Stablecoin Issuance Market: Four Business Models Reshaping the Market
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Stablecoin Issuance Market: Four Business Models Reshaping the Market
Payment fees, shared infrastructure, and offshore demand have become new battlegrounds.
Navigating Web3 tides with focused insightsAuthor: Tiger Research
Translated by AididiaoJP, Foresight News
Executive Summary
Stablecoin issuance is one of the most profitable businesses in the crypto space.
However, with Tether (USDT) and USDC collectively commanding over 85% of the market share, it is unrealistic for new entrants to compete solely on the same reserve-interest model.
This report analyzes four issuers that have each carved out a distinct position within this landscape.
Tether leads with approximately 62% market share. Beyond its core reserve-yield model, the company is rebuilding trust through audits by the Big Four accounting firms and investing $20 billion into new business lines to diversify revenue.
StraitsX does not rely primarily on reserve interest income but instead centers its revenue model on payment processing fees. Its integrations with Alipay+, GrabPay, and Visa demonstrate real-world utility, while its monthly transaction volume—2.5 times its market capitalization—validates the viability of this model. Having secured Singapore’s Major Payment Institution (MPI) license earlier than competitors, StraitsX has turned regulatory compliance into a competitive moat.
M0 does not issue stablecoins directly. Instead, it provides shared infrastructure enabling other companies to launch their own stablecoins. MetaMask and Exodus already operate stablecoins on this platform. As more issuers and builders join, the model strengthens continuously through network effects.
KRWQ operates in the absence of a domestic regulatory framework in South Korea, capturing offshore demand from the already-active Korean won non-deliverable forward (NDF) market—a market operating outside formal regulation. Once a domestic regulatory framework is established, KRWQ plans to leverage its pre-built offshore liquidity to enter the Korean domestic market, then replicate this model across other major Asian NDF currencies.
The stablecoin issuance market is not converging toward a single business model; rather, it is diverging. Fundamentally different revenue strategies coexist, shaped by each issuer’s scale and strategic positioning.
The Stablecoin Issuance Market
Stablecoin issuance is one of the most profitable businesses in crypto and continues attracting increasing institutional participation.
Tether pioneered this space, establishing dominance early on as the primary liquidity provider in trading markets. Circle followed closely, prioritizing regulatory compliance and listing on the New York Stock Exchange in June 2025, thereby extending its influence into traditional finance.
This institutionalization has pushed total stablecoin market capitalization to roughly $300 billion and prompted major jurisdictions to formally establish regulatory frameworks. The U.S. signed the GENIUS Act in July 2025, creating the first federal regulatory framework for payment stablecoins. The EU implemented the Markets in Crypto-Assets (MiCA) Regulation, and Hong Kong enacted its Stablecoin Ordinance—marking the full onset of global regulatory competition.
This growth trajectory is expected to accelerate further. Tiger Research analysis shows annual net stablecoin supply growth increased from $55 billion in 2024 to $101 billion in 2025—nearly doubling. Assuming even a conservative 15% annual growth rate—and pending completion of relevant legislation in major jurisdictions and substantive institutional demand—the market is projected to exceed $600 billion by 2030.
The core revenue model for stablecoin issuers lies in reserve management—not issuance itself. When users deposit $1, the issuer mints one USDT or USDC and allocates that dollar into low-risk assets such as U.S. Treasuries and money market funds. As issuance scales, both the reserve base and associated interest income grow.
This model is inherently a race for scale. Generating meaningful revenue from reserve interest requires hundreds of billions in circulation. Currently, USDT (~62%) and USDC (~25%) together hold over 85% of market share, leaving just 15% fragmented among dozens of smaller issuers. For latecomers, competing solely on the reserve-interest model is not viable.
New entrants are responding by designing alternative revenue models—or fundamentally redefining their businesses. Some prioritize payment fees and integration with the real economy; others provide issuance infrastructure rather than issuing stablecoins directly, earning network service fees; still others target offshore demand in relatively unregulated currency zones first, entering domestic markets only after regulatory frameworks mature.
The stablecoin issuance market is not converging—it is diverging. Fundamentally different revenue strategies coexist, shaped by each issuer’s scale and positioning. The following sections analyze how these models operate in practice, based on interviews with key participants.
Tether: The Industry Benchmark
Tether launched its USD-pegged stablecoin in 2014 and now commands ~62% of stablecoin market share, effectively serving as the industry’s pioneer.
