Can stablecoins change everyday finance?
Who benefits when payments and settlement move onto stablecoin rails?
What’s at stake
A stablecoin combines a payment network with a claim on backing assets. Its usefulness to a customer is different from the interest income it produces for the issuer. The recurring questions are where it improves an actual payment, who receives the financial benefit and how existing banks respond.
The ideas that connect
Start with a payment that is slow or expensive
Cross-border business payments provide a concrete use case: a merchant wants to move money without waiting days or paying large conversion fees. Armstrong’s example and Yakovenko’s account of card infrastructure point to a practical change beneath the interface. Stablecoins could alter settlement even when customers keep using familiar payment brands.
Supporting passages
2026-01-23
Yeah. So, the biggest growth area of last year has been B2B cross-border payments.
Cross-border?
Yeah. Cross-border especially. Because there's a lot of these companies, you know, they might be buying goods from Asia or Europe, trying to sell it in their shop in Brazil or whatever it is. And they have to wait seven days and there's high FX fees and all this kind of stuff to move.
It's crazy, the fees.
Open the source and seek to the timestamp above.
2025-09-18
It's like vapor. I think the issuer and receiver bank, those are the most disruptible pieces on there because their profit margins are like 2%, like much, much bigger and Visa is a technology company that owns end-to-end the customer. If they could remove the banks out of the loop and just do stable coin transfers behind the scenes, I think they become a lot more successful and they can do a lot more for a lot less.
Open the source and seek to the timestamp above.
Holding a dollar token is not the same as earning its yield
An issuer can earn interest on reserves while the holder simply has a dollar-denominated balance. The reserve-income explanation and Allaire’s distinction between direct interest and platform rewards reveal a distribution question, not just a technical one. The person supplying the balance, the issuer maintaining the system and the platform bringing customers may all seek part of that value.
Supporting passages
2025-11-22
So I'm getting to this. So now Tether and Circle and World Liberty, they earn interest on that. And so now when the number gets big enough, this number gets ginormous. Then what they do in Tether's case is they then reinvest this capital into all kinds of distributed assets, Bitcoin, gold, real estate. But what they also do is they now invest in things like financial inclusion in Africa. So he walked me through kind of a bunch of things that he's doing yesterday. It is an incredible business.
And so as a holder of the stable coin in my wallet, I'm not earning any of that treasury yield. I just have a flat dollar denominator or dollar protected stable coin.
Open the source and seek to the timestamp above.
2026-01-25
So Genius Act does that. But it also, I think, provides so, you know, as a result, under the Genius Act circle as a payment stable coin issuer, we're prohibited from paying interest directly to stable coin holders. It's the same thing in Europe. We're regulated in Europe. Same rule. Same thing in Japan. All these markets is the same. But at the same time, like, we're building a business. We do generate revenue and we work with lots of different types of platforms and markets and distributors and brokages. We work with everyone from Robinhood to Revolut to Coinbase to, you know, Visa and lots of companies. And so those companies, you know, stable coins are really important too, because they are how people hold money, how people make payments, how people trade, how people do a lot on those platforms.
Open the source and seek to the timestamp above.
Banks and payment networks need not react alike
A network could use stablecoin settlement to reduce intermediaries while keeping its customer relationship. Banks face a different question if balances move away from deposits. This explains why the same technology can look like an efficiency tool to one incumbent and a threat to another. Rules around rewards matter because they affect how attractive it is to hold money outside a traditional account.
Supporting passages
2025-09-18
It's like vapor. I think the issuer and receiver bank, those are the most disruptible pieces on there because their profit margins are like 2%, like much, much bigger and Visa is a technology company that owns end-to-end the customer. If they could remove the banks out of the loop and just do stable coin transfers behind the scenes, I think they become a lot more successful and they can do a lot more for a lot less.
Open the source and seek to the timestamp above.
2026-01-25
So Genius Act does that. But it also, I think, provides so, you know, as a result, under the Genius Act circle as a payment stable coin issuer, we're prohibited from paying interest directly to stable coin holders. It's the same thing in Europe. We're regulated in Europe. Same rule. Same thing in Japan. All these markets is the same. But at the same time, like, we're building a business. We do generate revenue and we work with lots of different types of platforms and markets and distributors and brokages. We work with everyone from Robinhood to Revolut to Coinbase to, you know, Visa and lots of companies. And so those companies, you know, stable coins are really important too, because they are how people hold money, how people make payments, how people trade, how people do a lot on those platforms.
Open the source and seek to the timestamp above.
Today’s issuer margins are not a permanent business model
Reserve income depends on both circulating balances and the return earned on backing assets. Lower rates can reduce that income even if payments keep growing. Competition can also shift benefits toward users or distributors. The contrast between the attractive reserve business and the cross-border payment use case makes the distinction clear: durable utility does not guarantee that today’s issuer captures the same margin forever.
Supporting passages
2025-11-22
The other challenge they're going to have is when interest rates go down, these businesses are going to have to figure that out as well. But $183 billion in circulating USDT, that's a ticker symbol right now. $135 billion of that's in treasuries, and then another like $10 billion in Bitcoin and gold. And land. Well, that means they're throwing off whatever 5 percent. They were making $7-$8 billion a year just on the holdings.
Open the source and seek to the timestamp above.
2026-01-23
Yeah. So, the biggest growth area of last year has been B2B cross-border payments.
Cross-border?
Yeah. Cross-border especially. Because there's a lot of these companies, you know, they might be buying goods from Asia or Europe, trying to sell it in their shop in Brazil or whatever it is. And they have to wait seven days and there's high FX fees and all this kind of stuff to move.
It's crazy, the fees.
Open the source and seek to the timestamp above.
What remains unresolved
Can practical payment adoption support a durable business as rates and competition change? Compare the user’s settlement experience with the issuer’s revenue model rather than treating them as the same success measure.
A selected guide · September 2025–September 4, 2026 · Sources and method