Rethinking Stablecoin Monetization

Stablecoin is a killer use case for blockchain. But what is the killer use case for stablecoin?

Last week, Circle made history as the first stablecoin company to file for an IPO. But beyond the headlines, its S-1 filing quietly peeled back the curtain on an industry often assumed to be a cash machine. The numbers told a more nuanced story—one that challenges the common belief that stablecoin issuance business is wildly profitable. Here is my take on what Circle’s key numbers say about stablecoin as an interest-income business. 

As I’ve noted in previous weekly research, earning yield on reserve assets is just one way to monetize stablecoins. I call this the “stock” method: build a large base of reserves, earn interest, and sit back.

But there’s another side of the stablecoin economy—the “flow” model. This involves providing infrastructure and services for how stablecoins are used, not just that they exist.

Much of the recent conversation has focused on stablecoin’s potential takeover of traditional payment use cases. That is only part of the picture. What most miss is the stablecoins flow businesses that don’t require mass consumer adoption or complicated integrations with payment companies. These are the ones where capturing a part of the flow already means billions of dollars.

In this issue, I unpack four markets where stablecoins are already dominant and its flows are already producing tens of billions of dollars every year.

• What are these markets?

• How large are they?

• What revenue opportunities are in these markets?

  
  

We'll answer all of that. And in a future issue, I’ll break down the payment verticals stablecoins are scaling into next.

Let’s start with where the money is already flowing.

Stablecoin Flow Businesses

Here are the markets stablecoins already dominate and let's look at their estimated annual revenue sizes.

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