Understanding the Stablecoin Industry Chain in One Article: The Real Profits Are Not in the Issuance
Understanding the Stablecoin Industry Value Chain: The Real Profits Are Not in Issuance
The article argues that while industry discussion focuses on stablecoin issuers like Tether and Circle, the real profit opportunities lie further down the value chain. It breaks the stablecoin ecosystem into five key segments: issuance, on/off-ramps, on-chain transfers, payments, and yield generation/asset growth.
Issuance is dominated by a few giants with massive scale and trust advantages, making direct competition difficult. New entrants are advised to focus on specialized infrastructure roles within this segment instead.
The on/off-ramp sector faces intense competition and margin pressure on basic transaction fees, pushing service providers to expand into adjacent services for recurring revenue.
The on-chain transfer segment, particularly for cross-border payments and payroll, offers significant cost advantages over traditional systems. Profits are not in the transfer itself but in the surrounding compliance, FX services, and leveraging idle funds.
In payments, the core profitability lies not in consumer-facing card brands but in the backend infrastructure for issuing, clearing, and settlement. This allows players to capture reserve interest and improve capital efficiency through real-time, on-chain clearing.
Finally, the asset growth/yield segment has evolved into a full-fledged on-chain asset management industry. It features layered models with specialized risk managers and offers products ranging from tokenized treasuries (RWA) to yield-bearing synthetic dollars.
The future direction points towards integrating stablecoin advantages (24/7 clearing, low-cost transfers, programmable yield) into existing traditional financial infrastructure, as seen in recent acquisitions. Value is shifting downstream to the clearing/payments layer and towards compliant integration with traditional finance, including the rise of regional non-USD stablecoins.
Foresight News07/17 03:37
