Tiger Research report: After issuing stablecoins, how exactly do you make money?

Author: Tiger Research

Translated by: Deep Tide TechFlow

Deep Tide Quick Read: Everyone is watching the issuance earnings of Tether and Circle, but the real opportunity is after issuance. This report dissects the complete value chain of stablecoins—from on-ramping, transfers, and payments to yield generation—revealing that the strategies of mainstream players are not about “rebuilding the financial system,” but about grafting stablecoin efficiency advantages onto existing traditional financial infrastructure. Only in the yield-generation layer can traditional finance not get in, and it requires separate, specialized capabilities.

Core Takeaways

Beyond the issuance market dominated by the Tether and Circle oligopoly, this report analyzes the actual commercial structures produced across five stages of the stablecoin value chain (on-ramping, remittances, payments, and yield generation).

The mainstream strategy is not “rebuilding the system,” but overlaying stablecoin efficiency advantages (instant settlement, low-cost remittances) onto existing traditional financial infrastructure—similar to how Stripe acquired Bridge. But yield generation is the area where traditional finance struggles to enter and therefore needs dedicated professional capability.

As rate cuts weaken the attractiveness of issuance earnings and competition intensifies, market value is shifting toward the “underlying settlement layer.” Stablecoins are not meant to replace traditional finance; instead, they present a vertically integrated pattern with regulated financial systems.

It’s time to look at the full stablecoin value chain

So far, discussions about the stablecoin industry have focused on the issuance stage. The performance of major issuers such as Tether and Circle, as well as regulatory responses in different countries, are treated as key market indicators—but that is only the starting point of the stablecoin value chain.

The stablecoin industry’s complete value chain includes the economic “flow” of circulation after tokens are issued. It is defined as a five-stage value chain: issuance, on-ramp, transfer, payment, and yield generation.

Analyzing this industry from the perspective of the value chain makes it clear that while the issuance market is held by a small number of players in an oligopolistic structure, the downstream layers involve more competitors—creating market opportunities.

From issuance to yield: tracking $1,000

Consider how the $1,000 in Ryan’s bank account circulates within the stablecoin ecosystem. To understand this, you need to sequentially examine the five-stage value chain from issuance through yield generation.

• Issuance: Major issuers mint stablecoins using collateral such as U.S. Treasuries, providing ample liquidity to the market.

• On-ramp: When Ryan requests to convert his $1,000 into stablecoins via an on-ramp service, the on-ramp provider processes the request and sends the tokens to his wallet. At this point, assets leave the fiat system and are converted into on-chain liquidity.

• Transfer: Ryan sends $500 to his family in Mexico for living expenses. The remittance infrastructure processes it instantly, and the recipient converts the funds into local currency for use.

• Payment: Ryan then uses the remaining $200 to pay at a grocery store. Here, the payment infrastructure settles instantly.

• Yield: The final $300 remaining in the wallet is not left idle. Instead, it’s deposited into a yield protocol’s treasury, where it’s managed as a financial asset that generates returns.

Through this process, Ryan’s $1,000 is converted from fiat to stablecoins and evolves into cross-border payment rails and an asset management tool. Each layer that Ryan’s funds flow through precisely corresponds to a stage in the stablecoin industry’s value chain.

Issuance

The issuance market is a scale-economies market, with entry barriers built on trust and liquidity. The first movers—Tether and Circle—entrench the oligopoly, and later entrants need differentiation strategies beyond simply the reserve-interest model.

Industry Structure

Stablecoin issuance is the process of minting and burning tokens against reserves (mainly U.S. Treasuries) to fix their value. The total market is about $300 billion, with dollar-pegged assets accounting for 99.99%. Tether and Circle together hold about 83% of market share; scale-economy dynamics are already deeply entrenched, and deeper liquidity both increases trading convenience and strengthens trust.

As the industry matures, functions once monopolized by a single issuer are undergoing specialization and separation. Superficially, the issuer appears to be a single entity, but internally, four functions—licensing (regulatory credentials), reserve management and custody, token minting and burning, and distribution—are split among different parties. Through this process, issuers are effectively distributing most real operational responsibilities.

