Stablecoin Settlement System: From Minting to Integrated Four-Layer Infrastructure and Power Structure Analysis

The global payment system is undergoing a silent but fundamental transformation. Throughout 2025, the on-chain transfer volume of stablecoins reached approximately $33 trillion, roughly twice the total annual payment volume of Visa. Entering 2026, this trend accelerates further—just in January, the on-chain transfer volume of stablecoins hit $10.3 trillion, nearly matching the total fiat currency payments of Mastercard for the entire fiscal year 2025. Visa has launched USDC settlement services for financial institutions in the U.S., and in March 2026, Mastercard announced the acquisition of stablecoin infrastructure company BVNK for up to $1.8 billion. PayPal has launched its proprietary stablecoin PYUSD in over 70 markets.

The settlement layer has changed. But a core question arises: when institutional finance begins to rely on this new settlement layer, who are they actually depending on? Who is behind the control of stablecoin settlement? This article will analyze, based on on-chain data and industry trends, the actual control structure of stablecoin settlement infrastructure from four perspectives: supply, distribution, custody, and integration.

Settlement Panorama: Institutional Dominance in a Trillion-Dollar Scale

According to Gate market data, as of April 13, 2026, the total market cap of global stablecoins has reached about $318.6 billion, an increase of over 150% from approximately $125 billion at the start of 2024. Among them, Tether (USDT) has a market cap of about $184.4 billion, and USDC about $78.6 billion, with the two issuers controlling over 84% of the total stablecoin market cap.

On-chain transfer data reveals deeper structural changes. In January 2026, the total on-chain transfer volume of stablecoins reached $10.3 trillion. For comparison, Visa’s total fiat payments in fiscal year 2025 were $16.7 trillion, and Mastercard’s total payments in the same period were about $10.6 trillion. In other words, the monthly on-chain transfer volume of stablecoins nearly matches the annual fiat settlement volume of one of the world’s largest card networks.

USDC’s transfer volume is about five times that of USDT, despite its market cap being only around 42% of the latter. This reveals a key difference: USDT dominates holdings, USDC dominates liquidity.

Transfer volume, source: Dune

USDC’s dominance in settlement stems from it being the preferred settlement token for institutional finance. Visa has chosen USDC as its core asset for stablecoin settlement, JPMorgan uses USDC on Solana for debt settlement, and Stripe’s stablecoin infrastructure also runs on USDC. This separation of “holding” and “liquidity” indicates that the control of the stablecoin settlement layer is not by the largest issuer but by a few entities deeply integrated into institutional finance.

Supply Layer: Two Minters, One Settlement System

The supply layer of stablecoin settlement infrastructure is highly concentrated, with only two core players—Circle and Paxos.

Circle mints USDC, which in January 2026 alone transferred about $8.3 trillion. Paxos mints PYUSD for PayPal, and USDG for the global dollar network anchored by institutions like Mastercard, Robinhood, Kraken, and DBS Bank. As of April 2026, PYUSD’s market cap is about $330k, and USDG’s is about $103k.

All mainstream stablecoins entering institutional settlement systems—whether via card networks, payment platforms, or banking channels—ultimately trace back to Circle or Paxos.

On-chain data further reveals the flow of funds after minting. Arkham Intelligence data shows Paxos has cumulatively pushed out about $89.2 billion, involving over 5,200 minting and burning transactions. Recipients include Binance (~$22 billion), Wintermute (~$12.77 billion), Jane Street (~$6 billion), and Coinbase (~$2 billion).

Paxos, source: Arkham Intelligence

Similarly, Circle’s data shows total minting and burning activities of about $6.17 billion, with Wintermute (~$1.64 billion) and Coinbase (~$2.1 billion).

Circle, source: Arkham Intelligence

An often overlooked point: minting and burning of stablecoins bypass the entire banking agent system. When institutions like Binance, Wintermute, or Jane Street receive newly minted stablecoins from Paxos, these funds are used to fund PayPal merchant payments, settle Mastercard acquiring obligations, or provide liquidity to Visa banking partners. Stablecoins are minted on demand for settlement needs and redeemed after settlement.

This “on-demand minting—instant burn” mode does not exist within the agent bank system. This is the fundamental mechanism allowing stablecoin infrastructure to replace traditional settlement pathways.

Distribution and Custody Layer: Coinbase’s Hub Role and Fireblocks’ Custody Nodes

Below the supply layer, the distribution and custody layers are also highly concentrated.

Distribution Layer. Coinbase appears as a key counterparty for both Circle and Paxos, becoming the sole distribution node bridging the two major minters. Wintermute is another critical distributor, acting as an institutional market maker responsible for introducing newly minted stablecoins into the market. This distribution path completely bypasses traditional bank agent chains.

