Leased Tracks: Why is this wave of stablecoin FX hot money really buying?

Author: Cao Legong, The Crypto Dog’s Adventure

Recently, I was chatting with an American investor, and he said something that left a deep impression on me: Buying shares of Circle doesn’t actually mean gaining “stablecoin exposure.”

Thinking about it carefully, that’s indeed the case. CRCL is essentially a reserve fund earning interest during a rate-cutting cycle, and it has little to do with the trading volume of stablecoins, cross-border flows, merchant networks, and other assets that are truly being re-priced.

What the market is truly re-pricing is the transaction layer—the layer between stablecoin issuers and the real economy. And in the past sixty days, capital has been pouring into this layer quite aggressively.

Major moves within sixty days

OpenFX raised $94 million in Series A, with an estimated valuation of about $500 million.

Tether made a strategic investment in Axiym, aiming to embed USDT into global payment channels.

Mastercard acquired the stablecoin infrastructure unicorn BVNK for up to $1.8 billion.

Meanwhile, XTransfer, a small-to-medium enterprise cross-border payment company, filed an IPO prospectus on the Hong Kong Stock Exchange, with a pre-IPO valuation of around $3 billion. I include XTransfer not because it belongs to this wave of stablecoin stories, but as a benchmark: to see how much the secondary market is willing to pay for a truly profitable, audited, licensed cross-border FX company.

The story is real, the volume is real, and regulatory tailwinds are real—especially the US GENIUS Act, which indeed gives institutional capital a “reason to bet.”

But honestly, many of the so-called “native stablecoin” players in this wave aren’t doing anything fundamentally new. Essentially, they are still following the 2018 cross-border PSP model—just replacing the settlement step with stablecoins. The innovation is real; the valuation, however, is another matter—let’s call it “a $500 million wrapper.”

What exactly is OpenFX?

OpenFX’s story is told very well: using stablecoins as a fiat-to-fiat intermediary layer, eliminating the need for nostro accounts’ pre-deposits, and compressing T+2 settlement into under 60 minutes. Within twelve months, the annualized trading volume grew from $4 billion to $45 billion. CEO Prabhakar Reddy is a co-founder of FalconX, and the backing investor lineup is top-tier.

But one thing must be clarified: OpenFX is not a multi-licensing financial institution.

Apart from a US MSB license, it mainly relies on partner banks in other markets—Europe via SEPA, the UK via FPS, Australia via NPP—all through local partners. Compliance outsourcing in each market is handled by “licensed and regulated entities.” Virtual accounts are still on the roadmap.

Reddy himself is quite frank:

“Getting licensed globally takes three times longer than you expect. Even those banks that openly claim to be ‘stablecoin-friendly’—getting the cooperation fully operational is much more complicated than the press releases suggest. Last-mile liquidity is built corridor by corridor.”

This almost perfectly describes the path Airwallex took from 2015 to 2020: first partnering with local banks, capturing FX spreads from multinational banks, then gradually obtaining licenses market by market. It took ten years and $1.57 billion to build the licensing moat behind today’s $8 billion valuation.

OpenFX was founded only two years ago. From this perspective, the $94 million Series A is more like an entry ticket than a medal in this licensing marathon. This isn’t criticism—just clarifying why investors are willing to pay.

But there’s also a more generous interpretation.

OpenFX might simply be executing a “scale first, licensing later” script—one that has proven successful for several infrastructure companies in crypto.

Ondo Finance, before SEC investigations concluded, achieved a 58% market share in tokenized stocks and about $2 billion in tokenized US debt TVL; the investigation was ongoing until November 2025, after which Ondo acquired Oasis Pro, bringing broker-dealer, ATS, and transfer agent licenses all at once. GSR—this crypto market maker—just last month received its first external strategic investment from Standard Chartered’s SC Ventures, after 12 years and $287 million in revenue, $8B net profit, and over 80,000 SME clients, it finally brought a regulated bank into its shareholder lineup.

The pattern is quite consistent: in markets where the regulatory framework is still incomplete, players who first build scale tend to define “compliance” afterward, rather than rushing to fit into an absent template.

Can OpenFX replicate this script in the cross-border payments sector? That’s an open question. Cross-border payments are more fragmented than equity tokenization or crypto market-making: regulation varies by country, licenses depend on channels, and banking relationships are local. Capital is priced based on the assumption that the “path to compliance” can be navigated.