For example, Circle delegates a substantial share of distribution to Coinbase, while Tether delegates most of its reserves to custodian Cantor Fitzgerald.

Business Model Types

• Reserve interest: Revenue comes mainly from returns on reserve management, which benefits leading issuers with large liquidity pools (Tether, Circle).

• Payment fees: Revenue comes from fees generated when tokens are used for payments and settlement. Profitability is determined by transaction speed rather than market value (StraitsX).

• Issuance-as-a-service: Doesn’t directly issue tokens, but leases infrastructure and licenses and captures the spread. Growth comes from network effects rather than scale (M0, Paxos, Bridge).

• Regionality: Providers obtain exclusive liquidity by entering jurisdictions where regulation is unclear first, or non-USD currency markets (KRWQ, JPYC).

Case Study: Circle

When institutional clients deposit dollars into Circle Mint (Circle’s on-ramp and off-ramp platform), Circle mints USDC on a 1:1 basis. Because Circle’s primary revenue comes from interest earned on these deposits, it doesn’t charge a separate minting fee at issuance; its operational core is maximizing the scale of this interest-bearing float. The deposited dollars are held in the Circle Reserve Fund (an SEC-registered money market fund managed by BlackRock), along with cash and cash equivalents, primarily invested in short-term U.S. Treasuries.

Circle allocates this interest revenue through agreements with distribution channels. Under a cooperation agreement signed in August 2023, Circle and Coinbase distribute the interest produced by USDC reserves as follows:

• USDC held on the Coinbase platform: Coinbase receives 100% of the interest income corresponding to the reserves.

• USDC held on Circle’s own platform: Circle retains 100% of the interest income corresponding to the reserves.

• USDC held outside the two platforms (remaining interest income): interest generated from reserves supporting USDC circulation outside the two platforms (including third-party exchanges, individual and institutional wallets, and DeFi) is allocated 50:50 between Circle and Coinbase.

This reflects a deliberate strategy. By carefully building incentives within and outside the platform with core distribution partners, Circle shares a portion of issuance revenue in exchange for maximizing USDC’s distribution base and ecosystem share.

Key Takeaways

Stablecoin issuance is a scale-economies market, where early-mover advantage and the scale of available liquidity are decisive—making entry barriers for latecomers pursuing direct issuance models extremely high. Therefore, new entrants should focus on functional decomposition of the value chain rather than getting stuck on issuance itself.

A more effective strategy is to establish unmatched specialized capabilities at specific layers of the value chain—such as licensing, asset custody, settlement infrastructure, or distribution channels—and build a middleware position that other players can’t replace. In other words, the essence of future competition is not who issues the largest amount of stablecoins, but which players capture value across the complete process of stablecoin liquidity and consumption—and gain strategic positioning there.

On-ramp

On-ramp revenue comes from fees tied to transaction volume and spreads. The actual fees consumers experience vary greatly by payment method: bank transfers are 2%–4%, cards are 4%–7%, but based on Banxa data, the provider’s actual net fee rate is about 3%. The conversion function itself is hard to differentiate, and competition is intense enough that aggregators route transactions to the lowest-cost options.

Industry Structure

This layer consists of on-ramp services (exchanging fiat into tokens) and wallet and custody providers (holding the generated assets). They are tightly connected: one handles conversion into stablecoins, and the other handles storage.

On-ramp revenue comes from fees and spreads linked to transaction volume, and profit margins differ significantly across payment methods. However, the conversion function itself is difficult to differentiate, so multiple providers compete with broadly similar products, and net fee rates are converging toward about 3%.

Business Model Types

• Consumer on-ramp: Provides currency conversion directly to end users and charges transaction fees and spreads. Because differentiation is hard, competitiveness depends on the breadth of licensing coverage, the reach of payment networks, and reputation—reflected in conversion rates (MoonPay, Ramp Network, Banxa).