Tether’s decade-long market leadership stems not merely from first-mover advantage, but from a series of proactive, structural transformations: overhauling reserve composition—from commercial paper to U.S. Treasuries; instituting quarterly external attestation; and transitioning toward a diversified business model, reinvesting profits from stablecoin operations into AI, energy, education, and communications.
Business Model
Tether’s revenue streams are diverse, but reserve management remains central.
Each time Tether issues USDT, it receives an equivalent amount in USD, which it invests in safe assets—including U.S. Treasuries, reverse repurchase agreements, and money market funds. As issuance grows, so does the asset base under management—and accumulated interest income. Additionally, part of the reserves are held in gold and Bitcoin, whose price appreciation generates additional mark-to-market gains. Public disclosures indicate reserve management accounts for the vast majority of Tether’s total profit.
Secondary revenue sources include protocol integration fees and transaction fees. Tether also maintains a strategic investment portfolio—separate from USDT reserves—spanning AI, energy, and communications.
Regulatory Engagement
Since Q1 2025, Tether has held a stablecoin issuer license under El Salvador’s Digital Assets Law and operates under supervision by the National Digital Assets Commission. However, some argue this structure limits transparency. S&P has cited this arrangement as one basis for assigning USDT a lower transparency score.
Tether is addressing this challenge by entering the U.S. market via parallel pathways. Under the GENIUS Act framework, it launched USAT—a product line specifically designed for the U.S. regulatory environment—while continuing to offer USDT as a globally oriented, general-purpose product. These two markets operate independently yet advance in parallel.
Tether is also actively responding to transparency concerns. While quarterly reserve attestation reports verified by BDO have long been standard practice, Tether formally engaged a Big Four accounting firm in March 2026 to conduct a comprehensive audit of USDT reserves. Unlike attestation—which confirms reserve composition at a point in time—full audit applies higher scrutiny standards covering assets, liabilities, and internal controls.
Markets reacted. As Tether improved its regulatory compliance posture, Circle’s stock price fell ~20%, indicating Tether is closing its most significant historical competitive gap—reshaping the competitive landscape.
Growth Strategy
Tether’s growth strategy focuses on real-world asset expansion, technological innovation, and new business development. Its flagship real-world asset product is Tether Gold—a token backed 1:1 by physical gold stored in Swiss vaults. It accounts for over half of total market cap in gold-backed stablecoins, with its underlying asset base continuing to expand.
New business expansion is advancing in parallel. Tether’s proprietary investment portfolio exceeds $20 billion, spanning AI, energy, media, and communications. Fully independent of USDT reserves, this portfolio serves as a growth engine for surplus capital—reinvesting stablecoin profits into long-term growth drivers.
Key Takeaways
Tether’s case offers several structural lessons for any enterprise considering entry into stablecoin issuance.
First, stablecoin issuance is a business of scale. Every USDT issued corresponds to an investment in U.S. Treasuries. As issuance increases, Treasury holdings increase—and so does interest income. Understanding this direct link between issuance volume and asset management scale is the starting point for analyzing any stablecoin business model.
Second, regulatory compliance is a prerequisite—not an option. Even Tether must operate within regulatory frameworks. Regardless of how ambiguous current regulations may be, business architecture must incorporate regulatory alignment from day one. Stablecoins are, by nature, a regulated industry.
StraitsX: A Stablecoin Issuer Anchored in ASEAN’s Real Economy
StraitsX is a Singapore-headquartered stablecoin issuer. Its core products are XSGD (pegged to the Singapore dollar) and XUSD (pegged to the U.S. dollar), with expansion underway into other major ASEAN currencies—including the Indonesian rupiah.
What matters goes beyond digital asset issuance itself: StraitsX is building payment infrastructure directly connected to ASEAN’s real economy. According to on-chain data platform rwa.xyz, XSGD’s monthly transfer volume (~$39.9 million) is ~2.5x its market cap (~$15.8 million).
Compared to global mainstream stablecoins like USDT and USDC, StraitsX’s absolute asset size and turnover remain modest—but its use cases differ fundamentally. Mainstream stablecoins serve primarily as instruments for crypto exchange trading, whereas StraitsX tokens facilitate everyday commercial activity. Data indicates these tokens are not idle in investor wallets but actively circulating in the market.