Custody Layer. Stablecoins require custody infrastructure between minting and redemption. The data on USDG holdings is most revealing: USDG is designed specifically for Mastercard’s global dollar network, with its largest holder being Fireblocks custody, holding about $150 million, nearly 9% of supply. Kraken (a global dollar network partner) holds about $129 million.

Fireblocks also serves as the custodian for USDC operations for banks, including providing services on Solana for Visa. This means the same custodian provider is at the intersection of Mastercard (via USDG) and Visa (via USDC) settlement tracks.

The full path of stablecoin settlement infrastructure is now clear: Circle and Paxos mint; Coinbase and Wintermute distribute; Fireblocks and exchange cold wallets custody. Extending beyond card networks into a broader ecosystem—Paxos’ entity page confirms its infrastructure also supports payment processing for Mercado Pago, Latin America’s largest fintech platform. From minting to redemption, institutional finance relies on the same highly concentrated crypto stablecoin providers.

Integration Layer: Four Strategies, One Underlying Infrastructure

Institutions connect to stablecoin settlement pathways in various ways, but ultimately all access the same underlying infrastructure.

Visa: The Most Complete Transition. By early 2026, Visa’s stablecoin settlement project processes over $3.5 billion annually, operating across multiple blockchains including Ethereum, Solana, and Avalanche. Visa supports four stablecoins across four chains: USDC, PYUSD, USDG, and EURC, on Solana, Ethereum, Stellar, and Avalanche. Visa has also partnered with Allium Labs to build an on-chain analytics dashboard tracking approximately $12.9 trillion of adjusted stablecoin transactions, integrating on-chain data into core business intelligence.

On-chain analytics dashboard: Visaonchainanalytics.com

Mastercard: Multi-Track and Strategic Acquisition. Mastercard supports four stablecoins (USDC, PYUSD, USDG, FIUSD) via its network and has joined Paxos’ global dollar network. In March 2026, Mastercard announced the acquisition of stablecoin infrastructure company BVNK for up to $1.8 billion, including a $300 million contingent payment. This is the largest stablecoin infrastructure deal to date, marking deep involvement of the card network in underlying settlement pathways.

Stripe: Direct Infrastructure Acquisition. In 2024, Stripe acquired stablecoin orchestration platform Bridge for $1.1 billion, and also acquired Privy, supporting over 110 million programmable wallets. By early 2026, Bridge obtained a conditional OCC trust license as a national bank. Bridge now supports Visa’s stablecoin-linked cards and Stripe’s own stablecoin financial accounts in 101 countries, all running on Circle’s USDC.

PayPal: Self-Developed Stablecoin but Still Relying on Paxos. PayPal launched its own stablecoin PYUSD, but its minting is still handled by Paxos. PYUSD’s daily circulation velocity on Solana is about 0.6 times that on Ethereum, four times higher, and it shares the same settlement chain as Visa.

Four strategies, one underlying infrastructure: Circle or Paxos for minting, Coinbase for distribution, Fireblocks for custody. No institution is building a new pathway from scratch. This confirms a structural judgment: stablecoin settlement infrastructure has become the default choice for institutional finance, and the number of players controlling this infrastructure is extremely limited.

Regulatory Framework: GENIUS Act and Global Compliance Agencies

Clear regulation is the institutional prerequisite for stablecoins to become a settlement layer.

U.S.: The GENIUS Act Enacted. On July 18, 2025, the U.S. Congress officially signed the “Genuine and Establishing US Stablecoin Innovation Act” (GENIUS Act), creating a federal legal framework for payment stablecoins. The act defines the legal status of “payment stablecoins”—digital assets pegged to fiat currency used for payments or settlement—and stipulates that only licensed Payment Stablecoin Issuers (PPSI) can legally issue. In February 2026, the OCC issued a proposed rulemaking notice establishing a comprehensive regulatory framework covering licensing, reserves, prudential standards, custody, capital, and reporting. Major federal agencies must issue implementing rules by July 18, 2026, with the law taking effect on January 18, 2027, or 120 days after the final rules are published, whichever is earlier.

EU: MiCA Fully Implemented. The EU’s Markets in Crypto-Assets Regulation (MiCA) has been applying reserve and transparency requirements to stablecoin issuers since June 2024, with full enforcement starting in 2025. Between October 2025 and March 2026, USDC trading volume within the EU increased by 109%. However, regulatory battles continue—France’s central bank is pushing to tighten MiCA rules to restrict non-euro stablecoins (especially USD stablecoins) from being used for payments within the eurozone.

The establishment of a regulatory framework marks a watershed: stablecoins evolve from “crypto-native tools” to “institutional settlement infrastructure.” The GENIUS Act and MiCA provide a regulatory moat for compliant issuers like Circle and Paxos, further concentrating supply.

Risk Assessment: Concentration Risks and Security Vulnerabilities

Risk scenario analysis

The four-layer concentration of stablecoin settlement infrastructure, while increasing efficiency, also creates systemic risk exposure.