• B2B white label: Embeds on-ramp rails into wallets and applications and shares about 1% of each transaction fee with partners. It gains distribution without a consumer-facing brand, and the deeper the integration with large partners, the stronger the conversion-cost “moat” effect (Transak).

• Aggregators: Route transactions among multiple on-ramp channels to find the optimal path and earn an intermediary fee. As the number of on-ramp channels increases, value grows, although reliance on partner networks limits this (MELD).

Case Study: MoonPay

MoonPay is a non-custodial on-ramp platform where users buy tokens with fiat and send them directly to their own wallets. Its main revenue comes from per-transaction fees and trading spreads: bank transfers at 1%, credit cards at 4.5%, and a minimum of $3.99 for small transactions. The published fee structure is divided into three tiers, reflecting how MoonPay allocates revenue and builds its distribution system.

MoonPay’s revenue structure has two channels: direct traffic and transactions embedded through partners. Its model of embedding solutions into over 500 wallets and apps is especially critical—partners can set their own rates. This is the core driver behind MoonPay’s ability to efficiently obtain large-scale distribution and share revenue with partners.

Key Takeaways

Fee income from simple on-ramp services faces severe margin pressure because the service is being commoditized and price competition is intensifying. Therefore, building a sustainable business requires transforming one-time fee structures into stable recurring revenue.

Consumer on-ramp providers are expanding downstream in the value chain, such as into issuance and settlement infrastructure. MoonPay’s acquisition of Iron and entry into branded issuance services is an example of this shift, but the financial outcomes of such a recurring revenue strategy have not yet been validated.

The “embedded” strategy leads service providers to integrate services into larger platforms, producing two distinctly different outcomes. Some providers build independent competitive advantages and maintain separate moats (Transak, Turnkey), while others are acquired by larger payments and custody companies—for example, Stripe acquiring Privy and Fireblocks acquiring Dynamic.

It’s still too early to tell which outcome will become the dominant model, but the on-ramp and wallet layers clearly play critical roles in the industry.

Transfers

The transfer layer is responsible for the liquidity of stablecoins. This includes personal and enterprise transfers, as well as paying salaries to employees globally.

This niche is attracting attention because it demonstrates stablecoin cost advantages in the most concrete and measurable way. The average cost of traditional cross-border transfers is over 6%, while using stablecoins can significantly reduce this cost.

Industry Structure

Fees and FX spreads appear at two ends of the process—when dollars convert into tokens and when tokens convert back into local currency—but the on-chain movement of the tokens themselves is effectively free.

In other words, revenue isn’t concentrated in the transfer itself; it’s concentrated at the conversion endpoints and the licenses required to handle transfers legally. Because obtaining money transfer licenses (MTLs) in U.S. states takes 12 to 24 months, leasing the license itself as infrastructure—“compliance as infrastructure”—has become a powerful revenue model.

Business Model Types

• Cross-border B2B infrastructure: Coordinates cross-border payments and settlement between enterprises, typically earning transfer fees (about 5–10 basis points) plus FX spreads (from dozens of basis points up to about 1% depending on the route and transaction volume). Some companies go further by issuing their own stablecoins to capture reserve interest income—for example Bridge’s Open Issuance (Bridge, BVNK, Conduit).

• Payroll payments: Focuses on salary payments, with end relationships with both employees and employers. Besides SaaS subscription fees (a fixed monthly rate per contractor plus an approximately 25 basis point withdrawal fee), this model stacks a second layer of revenue by investing the float of the funds waiting to be paid and earning interest, such as Rise Earn (Rise, Toku).

• Consumer remittances: Focuses on cross-border transfers for individuals, using stablecoins to reduce backend costs, and expanding profit margins by maintaining a cheaper fixed fee than traditional providers (Félix Pago).

Case Study: Rise

Rise is a stablecoin payroll platform. Companies pay salaries in fiat (USD) or USDC through it. Employees can choose their payment method from over 90 local currencies and stablecoins each pay cycle. In the cumulative processed volume of $1.5 billion, more than half of recent withdrawals are stablecoins. But what Rise truly charges for is not token transfers; it’s employee-employment relationship management. The platform automates KYC and AML reviews, generates country-specific contracts, and issues tax documents, charging recurring fees for this service.