StraitsX is regarded as a specialized payments infrastructure player in ASEAN—not only due to on-chain metrics, but more importantly due to its robust integration capabilities across enterprise-to-enterprise (B2B) payment networks.
Business Model
StraitsX’s revenue model centers on payment processing fees. Reserve interest income depends on external variables—circulation volume and interest rates—whereas payment fees scale directly with transaction volume.
Reserve interest income: Reserves backing XSGD and XUSD are held in trust accounts at DBS Bank, Standard Chartered, and United Overseas Bank. Per MAS regulations, interest accrues to the company—not token holders. Based on a total circulation of ~$65 million, estimated annual yield is $2.6–3.25 million.
Payment processing fees: Generated each time stablecoins are used for payments or settlements. Primary channels include on/off-ramps, QR code payment networks (integrated with Alipay+ and GrabPay), and card issuance (Visa BIN sponsorship). Revenue ties to transaction volume—not fee rate.
OTC and FX swap spreads: Earned from stablecoin swaps, buy/sell transactions, and large OTC trades.
Payment fees are generated primarily through StraitsX’s external network integrations. Leading mobile payment platforms—including Alipay+ and GrabPay—as well as global exchanges like Binance and Bybit, have adopted StraitsX’s system for settlement across multiple use cases. Notably, internal StraitsX data shows stablecoin payments linked to Visa cards grew 40x year-on-year, while card issuance volume rose 83x.
Regulatory Positioning
The crypto industry widely views strict regulation as a constraint on business expansion. StraitsX takes the opposite approach—turning MAS regulation into a competitive defense mechanism.
This strategy rests on StraitsX’s MAS Major Payment Institution (MPI) license. With this license, StraitsX is authorized to operate six of the seven major payment services regulated by MAS—including cross-border remittances, foreign exchange, merchant payments, and account issuance—far exceeding simple token issuance. XSGD and XUSD have been recognized as stablecoins compliant with MAS’s single-currency stablecoin regulatory framework.
For institutional capital to meaningfully enter blockchain ecosystems, bank-grade KYC and AML systems are fundamental prerequisites—standards most crypto-native firms operating outside regulatory oversight cannot meet.
StraitsX is co-developing, with regulators, a next-generation cryptographic identity verification system. Its strategy is to proactively satisfy future institutional capital inflow requirements—ensuring exclusive access to that capital.
Growth Strategy
Having established a sustainable revenue model, StraitsX’s next goal is to enter new settlement markets. Its long-term growth driver centers on real-world asset settlement. As traditional assets—including equities and bonds—migrate on-chain, demand for tokenized cash as a settlement instrument will rise in tandem. StraitsX plans to capture institutional settlement demand by offering cross-chain interoperability across multiple blockchain environments.
Key Takeaways
The StraitsX case demonstrates that long-term growth is driven primarily by real-world asset settlement. As traditional assets move on-chain, demand for tokenized cash as a settlement medium will grow proportionally. StraitsX plans to secure institutional settlement demand early by delivering cross-chain compatibility across multiple blockchain environments.
First, velocity matters more than total volume. Non-USD stablecoin issuers cannot grow solely on issuance scale—they must prioritize authentic use cases and integrate into enterprise B2B settlement networks. Key metrics are velocity—not market cap.
Second, regulatory compliance is a competitive moat. StraitsX secured the MAS license ahead of peers, transforming regulatory requirements into structural entry barriers. Stablecoins sit at the intersection of crypto and traditional finance—and are, by nature, a regulated industry. An issuer’s speed of regulatory alignment—and depth of collaboration with regulators—will become decisive competitive variables.
M0: Shared Infrastructure for Stablecoin Builders and Issuers
M0 provides shared infrastructure enabling enterprises—and financial institutions—to launch stablecoins.
M0 does not issue stablecoins directly. Instead, it delivers infrastructure allowing multiple builders to launch their own stablecoins atop a common technical foundation.
This architecture solves two core problems. First, the stablecoin market is fragmented: individual issuers run isolated technology stacks, making cross-token compatibility structurally difficult. Second, without M0, stablecoin builders face a “cold-start” problem—they must build liquidity, partnerships, and network effects from scratch on Day One.
M0 resolves both challenges simultaneously via a shared layer. Every stablecoin built on M0 shares common standards and technology—meaning instant access to existing liquidity and seamless 1:1 exchange with all other M0-powered stablecoins upon launch.
