The biggest trap of stablecoins: 99% of companies issuing tokens are just "self-congratulating"

Source: Artemis Analytics

Author: Mario Stefanidis

Original Title: Stablecoins Are a Rail, Not a Brand

Translation and Editing: BitpushNews

Stablecoins are permeating traditional finance in a patchy yet undeniable way.

Klarna recently launched KlarnaUSD on Stripe’s first-layer network Tempo, built specifically for payments; PayPal’s issuance of PYUSD on Ethereum has doubled its market cap in three months, with stablecoins surpassing 1% of market share and supply approaching $4 billion; Stripe has begun using USDC to pay merchants; Cash App has expanded its services from Bitcoin to stablecoins by early 2026, allowing its 58 million users to seamlessly send and receive stablecoins within their fiat balances.

Although each company approaches differently, they are all responding to the same trend: stablecoins make fund flows extremely simple.

Data Source: Artemis Analytics

Market narratives often jump straight to “everyone will issue their own stablecoin.” But this outcome is unlikely. A world with dozens of widely used stablecoins is manageable, but if there are thousands, chaos will ensue. Users do not want their dollars (yes, dollars, with over 99% dominance) scattered across numerous branded tokens, each on its own chain, with different liquidity, fees, and exchange paths. Market makers earn spreads, cross-chain bridges charge fees—this layered “taking a cut” in middlemen is precisely what stablecoins aim to solve.

Fortune 500 companies should realize that stablecoins are extremely useful, but issuing one is not a guaranteed win. A few select companies will leverage them to gain distribution channels, reduce costs, and strengthen their ecosystems. Many others may bear operational burdens without clear returns.

True competitive advantage comes from embedding stablecoins as “payment rails” into products, rather than simply branding tokens with their own label.

Why Stablecoins Are Gaining Favor in Traditional Finance

Stablecoins solve specific operational issues that legacy payment rails have failed to address for traditional companies. These benefits are easy to understand: lower settlement costs, faster fund availability, broader cross-border coverage, fewer intermediaries. When a platform processes millions of transactions daily, with total annual transaction volume (TPV) reaching billions or even trillions of dollars, small improvements compound into significant economic gains.

1. Lower Settlement Costs

Most consumer platforms accept card payments and pay interchange fees per transaction. In the US, these fees can be about 1%-3% of the transaction amount, plus fixed fees of around $0.10-$0.60 per card network (American Express, Visa, MasterCard). If payments are settled on-chain, stablecoin settlement can reduce these costs to just a few cents. For high-volume, low-margin companies, this is an attractive leverage point. Note that they do not need to replace card payments entirely with stablecoins—covering a portion of transactions can already generate cost savings.

Data Source: A16z Crypto

Some companies choose to partner with service providers like Stripe to accept stablecoin payments settled in USD. While not necessary, most businesses prefer zero volatility and instant fiat settlement. Merchants typically want USD to arrive in their bank accounts, not to manage crypto custody, private keys, or reconciliation issues. Even with Stripe’s floating fee of 1.5%, this is significantly lower than credit card alternatives.

It’s easy to imagine large enterprises initially partnering with stablecoin payment solutions and later weighing whether to invest in building their own fixed infrastructure. Ultimately, for small and medium-sized businesses aiming to retain nearly all economic benefits, this trade-off will become reasonable.

2. Global Reachability

Stablecoins can flow across borders without negotiations with each country’s banks. This advantage appeals to consumer apps, marketplaces, gig platforms, and remittance products. Stablecoins enable them to reach users in markets where financial relationships are not yet established.

FX fees for credit card end-users are typically an additional 1%-3% per transaction unless using fee-free cards. Stablecoins incur no cross-border fees because their payment layer does not recognize borders; USDC sent from a wallet in New York to Europe arrives just as it would locally.

For European merchants, the only extra step is deciding how to handle received USD-denominated assets. If they want to receive euros in their bank accounts, they must convert. If they are willing to hold USD on their balance sheet, no conversion is needed—and if they idle the balance on exchanges like Coinbase, they might even earn yields.

3. Instant Settlement

Stablecoins settle within minutes, often seconds, whereas traditional payment transfers can take days. Additionally, the former operates 24/7, unaffected by bank holidays, cut-off times, or other inherent banking system constraints. Stablecoins eliminate these limitations, greatly reducing operational friction for companies handling high-frequency payments or managing tight cash cycles.

How Traditional Companies Should Approach Stablecoins

Stablecoins create opportunities but also exert pressure. Some companies can use them to expand product coverage or cut costs, while others risk losing some economic benefits if users shift to cheaper or faster rails. The right strategy depends on the company’s revenue model, geographic footprint, and reliance on legacy payment infrastructure.

Some benefit from adding stablecoin rails because it reinforces their core products. Platforms serving cross-border users can settle funds faster and avoid friction with local banks. If they process millions of transactions, keeping payments on-chain can lower settlement costs.