Supply Layer Concentration Risk. Circle and Paxos together supply nearly all stablecoins entering institutional settlement systems. Any operational disruption, regulatory penalty, or reserve management issue with either could cause a complete blockage of institutional settlement channels. This risk is not hypothetical— in March 2026, Circle’s stock plummeted about 20% in a single day due to a regulatory draft leak, evaporating billions in liquidity within minutes.

Distribution Layer Single Point Dependency. Coinbase, as a key distribution node for both Circle and Paxos, if affected by technical failures, regulatory actions, or cyberattacks, would directly block the primary distribution channel from minting to market.

Custody Layer Concentration. Fireblocks, serving both Visa and Mastercard stablecoin settlement custody needs, means a security breach at this single custodian could impact multiple settlement pathways simultaneously.

Security Vulnerabilities. In March 2026, Resolv Labs’ USR stablecoin was attacked due to private key leakage, with hackers minting about $80 million of uncollateralized tokens, causing USR to depeg and plummet about 56%. This event highlights that even stablecoins with external collateral can be compromised by single-point permission vulnerabilities. When mapped onto the highly centralized four-layer infrastructure, systemic vulnerabilities become even more pronounced.

Multi-scenario Evolution

Baseline Scenario. In the foreseeable future, the four-layer concentration will deepen. Compliance hurdles from the GENIUS Act and MiCA raise entry barriers, allowing existing players to further consolidate their market position. Dependence on stablecoin settlement will continue to grow, but redundancy mechanisms will also be established gradually.

Counter Scenario 1: Regulatory Fragmentation. If U.S. federal and state regulators diverge significantly, or the EU tightens restrictions on non-euro stablecoins, regional fragmentation of the global stablecoin settlement layer could occur. Institutions may need to switch between multiple compliant systems, increasing operational complexity.

Counter Scenario 2: Trust Crisis from Security Incidents. Major security breaches involving core issuers, key distribution nodes, or custody providers could trigger reassessment of stablecoin settlement infrastructure, prompting demands for stricter audits, multi-issuer backups, or self-custody solutions.

Counter Scenario 3: Rise of Decentralized Alternatives. Although current supply is dominated by centralized issuers, ongoing iterations of over-collateralized and algorithmic stablecoins could, in the long term, offer alternative settlement solutions. However, institutional demands for compliance, traceability, and stability mean that such alternatives face high barriers in the medium term.

Future Outlook: Evolution of the Settlement Layer

Based on the current trend of increasing centralization across four layers, the following directions are projected:

First, the infrastructure layer may further converge. Beyond Circle and Paxos, new compliant issuers will face extremely high entry barriers—requiring compliance with both GENIUS and MiCA, and establishing partnerships with major distributors and custodians. Mastercard’s acquisition of BVNK (up to $1.8 billion) exemplifies a path of entering infrastructure via acquisition rather than building from scratch.

Second, the distribution layer may diversify but remain hub-centric. As more institutional market makers enter crypto markets, the number of distribution nodes may increase, but Coinbase’s position as a bridge across major minters is unlikely to be easily replaced in the short term.

Third, the custody layer will face tighter regulatory scrutiny. As providers like Fireblocks become increasingly critical to institutional settlement, regulators may subject them to frameworks similar to traditional central securities depositories (CSDs).

Fourth, the global and regional settlement networks will evolve in parallel. USDC and USDT will continue to strengthen their roles as global dollar settlement rails; meanwhile, euro-stablecoins under MiCA, Hong Kong dollar stablecoins, and RMB stablecoins in cross-border payment pilots may form regional settlement networks. These will share similar underlying tech stacks and compliance logic but may develop into distinct settlement circles.

Conclusion

Stablecoin settlement infrastructure has become the new settlement layer for institutional finance. This is not because institutions have “embraced crypto,” but because a few players have built a faster, cheaper, 24/7 capital pipeline than the traditional agent bank system, and mainstream institutions have chosen to connect rather than build their own.

This infrastructure comprises four highly concentrated layers: supply led by Circle and Paxos; distribution by Coinbase and Wintermute; custody by Fireblocks; and integration through strategies by Visa, Mastercard, Stripe, and PayPal—all accessing the same underlying facilities. The key players at each layer are few and deeply interconnected.

From an industry structure perspective, the current stablecoin settlement infrastructure resembles the early backbone of the internet—where the performance of a few critical nodes determines the entire system’s throughput. This is both a source of efficiency and a point of systemic risk.

The settlement pathways are in place. The real question is: will the next wave of institutional adoption diffuse this dependency or deepen it? When Visa’s annual processing exceeds $3.5 billion, Mastercard invests $1.8 billion in infrastructure, and JPMorgan prioritizes blockchain strategies, the answer seems to lean toward the latter.