Rise structures its revenue into three layers along the payroll fund flow.

• Subscriptions and transaction fees: Employers can choose either a fixed monthly subscription fee of $50 per contractor or 3% of the payment amount, plus a $2.50 transfer fee for each transaction. Because payroll itself is recurring, this revenue is recurring rather than one-time.

• Taking legal responsibility (EOR/AOR): A premium service where Rise becomes the legal contracting party and absorbs the risk of employee misclassification. The nominal employer (EOR) service costs $399 per employee per month. Compared with simple payment processing, the 8x price difference comes from compliance responsibility, not transfer functionality.

• Float management (Rise Earn): Rise invests the company’s pre-allocated funds waiting to be paid and the USDC balances employees receive but haven’t withdrawn yet into Aave lending pools on Arbitrum. It doesn’t charge deposit or custody fees; instead, it charges a 1% commission on generated interest when users withdraw (launched March 2026).

Because payroll cash flow is inevitably monthly, funds naturally accumulate on the platform—both before payouts and after employees receive funds but don’t withdraw them. Rise’s three-layer structure monetizes precisely this characteristic. In an environment where on-chain transfers are effectively free, this can be interpreted as a deliberate strategy: expand monetization points sequentially from employment relationships (subscriptions) to legal responsibility (EOR) to idle capital (yield), instead of charging for transfers themselves.

Key Takeaways

The winners in the transfers market won’t just be the cheapest token-transfer service provider. Instead, it will be a comprehensive player that captures conversions and licenses at both ends (Mural Pay, Yellow Card) to control customer touchpoints, has substantive customer relationships via payroll payments (Rise), and layers on yield income (Rise Earn) on top.

Cross-border infrastructure provider BVNK was ultimately acquired by Mastercard for up to $1.8 billion, showing that settlement infrastructure under the transfer and payment layers will converge into a single unified system.

Payments

Payments are the core layer of the value chain—stablecoins settle goods and services payments here. Merchant payments and card services are leading this sub-sector, but the economic reality is still less mature than market expectations. The retail circulation velocity of on-chain stablecoins is only about one-twentieth of the monetary supply metric M1, because users top up intermittently and spend, rather than following a regular financial cycle where salary income and daily expenditures are connected.

Industry Structure

Interchange fees—charged by card networks and issuing banks per transaction—are the core source of payment revenue and expand with payment volume. However, low turnover reduces profitability per card. Existing revenue is split among card networks, issuing banks, and payment gateways (PGs). Therefore, the real profit pool isn’t in consumer-facing card brands, but in the issuing and settlement infrastructure behind them.

Most consumer card service providers lack their own issuing permissions and rely on this infrastructure, giving their revenue structure limited scope and mostly built around exchange-spread advantages.

Business Model Types

• Payment infrastructure: Coordinates merchant payments and settlement. In addition to payment processing fees, providers also capture reserve interest income by issuing their own stablecoins. Stripe’s Bridge Open Issuance distributes the reserve income structure that Circle receives to enterprises—one of the most profitable businesses in this layer (Stripe, BVNK).

• Issuing infrastructure: Supports the backend for enterprises issuing cards. Service providers earn revenue through their major membership roles in key networks like Visa and through project management and FX spreads. The key differentiation is T+0 on-chain settlement based on USDC, which can reduce collateral requirements by up to 60% compared with existing methods, greatly improving capital efficiency (Rain, Reap).

• Consumer cards and neobanks: Provide cards and accounts to end users. Revenue combines interchange fee shares and FX spreads with membership subscription fees or profits from managing deposited funds. Because these providers aren’t issuing banks themselves, they have limited ways to access reserve interest income and most rely on issuing infrastructure like Rain or Reap (Cypher, KAST).

• Card networks: Networks for payment authorization and settlement. Interchange fees belong to issuing banks, while card networks benefit from transaction volume through network fees per transaction. Card networks are integrating stablecoin settlement as the backend layer, strengthening lock-in with partner banks (Visa, Mastercard).