Stablecoins built on M0 infrastructure include MetaMask’s mUSD, Exodus’s XO Cash, KAST’s USDK, Noble’s USDN, and Usual’s UsualM—with more in development. Issuers powered by M0’s issuance stack include Bridge (a Stripe subsidiary), MoonPay, and 1Money.
Business Model
Issuers: Regulated entities holding reserves as collateral, using M0 infrastructure to mint stablecoins, and paying the platform a negotiated fee from a portion of reserve interest earned.
Builders: Entities with specific use cases leveraging M0 to launch and control their own stablecoins—capturing economic upside and customizing monetary mechanics directly into their products.
The MetaMask mUSD case clearly illustrates how these two roles collaborate in practice. MetaMask leveraged M0’s technology to design and build its branded stablecoin mUSD—adding required features and product layers on top. Bridge holds the regulatory license, manages U.S. Treasury collateral, fulfills platform obligations, and ultimately mints/burns mUSD on demand.
These roles are fully separated. Bridge owns neither the end-user application nor the product; MetaMask never touches the collateral. Yet the stablecoin reaching end-users can instantly exchange 1:1 with every other M0-powered stablecoin on the network—with shared liquidity available from Day One, eliminating the need to bootstrap from zero.
Revenue originates from Treasury interest earned on issuers’ collateral. While issuers collect this interest, they pay M0 a minting fee—currently 3.33% (as of March 2026)—on outstanding issuance volume. M0’s current circulating supply stands at ~$276 million. This figure is expected to grow as more issuers and builders adopt the platform.
Regulatory Engagement
M0 positions itself as a technology platform and structurally delegates compliance obligations to individual issuers.
M0 embeds issuer-required compliance features—including allowlists, transaction pausing, and asset freezing—directly into its stablecoin core module at the technical level. However, actual enforcement of these features—and all other regulatory obligations including licensing, AML, and KYC—remains the sole responsibility of each issuer. M0 supplies technical tools but does not substitute for issuers’ regulatory accountability.
For this division of responsibilities to function effectively in practice, issuers must comply with applicable regulations in every jurisdiction where they operate.
M0 considers the U.S. the most advanced market for stablecoin regulation. The July 2025 GENIUS Act established a federal stablecoin regulatory framework, after which enterprise adoption demand accelerated markedly. As major jurisdictions establish clear regulatory frameworks—and stablecoin demand expands—M0’s opportunity to cement its infrastructure as the market standard grows correspondingly.
Growth Strategy
M0’s top priority today is expanding the total circulating supply of M0-powered stablecoins on its platform. Since spread-based revenue scales with circulation, growing the builder-and-issuer network is the critical metric at this stage. In public interviews, CEO Luca Prosperi stated network expansion will be paramount over the next two to five years.
The builder base is already diversified across wallets, gaming, fintech, and payments—featuring MetaMask, Exodus, Noble, Usual, and Kast. With enterprise adoption demand accelerating post-GENIUS Act, this window presents the optimal moment to expand the issuer network. How many issuers and builders M0 attracts during this period will determine its long-term market position.
Key Takeaways
The M0 case reveals a shift in stablecoin competition: the contest is no longer “which stablecoin achieves the highest circulation?” but “who first controls the issuer-and-builder network—and sets the infrastructure standard?”
First, rapid integration creates network effects. Building on M0 infrastructure automatically grants compatibility with all stablecoin functionalities on the platform—eliminating redundant integration work per stablecoin.
Second, infrastructure value grows with market scale. Not every company can independently issue stablecoins. As more issuers join, the value of shared infrastructure capable of managing licensing, technology, and liquidity rises commensurately—precisely why M0’s structural advantage strengthens alongside market growth.
As long as the stablecoin market avoids extreme concentration among a few dominant players, the value of universal infrastructure connecting numerous issuers and builders will continue rising. The key question ahead is whether M0’s shared standard becomes the industry’s foundational infrastructure layer.
KRWQ: Bringing the Korean Won On-Chain
KRWQ is a Korean won-pegged stablecoin launched in October 2025 through a partnership between IQ and Frax. Notably, South Korea currently lacks a domestic regulatory framework for won-denominated stablecoins.
