The Evolution of Stablecoins: From Niche to Mainstream Adoption

Author: Alice

The global financial system is in the midst of a profound wave of change. Traditional payment networks are facing all-round challenges from emerging alternatives - stablecoins due to outdated infrastructure, lengthy settlement cycles and high fees. These digital assets are rapidly revolutionizing the mode of cross-modular value flow, the paradigm of corporate transactions and the way individuals obtain financial services.

In the past few years, stablecoins have continued to develop and have become an important underlying architecture 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, from payment gateways to deposit and withdrawal channels to programmable income products, have greatly improved the convenience of using stablecoins.

This report deeply analyzes the stablecoin ecosystem from both a technical and commercial perspective. It studies the key players that shape this field, the core infrastructure that supports stablecoin transactions, and the dynamic needs that drive its application. In addition, it explores how stablecoins can give rise to new financial application scenarios and the challenges they face in the process of being widely integrated into the global economy.

1. Why choose stablecoin payment?

To explore the impact of stablecoins, it is first necessary to 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 part of everyday life, the infrastructure for many payment channels, such as ACH and SWIFT, has existed since the 1970s. Although groundbreaking at the time, most of these global payment infrastructures are now outdated and highly fragmented. In general, these payment methods are plagued by high fees, high friction, long processing times, the inability to achieve 24/7 settlement, and complex back-end procedures. In addition, they are often bundled (for a fee) with unnecessary additional services such as identity verification, lending, compliance, fraud protection, and bank integration.

Stablecoin payments are effectively solving these pain points. Compared with traditional payment methods, using blockchain for payment settlement greatly simplifies the payment process, reduces intermediate links, and achieves real-time visibility of capital flow, which not only shortens settlement time but also reduces costs.

The main advantages of stablecoin payments can be summarized as follows:

2. Stablecoin Payment Industry Landscape

The stablecoin payment industry can be divided into four technology stack levels:

1) Layer 1: Application Layer

The application layer is mainly composed of various payment service providers (PSPs), which integrate multiple independent deposit and withdrawal payment institutions into a unified aggregation platform. These platforms provide users with convenient stable currency access, provide tools for developers developing 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 area include:

The field of payment gateway providers can be clearly divided into two categories (there is 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.

Payment gateways for developers are designed to serve enterprises, fintech companies, and businesses that need to embed stablecoin infrastructure into their workflows. They typically provide application programming interfaces (APIs), software development kits (SDKs), and developer tools to integrate into existing payment systems to enable features such as automatic payments, stablecoin wallets, virtual accounts, and real-time settlements. Some emerging projects that focus on providing such developer tools include:

Consumer-facing payment gateways are user-focused, providing a simple, easy-to-use interface for stablecoin payments, remittances, and financial services. They typically include mobile wallets, multi-currency support, fiat on/off ramps, and seamless cross-border transactions. Some notable projects focused on providing this simple payment experience to users include:

b. U card

Crypto cards are payment cards that allow users to spend cryptocurrencies or stablecoins at traditional merchants. These cards are usually integrated with traditional credit card networks (such as Visa or Mastercard) to enable seamless transactions by automatically converting cryptocurrency assets into fiat currency at the point of sale.

Projects include:

There are many cryptocurrency card providers, which mainly differ in the service areas and supported currencies, and usually provide low-fee services to end users to increase their enthusiasm for using cryptocurrency cards.

2) Second Layer: Payment Processors

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 key middle layer in the payment life cycle, connecting Web3 payments with traditional financial systems