Case Study: Rain

Rain is a B2B backend infrastructure that helps wallets, exchanges, and neobanks issue their own branded consumer cards. Partners integrate the card program via a single API, and Rain—being a major Visa and Mastercard member—represents them to handle network sponsorship, compliance, and card issuance and operations.

When users swipe Rain-based cards at merchants, the process works like this:

• Authorization (real-time): Payments are authorized on the Visa or Mastercard network just like any standard card. The merchant and consumer experience is exactly the same as with traditional cards; stablecoins are invisible on the surface.

• Balance deduction and ledger management: Users’ on-chain balances are converted and deducted against authorized amounts in real time; Rain manages the entire ledger process.

• Network settlement (daily): Rain settles entirely using USDC with the card network. Since settlement isn’t constrained by bank cutoff times, settlements occur every day of the year, including weekends and holidays—so payments don’t get delayed by days on weekends and holidays.

• Collections and working capital: In a credit structure, user repayment happens later than settlement time, so issuing parties must fill the gap. Rain tokenizes its card receivables and uses them as collateral for on-chain loans, raising settlement funds before collecting from users; cumulative borrowing and repayment exceed $175 million. Therefore, its collateral requirement is 60% lower than traditional issuers.

In short, when consumers use Rain-based cards, Rain handles all the behind-the-scenes work from authorization to settlement and funding.

Key Impacts

The core of payment revenue isn’t visible card payment fees, but reserve interest driven by the issuer identity and the funding efficiency achieved via T+0 settlement. Most consumer card brands are merely front-end customer touchpoints layered on top of this infrastructure.

Major card networks have started directly acquiring cross-border payment infrastructure such as BVNK. Meanwhile, Visa, Mastercard, Stripe, and Google are pushing a joint stablecoin alliance called Open USD. This can be read as a vertical integration strategy—bringing the platform in-house to protect their exclusive reserve interest revenue.

Yield generation

Yield is the endpoint of the value chain and also the layer where the most complex commercial structures form. Interest that issuers can’t pass back to cardholders ultimately returns to users here—this lending business is evolving into a full asset management industry.

Industry Structure

Early on-chain lending pooled all assets into one big pool, so default on any asset could spread risk across the entire system. This structural limitation was later addressed by introducing isolation or modular models that separate collateral and loan terms by market, clearly dividing core infrastructure (immutable lending protocols) from the yield management layer (operated by a risk curator).

This structural separation has created a real on-chain asset management industry. Risk curators act like traditional asset managers, earning performance fees (up to 50%) and management fees (up to 5% annualized) from the vaults they operate. The top four participants collectively control about 65% of the total curated value locked (TVL), giving this niche a concentrated oligopoly structure.

On top of this yield infrastructure is the financial product layer that end users actually consume, including tokenized real-world assets (RWA) that convert U.S. Treasuries and private credit into tokens, interest-bearing synthetic dollars, and re-staking.

Business Model Types

• Lending infrastructure: Extract part of the deposit-loan spread as a reserve factor, or capture protocol revenue from the interest generated by issuing your own stablecoin (such as Aave’s GHO). Different models represented by Morpho close their own protocol fees and redistribute this value to downstream curators and the token ecosystem to grow the network (Aave, Morpho).

• Risk curators: Design asset allocation and risk models on top of lending protocols and charge vault management fees. For example, Steakhouse manages about $1.7 billion of assets with a team of fewer than 20 people and takes about 5% of interest income. It represents this operating model for on-chain asset managers; its cost structure is far more efficient than traditional financial institutions (Steakhouse, Gauntlet).

• RWA yield vaults: Issue and distribute tokenized U.S. Treasuries or money market fund (MMF) products, charging around 0.15% to 0.5% in annualized management fees. BlackRock’s BUIDL is the underlying asset; Ondo Finance repackages it for the decentralized finance (DeFi) ecosystem; Plume Nest distributes it through a Layer 1 blockchain specifically built for RWA (BUIDL, Ondo, Nest).