KRWQ’s target market is not domestic—but offshore. The Korean won is a currency legally tradable only within Korea, yet substantial offshore demand exists from foreign investors seeking to hedge or speculate on won exchange rate risk. For example, foreign investors holding Samsung Electronics stock face full exposure to won volatility: a stronger USD means losses; a weaker USD means gains. Even investors wishing to eliminate this risk cannot directly hedge their won exposure from outside Korea.
This has given rise to non-deliverable forwards (NDFs): USD-settled contracts where payout equals the difference between agreed and actual exchange rates—without actual won conversion. Built around this structure, the Korean won NDF market has become one of the world’s largest NDF markets.
KRWQ’s strategy is to first capture this offshore demand—and only enter the domestic market once Korea establishes its regulatory framework. That is, “offshore first, onshore follow”—but in reverse order of the traditional path.
Business Model
The existing NDF market is an over-the-counter (OTC) market built around bilateral bank negotiations—characterized by opaque pricing and high transaction costs. Korean government restrictions on offshore won trading narrow the pool of qualified participants and suppress liquidity. Moreover, settlement only occurs at contract maturity—creating inherent counterparty risk.
KRWQ aims to solve these constraints via perpetual contracts. Structurally, NDFs and perpetuals are identical products: neither involves direct won conversion; both settle in USD based on price differentials; both enable hedging or directional bets on won exchange rate risk. Their only distinction is expiration: NDFs have fixed maturities, whereas perpetuals have no expiry—operating 24/7 on-chain and delivering identical functionality at lower cost. Recently, KRWQ launched an NDF market via EDXM International.
Regulatory Engagement
KRWQ adopts a dual-track strategy: first establish operations offshore, then enter the onshore market once domestic regulation matures.
KRWQ’s design anticipates pending stablecoin-related legislation under review in the Korean National Assembly—positioning it to become the first compliant won stablecoin. Yet the domestic legislative environment remains complex. Regulatory uncertainty poses a short-term barrier to market entry—but for KRWQ, it also buys time to build a leading offshore liquidity advantage ahead of competitors.
In the final phase, KRWQ plans to partner with domestically regulated Korean banks to enable direct won deposits and withdrawals—supporting stablecoin issuance and redemption.
Growth Strategy
KRWQ’s growth strategy unfolds in three phases.
Phase One – Offshore Demand Capture (Current Stage): Build perpetual contract trading infrastructure for offshore institutions and DeFi protocols.
Phase Two – Onshore Transition: Upon passage of domestic legislation, leverage pre-established offshore liquidity and infrastructure to enter the Korean domestic market.
Phase Three – Replication Across Other Asian Currencies: Beyond the won, the Indian rupee, Taiwanese dollar, and Indonesian rupiah are all major Asian NDF currencies. These share the same structural traits as the won—capital controls exist alongside active offshore NDF markets.
Key Takeaways
First, regulatory absence can be an opportunity—not passive waiting. In Asia’s stablecoin markets, regulation is typically viewed as a prerequisite for market access, with most participants waiting indefinitely for legislation. KRWQ takes a different view: regardless of domestic regulation, real offshore demand already exists. Offshore liquidity can serve as leverage for onshore entry.
Second, the Korean won NDF market already operates outside domestic regulatory jurisdiction. KRWQ captured this demand first. When regulation arrives, it will enter the Korean domestic market armed with pre-built offshore liquidity and infrastructure. Its strategy isn’t waiting—it’s launching first in revenue-generating domains.
Where Do Latecomers Still Have Opportunity?
The stablecoin market is highly concentrated—USDT and USDC together account for over 85% of total supply. For new entrants to compete solely on the same reserve-interest model is unrealistic. Yet the cases analyzed in this report show multiple viable paths into the market.
The core principle for latecomers is to avoid competing head-on with Tether and Circle along the same dimensions. Winning the reserve-scale race is impossible—but unique positioning is attainable: in payment networks, issuance infrastructure, offshore markets, and beyond. As the stablecoin market expands, competitive forms multiply. This industry is not repeating a single model—it is diverging into a multi-strategy market.
It bears noting that the entities discussed in this report are no longer challengers—they are already leaders in their respective niches. Learning from their approaches is valuable—but mere replication is insufficient. Next-generation entrants must define and solve new problems left unaddressed by these pioneers.
Ultimately, the companies that survive in stablecoin issuance will be not only those with differentiated entry strategies—but those capable of executing them and solving the new challenges that arise during scaling. The market has moved beyond “who can find a new model?”—into “who can truly operationalize and validate it?”
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