Many large platforms operate with razor-thin profit margins. If stablecoins allow them to bypass even 1-3 basis points of costs on part of their fund flows, the savings can be substantial. On a $1 trillion annual TPV, reducing costs by 1 basis point is worth $1 billion. Leading companies adopting this approach include fintech-native, low-capital-cost payment rails like PayPal, Stripe, and Cash App.

Other companies adopt stablecoins because competitors might use them to bypass parts of their business models. For example, banks and custodians face real risks from stablecoins—they could lose low-cost funding sources as stablecoins take market share from traditional deposits. Issuing tokenized deposits or offering custody services could serve as early defenses against new entrants.

Stablecoins also lower cross-border remittance costs, which introduces risks to remittance businesses. Defensive adoption is more about preventing erosion of existing revenue rather than growth. The defensive camp includes a diverse set of players—from Visa and MasterCard charging interchange and settlement fees, to Western Union and MoneyGram on the remittance front, to banks of all sizes relying on low-cost deposits.

Given that in payments, whether on offense or defense, slow adoption of stablecoins could threaten survival, Fortune 500 companies face a key question: Should they issue their own stablecoin or integrate existing tokens—what makes more sense?

Data Source: Artemis Analytics

It’s not sustainable for every company to issue a stablecoin. Users want frictionless experiences; if they have to choose from dozens of branded tokens in their wallets—even if all are denominated in the same currency—they may prefer fiat.

Supply Trajectory

Companies should assume only a small fraction of stablecoins can sustain deep liquidity and broad acceptance. But this is not a “winner-takes-all” industry. For example, Tether’s USDT was the first fiat-backed stablecoin, launched in October 2014 on Bitcoin’s Omni Layer. Despite competitors like Circle’s USDC launched in 2018, Tether’s dominance peaked in early 2024, surpassing 71%.

As of December 2025, USDT accounts for 60% of total stablecoin supply, with USDC at 26%. This means other alternatives control about 14% of the roughly $430 billion total market cap. While this seems small compared to trillions in equities or fixed income markets, stablecoin total supply has grown 11.5x from $26.9 billion in January 2021, with a CAGR of 63% over the past five years.

Even with a more conservative 40% annual growth rate, by 2030 stablecoin supply could reach approximately $1.6 trillion—more than five times current value. 2025 will be a pivotal year for the space, driven by significant regulatory clarity from the GENIUS Act and large-scale institutional adoption spurred by clear use cases.

By then, the combined dominance of USDT and USDC may decline. With a current quarterly decline rate of 50 basis points in market share, by 2030, other stablecoins could account for 25% of the space, roughly $400 billion, based on our supply forecasts. This is a substantial figure but clearly insufficient to support tokens of the size of Tether or USDC.

When there is clear product-market fit, adoption can happen rapidly and benefit from the broader growth of stablecoin supply, potentially capturing share from current dominant players. Otherwise, newly issued stablecoins may get lost in a “stablecoin hodgepodge” with low supply and unclear growth stories.

Note that among the 90 stablecoins tracked by Artemis, only 10 have a supply exceeding $1 billion.

Corporate Case Studies

Companies experimenting with stablecoins are not following a single script. Each responds to its own business pain points, and these differences are more significant than their similarities.

PayPal: Defending Core Business While Testing New Rails

PYUSD is primarily a defensive product first, then a growth product. PayPal’s core business still runs on cards and bank transfers, which generate most of its revenue. Branded checkout and cross-border fees are significantly higher.

Stablecoins threaten this stack by offering cheaper settlement and faster cross-border movement. PYUSD allows PayPal to participate in this shift without losing control over user relationships. As of Q3 2025, the company reported 438 million active accounts—defined as users who transacted within the past 12 months.

PayPal already holds user balances, manages compliance, and operates a closed-loop ecosystem. Issuing stablecoins naturally fits this structure. The challenge is adoption, as PYUSD competes with USDC and USDT, which already have deeper liquidity and broader acceptance. PayPal’s advantage lies in distribution, not price. PYUSD only works if PayPal can embed it into its workflows and those of Venmo.

Data Source: Artemis Analytics

PYUSD and Venmo are similar—both are growth vehicles for PayPal but not direct revenue generators. By 2025, Venmo will generate about $1.7 billion in revenue, roughly 5% of its parent’s total. However, monetization is underway through Venmo debit cards and “Pay with Venmo” products.

PYUSD currently offers a 3.7% annualized reward rate for holding the stablecoin in PayPal or Venmo wallets, meaning PayPal’s net interest margin (holding US Treasuries as collateral) is likely breakeven at best. The real opportunity lies in fund flows, not idle balances. If PYUSD reduces PayPal’s reliance on external rails, lowers settlement costs for certain transactions, and keeps users within its ecosystem rather than flowing outside, PayPal stands to benefit.

Additionally, PYUSD supports defensive economics. Open stablecoins like USDC face “disintermediation” risks—by issuing its own stablecoin, PayPal reduces the chance that its services become a paid or bypassed external layer.

Klarna: Reducing Payment Friction

Klarna’s focus on stablecoins is on control and cost. As a “buy now, pay later” provider, Klarna sits between merchants, consumers, and card networks. It pays interchange and processing fees on both ends. Stablecoins offer a way to compress these costs and simplify settlement.