• Yield and synthetic dollars: Generate returns via Delta-neutral basis trades or managing net interest margin (NIM), then pay the returns as interest to token holders. This category splits into two types: models that rely on crypto-native derivatives yield, and models that rely on stable government bond collateral (Ethena, Sky).

• Re-staking: Liquidize already staked assets again to gain additional yield. Some providers push further with vertical integration across the entire value chain—from charging DeFi vault management fees to directly linking card payments (Ether.fi).

Case Study: Steakhouse

Steakhouse Financial is a risk curator—an on-chain asset manager. It doesn’t build its own lending protocol; instead, it operates on top of existing infrastructure such as Morpho, taking the role of sub-advisor: selecting collateral assets, designing risk parameters like loan-to-value ratios, and allocating capital across markets.

Its income structure is also similar to traditional asset management: it takes a portion of the generated interest as performance fees and management fees. Because lending protocols like Morpho handle operational infrastructure, accounting, settlement, and custody, curators can efficiently scale their business using only their risk-design expertise without bearing separate infrastructure costs.

Key Impacts

The on-chain curators currently manage about $7 billion in assets—roughly one-two-thousandth of the global traditional asset management market (about $147 trillion). This huge gap represents a long runway for the expansion of the on-chain asset management market.

However, high yields are only meaningful if the underlying system remains stable. Recent depeg events and a series of shocks in the re-staking sector have exposed operational risks and tail risks (extreme cases beyond normal expectations), which simple smart-contract audits alone can’t detect.

As a result, market capital is shifting from high-yield synthetic dollars toward products backed by Treasuries with relatively lower yield. Institutional investors fundamentally want predictability—the ability to control risk—rather than high annualized percentage yields (APY).

Future direction of the stablecoin value chain

The success of the stablecoin market doesn’t depend on simply expanding issuance scale. It depends on which participant controls specific customer segments. However, building infrastructure from scratch in a crypto-native way progresses slowly and carries heavy cost burdens.

The most realistic and actionable strategy is to overlay stablecoin efficiency (same-day settlement, all-weather operations, low-cost transfers, programmable yield) onto established traditional financial infrastructure rails. Recent major M&A, including Stripe’s acquisition of Bridge and the collaboration between Mastercard and BVNK, point to this kind of combination between traditional financial infrastructure and stablecoin efficiency.

This opportunity is being amplified by two broad trends acting together: the diffusion of regional currencies and the integration with regulated finance.

• Diffusion of regional currencies: Governments and institutions issuing stablecoins denominated in local currencies are more likely to adopt already-validated issuance infrastructure and local bank channels, rather than building systems from scratch.

• Integration with regulated finance: Regulated financial institutions such as JPMorgan, Visa, and BlackRock have also clearly shown a preference for proven infrastructure rather than developing their own technology.

With these trends, the market opportunity is expected to keep expanding across the various layers that regulated finance must pass through to enter this market—beginning with card issuing and settlement, settlement infrastructure, custody infrastructure, and the yield layer.

The conclusion is that issuers need to move beyond intense competition focused on stablecoin issuance, because stablecoins are not a standalone product—they are a technology upgrade that improves the efficiency of existing financial rails. The real winners will be the participants that obtain the infrastructure layers built on top of existing traditional rails.

In this structural shift, the industry’s focus is moving “downward” and “inward.” As falling interest rates weaken the economic efficiency of issuance itself, the value of the underlying settlement layer grows with increased usage—so the focus moves downward toward the settlement layer. Meanwhile, stablecoins haven’t replaced existing systems; instead, they are being rapidly absorbed into regulated financial systems. Local-currency stablecoins are organically integrating by filling the gaps left by dollar networks.

The transfer of industry focus has become an irreversible core issue. EastPoint: Seoul 2026, to be held on September 28, will provide a platform for in-depth discussion of this industry transformation. At that time, traditional financial institutions and the digital asset industry will gather together to explore stablecoin ecosystems and other related topics. The event is seen as an important step toward breaking existing barriers and achieving true integration.