Stablecoin Payment: Reshaping the Global Financial Transaction Landscape

The global financial system is undergoing profound changes. Traditional payment networks are facing comprehensive challenges from emerging alternatives - stablecoins, due to outdated infrastructure, lengthy settlement periods, and high costs. These digital assets are rapidly innovating the modes of cross-border value flows, the paradigms of corporate transactions, and the ways individuals access financial services.

In recent years, stablecoins have continued to develop and have become an important underlying infrastructure for global payments. Large fintech companies, payment processors, and sovereign entities are gradually integrating stablecoins into consumer-facing applications and corporate funding flows. At the same time, a series of emerging financial tools, ranging from payment gateways to deposit and withdrawal channels, to 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 studies the key players shaping this field, the core infrastructure supporting stablecoin transactions, and the dynamic demands driving its applications. Additionally, it explores how stablecoins give rise to new financial application scenarios and the challenges they face in being widely integrated into the global economic process.

1. Why choose stablecoin payment?

To explore the influence of stablecoins, it is essential to first examine traditional payment solutions. These traditional systems include cash, checks, debit cards, credit cards, international wire transfers (SWIFT), automated clearing houses (ACH), and peer-to-peer payments. Although they have become integrated into daily life, many payment channels, such as ACH and SWIFT, have been in place 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 While they were groundbreaking at the time, most of these global payment infrastructures are now outdated and highly fragmented.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, inability to achieve round-the-clock settlement, and complex backend processes. Additionally, they often bundle unnecessary extra services such as identity verification, lending, compliance, fraud protection, and bank integration, which come at a cost.

Stablecoin payments are effectively addressing these pain points. Compared to traditional payment methods, using blockchain for payment settlement greatly simplifies the payment process, reduces intermediaries, and achieves real-time visibility of fund flows, which 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 expenses for users.
• Global Coverage: Decentralized platforms can reach markets underserved by traditional financial services (including unbanked populations), achieving financial inclusion.

2. The Landscape of the Stablecoin Payment Industry

The stablecoin payment industry can be divided into four technical stack layers:

1. Layer One: Application Layer

The application layer is mainly composed of various payment service providers (PSPs) that integrate multiple independent deposit and withdrawal payment institutions into a unified aggregation platform. These platforms provide users with convenient access to stablecoins, offer tools for developers working at the application layer, and provide credit card services for Web3 users.

a. Payment Gateway

A payment gateway is a service that facilitates transactions between buyers and sellers by securely processing payments.

Notable companies innovating in this field include:

• A multinational payment company: integrating stablecoins such as USDC for global payments.
• A well-known Web3 wallet: it does not provide direct fiat currency exchange functions itself, users can carry out deposit and withdrawal operations through integration with its third-party services.
• An innovative payment platform: 450,000 active wallets and 6,000 merchants. With the Solana Pay plugin, millions of e-commerce platform merchants can settle payments in cryptocurrency and instantly convert USDY to other stablecoins, such as USDC, EURC, and PYUSD.
• Some Web2 payment applications also allow users to make payments using stablecoins, further expanding the application scenarios of stablecoins.

The field of payment gateway providers can be clearly divided into two categories (with some overlap).

1. Payment gateways for developers; 2) Payment gateways for consumers. 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-focused payment gateway is designed to serve businesses, fintech companies, and enterprises that need to embed stablecoin infrastructure into their workflows. They typically provide application programming interfaces (APIs), software development kits (SDKs), and developer tools for integration into existing payment systems, enabling features such as automated payments, stablecoin wallets, virtual accounts, and real-time settlement. Some emerging projects focusing on providing such developer tools include:

• A corporate payment platform: Provides enterprise-level payment infrastructure for easy integration of stablecoins. The platform offers API solutions for seamless processes, has a payment platform for cross-border commercial payments, and provides corporate accounts that allow businesses to hold and trade multiple stablecoins and fiat currencies, as well as merchant services that provide the tools needed for businesses to accept customer payments in stablecoins. Processing over $10 billion annualized transaction volume, with a year-on-year growth rate of 200%, and a valuation of $750 million, clients include emerging regions such as Africa, Latin America, and Southeast Asia.
• A certain payment API provider: Provides APIs to seamlessly integrate stablecoin transactions into its existing business. It offers businesses global deposit and withdrawal channels, stablecoin payment infrastructure, wallets, and virtual accounts, supporting customized payment workflows (including recurring payments, invoicing, or on-demand payments).
• A new emerging payment solution: offers a range of corporate payment, payroll, and bulk payment APIs, supporting currencies including Nigerian Naira (NGN), Canadian Dollar (CAD), US Dollar (USD), Tether (USDT), and USD Coin (USDC). Primarily targeting the African market, there is currently no operational data.

