The Value Distribution of Stablecoins

Author: @0xjiawei

Previous chapters discussed the broad direction: stablecoins are evolving from mere trading tools into a general-purpose dollar channel.

This chapter examines how the stablecoin "pie" is divided.

I categorize stablecoins into four layers:

1. Issuance Layer: Mints stablecoins, holds reserve assets, captures the interest rate spread. Representatives: Tether and Circle.
2. Infrastructure Layer: Connects stablecoins to the real-world financial system – fiat on/off-ramps, bank integrations, asset management, compliance. Representatives: Bridge (acquired by Stripe), BVNK (acquired by Mastercard), Bitso, Yellow Card, etc.
3. Acquiring/Distribution Layer: Embeds stablecoins into merchant systems, manages payment flows, enterprise financial software. Representatives: Stripe, Infini, Coinbase.
4. Application Layer: End users and businesses that ultimately use stablecoins for payments, settlement, or as a store of value.

The issuance layer captures user funds and earns the thickest interest spread; the middle two layers profit from traffic, distribution fees, and foundational infrastructure; the application layer enjoys convenience but lacks pricing power.

I believe the infrastructure layer is currently undervalued by the market.

It does the gritty, thankless work: integrating with banks, handling KYC/AML, managing local fiat on/off-ramps, connecting merchants and APIs, interfacing with card networks, and solving settlement and regulatory issues across different countries.

But conversely, this is precisely where its moat lies. Because the technology behind stablecoins is straightforward—transferring USDC on-chain isn't the hard part. The real challenge is penetrating the real world, convincing a Latin American company, an African payment provider, or a cross-border e-commerce platform to incorporate stablecoins into their daily cash flows. This gritty work is essential and must be done by someone.

The On-Chain Part is Easiest; The Bridge to Reality is Hardest

At first glance, stablecoin payments seem simple: on-chain transfers are fast, confirm quickly, have low fees. The rest is just distributing the product to users, right?

But the real difficulty with stablecoins lies in the vast gap between the blockchain and the traditional financial system. Businesses have decision-making and switching costs; they won't overhaul a perfectly functional workflow just because they heard stablecoins settle in one second.

This raises a cascade of questions: How do I convert fiat to stablecoins? And back again? How do I handle reconciliation and taxes? Will my bank block me later? Do users still need to learn how to use a wallet?

The core task of the infrastructure layer is bridging these two worlds: connecting to blockchains and wallets on one side, and to banks, local payment networks, enterprise systems, and compliance on the other.

Stripe's acquisition of Bridge in 2025 brought Bridge's "stablecoin orchestration" system—helping businesses integrate stablecoin capabilities into their operations. Mastercard's announcement in March 2026 to acquire BVNK followed a similar logic.

In other words, traditional payment companies are competing to become the default gateway for enterprises using stablecoins.

The key to scaling stablecoin payments lies precisely here.

The Road Builders

Looking closer at the infrastructure layer, its functions include:

1. On/Off-Ramps + FX: Most enterprise use cases involve a "local currency → stablecoin → local currency" flow. This touches on banking relationships, compliance, liquidity, and other issues.
>API + Account Layer: Businesses need a set of financial capabilities embedded into their workflows—account opening, sending/receiving payments, fund splitting, clearing, reconciliation. This resembles financial SaaS, similar to the concept of Neobanks.
2. Payment Network Connectivity: The more payment rails, banks, and regions connected, the greater the customer dependency and switching costs become over time.
3. Capital Efficiency: Helping businesses reduce idle funds, wait times, and FX losses.

I believe this layer has three defining characteristics that ensure its path is arduous before it becomes rewarding.

• It's gritty, thankless work. Requires integrating with banks, achieving compliance, obtaining licenses, and building local teams, country by country.
• It requires upfront investment to capture the gateway. Enterprises won't easily switch their payment infrastructure. Whoever first secures large clients, banking relationships, compliant pathways, and local fiat rails will later benefit from network effects. Companies at this stage are more in a "land grab" phase, far from reaping the harvest.
• It's squeezed between upstream and downstream players. Upstream issuers capture the interest spread first, while downstream platforms want to control the user gateway. Infrastructure sits in the middle, in an awkward position, easily becoming "everyone needs you, but no one wants you to earn too much."

Right now, it's in an intermediate stage moving towards "forming pricing power."

If we look only at today, the issuance layer takes the largest profits, while the infrastructure layer is thinner and more burdensome.

But if we're talking about how to invest in the stablecoin space, the seigniorage logic of the issuance layer is already well-understood by the market, and its valuation will increasingly revolve around interest rates, regulation, and profit-sharing. The infrastructure layer is less conspicuous today, largely because it's still in the heavy-investment phase; pricing power and solidified user habits haven't fully formed yet.

Once stablecoins further become the default rails for enterprise finance, the true beneficiaries will be those who spent years building the bridges between stablecoins and the real-world commercial system.