, and partner companies must go through KYB, while users need to set up an account on Brale for KYC. Brale's customers are more on-chain OGs, and compared to Bridge, the endorsements and business development from investors are slightly weaker.
• Perena: The Numeraire platform of Perena 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 connecting to USD* as a similar "spoke." Through this system structure, Numeraire ensures deep liquidity and enhances capital efficiency, as smaller stablecoins can interoperate through USD*, without needing to provide separate 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 Issuers

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