The Value Distribution of Stablecoins

Author:@0xjiawei

Previous chapters discussed the broad trend: stablecoins are evolving from mere trading instruments into a generalized channel for US dollars.

This chapter examines how the stablecoin pie is divided.

I categorize stablecoins into four layers:

1. Issuance Layer: Mints stablecoins, holds reserve assets, earns the 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 use stablecoins for payments, settlement, and storage of value.

The Issuance Layer receives user funds and captures the thickest spread; the middle two layers profit from volume, distribution fees, and underlying infrastructure; the Application Layer enjoys convenience but has little bargaining power.

I believe the Infrastructure Layer is currently underappreciated.

It handles the "dirty work": integrating with banks, handling KYC/AML, processing local fiat on/off ramps, connecting merchants, APIs, card networks, and solving settlement and regulatory issues across different countries.

Conversely, this is also where its moat lies. Because technically, transferring USDC on-chain is not the hard part. The real difficulty is penetrating the real world—getting a Latin American company, an African payment provider, or an overseas platform to incorporate stablecoins into their daily cash flows. Someone has to do this dirty work.

The On-Chain Part is Easiest, the Bridge to Reality is Hardest

At first glance, stablecoin payments seem straightforward: fast on-chain transfers, low fees—isn't it just about distributing the product to users?

But the real challenge for stablecoins is the vast gap between the chain and the real-world financial system. Businesses have decision and migration costs; they won't switch their entire workflow just because they heard stablecoins settle in 1 second.

A series of questions arise: How to convert fiat to stablecoins? How to convert back? How to handle reconciliation and taxation? Will the bank block us later? Do users still need to learn how to use a wallet?

The core work of the Infrastructure Layer is bridging the two sides: connecting to the chain and wallets on one end, and to banks, local payment networks, enterprise systems, and compliance on the other.

Stripe's acquisition of Bridge in 2025 bought its stablecoin orchestration system—helping businesses integrate stablecoin capabilities into their operations. Mastercard's announced acquisition of BVNK in March 2026 had similar reasoning.

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

The key to scaling stablecoin payments lies here.

Paving the Way

Looking further into the Infrastructure Layer:

1. On/Off Ramps + Currency Exchange. Most business scenarios involve the process "local currency → stablecoin → local currency." This involves banking relationships, compliance, liquidity, and other issues.
2. API + Account Layer. Businesses need a set of financial capabilities embedded into their workflows—account opening, payments, fund splitting, clearing, reconciliation. This is somewhat like financial SaaS, similar to the Neobank concept.
3. Payment Network Connectivity. The more payment rails, banks, and regions connected, the more dependent clients become, gradually increasing switching costs.
4. Capital Efficiency. Helping businesses reduce idle funds, waiting times, and FX losses.

I believe its characteristics dictate a path of initial hardship followed by reward.

• Grunt Work: It requires connecting banks, achieving compliance, obtaining licenses, and building local teams country by country.
• Front-loaded Investment to Capture Entry Points: Businesses won't easily switch their payment infrastructure. Those who first secure large clients, banking relationships, compliance pathways, and local fiat rails will later benefit from network effects. Currently, these companies are in a "land grab" phase, far from harvest time.
• Squeezed by Upstream and Downstream: Upstream issuers take the spread first, while downstream platforms want to control the user interface. The infrastructure layer is in the middle, in an awkward position—"everyone needs you, but no one wants you to earn too much."

Currently, it is in the intermediate stage of moving toward "bargaining power formation."

If we only look at today, the Issuance Layer takes the largest profit, while the Infrastructure Layer is thinner and more capital-intensive.

But if we're talking about how to invest in stablecoins, the seigniorage logic of the Issuance Layer is already well understood by the market, with pricing increasingly revolving around interest rates, regulation, and profit sharing. The Infrastructure Layer is less noticeable today, often simply because it's still in the early investment phase. Bargaining power and user habits haven't fully solidified yet.

Once stablecoins further become the default rails for enterprise funds, the true beneficiaries will be those who, over the years, successfully bridged stablecoins into real-world commercial systems.