Western investors vs. Asian players

Stablecoins as a settlement layer for cross-border FX is indeed a genuine innovation. It reduces the most hidden and largest cost in cross-border payments—pre-deposits. Improving capital efficiency by hundreds of basis points, multiplied by trillions of dollars in annual cross-border flows, can constitute a significant re-pricing event.

But beyond that, there’s nothing particularly new. Local bank partnerships, multi-currency virtual accounts, mid-market FX quotes, API-first integrations—these are standard moves that Asian and European cross-border PSPs have been executing for years. Many are profitable, and most are actively integrating stablecoins.

Three points in this table are especially noteworthy.

First, Asian players have significantly higher capital efficiency. Tazapay achieved similar growth curves to OpenFX with roughly half the funding and is already profitable. KUN received about half of OpenFX’s funding but is growing at 200% month-over-month. The Asian approach is to first obtain licenses and then slowly burn through capital; Western stablecoin players tend to raise large-tier funding upfront and secure licenses afterward.

Second, the same stablecoin issuers and major financial institutions are backing different players, but at vastly different valuations. Tether invested in Axiym. Circle Ventures and Ripple invested in Tazapay. Visa and Citi Ventures invested in BVNK. Stripe paid $1.1 billion for Bridge; Mastercard acquired BVNK for $1.8 billion.

The strategic logic is essentially the same, and it’s worth clarifying: stablecoin issuers don’t hold PSP or MSB licenses themselves, don’t perform KYC for end merchants, and can’t deploy USDT or USDC across 140 jurisdictions alone. They must partner with entities that have last-mile compliance capabilities. So these “investments” are essentially distribution agreements disguised as equity—buying channels. The core logic of Axiym’s deal and Tazapay’s deal is the same; the only difference is the size of the final buyer.

Third, the market’s publicly available comparable valuations are quite conservative. XTransfer—not a stablecoin company—filed for IPO on the Hong Kong Stock Exchange with a pre-IPO valuation of about $3 billion, backed by $24.8 million in revenue, $47.7 million in adjusted net profit, over 90% gross margin, 800k SME clients, and over $60 billion in annualized transaction volume. In other words, a profitable, audited, fully licensed cross-border FX company is currently valued at roughly 12 times revenue, supported by real operational data.

OpenFX’s valuation of $500 million, with a volume roughly similar, but no revenue, no profit, and no licensing system—what the market is paying for “stablecoin premium” is real money. But the underlying operational gap is also real money. Western capital is pricing the regulatory options under the GENIUS Act; Asian PSPs are pricing realized P&L. Essentially, these are almost different pools of capital bidding.

Footnote on Brazil

On April 30, 2026, the Central Bank of Brazil issued Resolution BCB No. 561. Starting October 1, 2026, all eFX (electronic foreign exchange) service providers are prohibited from using stablecoins or any virtual assets for cross-border settlement.

For scale reference: stablecoins previously carried about 90% of Brazil’s monthly $6–8 billion in crypto-related cross-border flows. This regulation does not ban individuals from holding stablecoins, but it draws a hard line around regulated FX channels, signaling to fintech companies: either remove the stablecoin component or move it into a fully compliant channel.

This is the future, not an exception. Several other major jurisdictions are tightening regulations around stablecoins and cross-border payments. Relying solely on a US MSB license and partner banks to sustain a global stablecoin payment infrastructure window is closing corridor by corridor.

Players in this sector can be roughly divided into three regulatory categories:

Where the boundaries tighten and to what extent over the next 24 months will influence the landscape—and the way it influences is not fully clear yet.

All current strategic investments in stablecoin issuers—Tether’s investment in Axiym, Circle and Ripple’s in Tazapay, and similar deals—share a common point: each investee emphasizes “compliance” and “multi-jurisdictional readiness” prominently in their product narratives.

But whether compliance posture ultimately becomes a true moat, or whether growth speed and product depth are more critical—this remains an open question. Different answers are being bid at very different prices.

Final thoughts

The infrastructure for cross-border payments is indeed being re-priced by stablecoins, and this is a track worth serious attention.

But currently, the valuation in the Western wave isn’t based on the operational business today; it’s an option—one that includes clarity on regulatory direction, execution speed, and which channels will stay open versus close.

This option could yield very attractive returns. Or, once markets gather more data on “who is building sustainable business,” it could be re-priced.

For investors looking beyond Circle for stablecoin exposure, a more important question than “who is running fastest today” might be: after 24 months, following the next wave of regulation, what will each player still hold in their hands?