Consumer-focused payment gateways are user-centric, providing simple and easy-to-use interfaces that facilitate stablecoin payments, remittances, and financial services. They typically 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:

• A bank platform on a certain blockchain: enabling personal consumption, remittances, and stablecoin transactions in over 184 countries; this platform collaborates with local channels including a well-known remittance company in Latin America, achieving almost zero withdrawal fees, with over 10,000 South American users, highly rated among certain blockchain developers.
• A certain deposit and withdrawal solution: integrated directly with merchants, allowing users and businesses to easily convert between fiat currency and stablecoin, with minimal friction. The platform also supports purchasing USDC via a certain mobile payment, simplifying the process for consumers to acquire stablecoins.
• A certain P2P payment application: its stablecoin wallet functionality 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.

b. 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 (like a well-known credit card company) and enable seamless transactions by automatically converting cryptocurrency assets to fiat currency at the point of sale.

The project includes:

• A certain Asian card issuer: Clients include multiple enterprises, selling white-label solutions, mainly relying on transaction volume commissions (e.g., a certain client 85% - the company 15%). Collaborating with Hong Kong banks, it can cover most areas outside of the United States and supports multi-chain deposits; by July 2024, the transaction volume reached $30M.
• Some American card issuers: support multiple companies issuing cards, with the biggest feature being the ability to serve users in the US and Latin America. A USDC corporate card was issued to pay for travel expenses, office supplies, and other daily business expenses using on-chain assets (such as USDC).
• A European issuer + web3 bank: The business model is similar to the above two, supporting multiple companies in issuing cards; Swiss license, mainly serving European + Asian users, currently does not support full-chain transactions, only certain L2 top-ups. Growth is slow, with a total of 20,000 users and a monthly revenue of $100K-150K.
• A rapidly growing U card: Currently, over 10,000 cards have been issued, with 5-6k monthly active users. In December 2024, the transaction volume is expected to reach $7m, with revenue of $200k.
• A certain stablecoin ecosystem: Recently launched a credit card that supports stablecoins and provides a software development kit for facilitating L1 and L2 integration, currently in the testing phase with no data available.

There are many cryptocurrency card providers, and they mainly differ in terms of the regions they serve and the currencies they support. They typically offer low-fee services to end users to enhance the enthusiasm for using cryptocurrency cards.

2. Layer 2: Payment Processor

As a key layer of the stablecoin technology stack, payment processors are the backbone of payment channels, mainly covering two categories: 1. Deposit and withdrawal service providers 2. Stablecoin issuance service providers. They act as a critical intermediary layer in the payment lifecycle, connecting Web3 payments with traditional financial systems.

a. Deposit and Withdrawal Processor

• A leading deposit and withdrawal service provider: supports over 80 types of cryptocurrencies, offers various deposit and withdrawal methods as well as token swap services to meet users' diverse cryptocurrency trading needs.
• A widely covered deposit and withdrawal network: covering over 150 countries, providing deposit and withdrawal services for more than 90 types of crypto assets. This network handles all KYC (Know Your Customer), AML (Anti-Money Laundering), and compliance requirements, ensuring the compliance and security of the deposit and withdrawal services.
• A hybrid payment gateway: A hybrid payment gateway solution that supports bidirectional exchange and payment between fiat currency and crypto assets, achieving the integration of traditional fiat currency and crypto asset payments.

b. Stablecoin Issuance & Coordination Processor

• A stablecoin infrastructure provider: The core products include a coordination API and an issuance API, with the former assisting businesses in integrating various stablecoin payments and exchanges, while the latter supports companies in quickly issuing stablecoins. The platform is currently licensed in the United States and Europe and has established significant partnerships with the U.S. Department of State and the Treasury, possessing strong compliance operational capabilities and resource advantages.
• A regulated stablecoin issuance platform: Similar to the products of the aforementioned platform, it is a regulated stablecoin issuance platform that provides stablecoin coordination and reserve management APIs. It has compliance licenses in various states across the U.S., and partner companies are required to undergo KYB (Know Your Business), while users need to create accounts on the platform for KYC (Know Your Customer). The platform's clientele consists mostly of on-chain OGs (such as certain blockchain projects), and compared to the aforementioned platform, the endorsements from investors and business development are slightly weaker.
• An innovative stablecoin issuance platform: This platform's digital asset exchange reduces the threshold for issuing niche stablecoins by encouraging users to provide concentrated liquidity in a single pool. The platform adopts a "central hub-radiating" model, with USD* serving 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 connected to USD* as similar "spokes." Through this system structure, the platform ensures deep liquidity and enhances capital efficiency, as small stablecoins can interoperate through USD* without the need to provide separate liquidity pools for each trading pair. The system ultimately