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

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Author: Cao Legong, The Adventures of a Finance Dog

A while ago, 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 in the Last Sixty Days

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

Tether strategically invested 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 profitable, audited, licensed cross-border FX company.

The story is real, the volume is real, and regulatory tailwinds are evident: especially the US GENIUS Act, which indeed gives institutional investors a reason to “place bets.”

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

What kind of company 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 to within 60 minutes. Within twelve months, its annualized trading volume grew from $4 billion to $45 billion. CEO Prabhakar Reddy is a co-founder of FalconX, and the backing investors are 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—using SEPA in Europe, FPS in the UK, NPP in Australia—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:

“The time required to get licenses globally is three times what you expect. Even those banks that openly claim to be ‘stablecoin-friendly’ find it much more complicated to establish cooperation than what press releases suggest. Last-mile liquidity is built corridor by corridor.”

This description almost perfectly mirrors Airwallex’s journey from 2015 to 2020: first partnering with local banks, capturing FX spreads from multinational banks, then gradually obtaining licenses market by market. Airwallex spent ten years and burned through $1.57 billion to build the licensing moat behind its current $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, license later” script—one that has proven successful for some of the most established 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 only closed in November 2025. Afterwards, Ondo acquired Oasis Pro, bringing broker-dealer, ATS, and transfer agent licenses all at once. GSR, a 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, with $71 million after-tax profit, over 90% gross margin, 800k+ SME clients, and annualized transaction volume exceeding $248M. They finally brought a regulated bank into their shareholder lineup.

The pattern is quite consistent: in markets where the regulatory framework is still incomplete, players who first scale tend to define “compliance” later, 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 values the ability to “run through” these channels.

Western Investors vs. Asian Players

Stablecoins as a settlement layer for cross-border FX is indeed a genuine innovation. They reduce the most hidden and largest cost in cross-border payments—pre-deposits. A few hundred basis points of capital efficiency gains, multiplied by the trillions of dollars in global cross-border flows annually, could 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 already profitable, and most are actively integrating stablecoins.

Three points in this chart are especially noteworthy:

First, Asian players have significantly higher capital efficiency. Tazapay, with roughly half the funding of OpenFX, achieved similar growth curves 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 gradually burn money; Western stablecoin players tend to raise large-tier funding first, then acquire licenses later.

Second, the same stablecoin issuers and large financial institutions are backing players on both sides, but the valuations differ greatly. 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 the Axiym deal and the Tazapay deal isn’t different; the only difference is the size of the final buyer.

Third, the market’s valuation comparisons are quite conservative. XTransfer—emphasizing again, this is not a stablecoin company—filed for IPO with a pre-IPO valuation of about $3 billion, backed by $800k in revenue, $47.7 million in adjusted net profit, over 90% gross margin, 800,000+ SME clients, and annualized transaction volume over $60 billion. 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 is $500 million, with a volume roughly similar, but no revenue, no profit, and no licensing system backing it. The market is paying real money for “stablecoin premiums,” but the underlying operational gaps are also real. Western capital is pricing regulatory options under the GENIUS Act; Asian PSPs are pricing realized P&L. Essentially, these are almost different pools of capital bidding.

Brazil’s Footnote

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 payment settlements.

For scale reference: stablecoins previously carried about 90% of Brazil’s $6–8 billion monthly crypto-related cross-border flows. This regulation doesn’t ban individuals from holding stablecoins but draws a hard line around regulated FX channels, telling fintech companies: either remove stablecoins from your process or move them 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. The window for supporting a global stablecoin payment infrastructure with just a US MSB license and partner banks 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 will influence the sector’s landscape over the next 24 months—and the way this influence manifests isn’t fully clear yet.

All three current strategic investments in stablecoin issuers—Tether investing in Axiym, Circle and Ripple investing 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 is truly a moat or whether growth speed and product depth are more critical remains an open question. The market hasn’t reached a consensus yet. Different answers are being priced very differently.

Finally

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

But currently, the valuation in the West isn’t based on current operations but on an option—one that includes clarity on regulation, execution speed, and which channels will remain open or close.

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

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 have in hand?