Klarna helps consumers finance short-term and long-term purchases. For plans within a few months, Klarna typically charges 3-6% per transaction plus about $0.30. This is its largest revenue source, compensating for processing payments, assuming credit risk, and increasing merchant sales. Klarna also offers longer installment plans (6, 12, 24 months), with interest rates similar to credit cards.

In both cases, Klarna’s focus is not on becoming a payment network but on managing internal fund flows. Faster, cheaper settlement with merchants improves margins and strengthens merchant relationships.

The risk is fragmentation—unless Klarna-branded tokens are widely accepted outside its platform, long-term holding of token balances offers no benefit to Klarna. In short, for Klarna, stablecoins are a tool, not a product.

Stripe: Building the Settlement Layer, Not Issuing Tokens

Stripe’s approach is the most disciplined. It chooses not to issue stablecoins but to focus on enabling payments and collections using existing stablecoins. This distinction is important because Stripe does not need to win liquidity—only the flow of funds.

Stripe’s annual TPV grew 38% YoY in 2024, reaching $1.4 trillion; at this rate, despite being founded over a decade later, it may surpass PayPal’s $1.8 trillion annual TPV. Its recent valuation of $106.7 billion reflects this growth.

Support for stablecoin payments indicates clear customer demand. Merchants want faster settlement, fewer banking restrictions, and global reach. Stablecoins address these needs. By supporting assets like USDC, Stripe improves its product without requiring merchants to manage another balance or bear issuer risk.

Earlier this year, Stripe acquired Bridge Network for $1.1 billion to reinforce this strategy. Bridge focuses on native stablecoin payment infrastructure, including deposit/withdrawal channels, compliance tools, and global settlement rails. Stripe’s acquisition of Bridge is not about issuing tokens but internalizing the pipeline. This move gives Stripe more control over its stablecoin strategy and improves integration with existing merchant workflows.

Data Source: PolyFlow

Stripe wins by acting as the interface for stablecoins. Its strategy reflects its market position, handling trillions in transactions annually with double-digit growth. Regardless of which token dominates, Stripe remains neutral and charges per transaction. Given the low underlying costs of stablecoin transactions, any fixed fee it charges in this new market will boost its margins.

Merchant Pain Points: Simplicity Is Justice

Merchants’ interest in stablecoins is simple: high acceptance costs, and these costs are obvious.

In 2024, US merchants paid $187.2 billion in processing fees to accept $11.9 trillion in customer payments. For many small and medium businesses, these fees are the third-largest operational expense after labor and rent. Stablecoins offer a feasible way to reduce this burden in specific use cases.

Beyond lower costs, stablecoins provide predictable settlement and faster fund availability. On-chain transactions are final, whereas credit card or traditional payment solutions may involve refunds or disputes. Merchants also prefer not to hold cryptocurrencies or manage wallets, which is why early pilots look like “stablecoin in, dollars out.”

According to Artemis’s latest survey in August 2025, merchants processed $6.4 billion in enterprise-to-enterprise stablecoin payments, ten times the volume in December 2023.

Data Source: Artemis Analytics

This dynamic also explains why merchant adoption tends to concentrate quickly. Merchants do not want to support dozens of tokens, each with different liquidity, conversion costs, and operational characteristics. Each additional stablecoin introduces complexity and reconciliation challenges from market makers or bridges, undermining the original value proposition.

Therefore, merchant adoption favors stablecoins with clear product-market fit. Stablecoins lacking features that make transactions easier than fiat will gradually fade away. From a merchant’s perspective, accepting one long-tail stablecoin offers no significant advantage over not accepting any stablecoin.

Artemis’s stablecoin map illustrates how chaotic the current landscape is. Merchants simply will not bother dealing with dozens of deposit/withdrawal channels, wallets, and infrastructure providers just to convert income into fiat.

Data Source: Artemis ( stablecoinsmap.com )

Merchants reinforce this outcome by standardizing on effective assets. Payment processors reinforce this by supporting only assets their customers actually use. Over time, the ecosystem will consolidate around a limited set of tokens that are worth the integration effort.

Why This Matters

All these effects create instability in the stablecoin ecosystem: Issuing alone is not a sustainable business model.

A company whose main product is “we mint stablecoins” is betting on liquidity, distribution, and usage growing naturally. In reality, these only emerge when a token is embedded into real payment flows. The “if you build it, they will come” mentality does not apply here, because consumers face hundreds of issuers offering options.

That’s why companies like Agora or M0, which only issue tokens, will struggle to demonstrate long-term advantage unless they significantly expand beyond issuance. Without control over wallets, merchants, platforms, or settlement rails, they are downstream of the value they seek. If users can just as easily hold USDC or USDT, liquidity will not be dispersed into another branded dollar token.

In contrast, companies that control distribution, fund flows, or integration points become more powerful. Stripe benefits without issuing stablecoins; it is directly on the merchant settlement path, earning revenue regardless of which token dominates. PayPal can demonstrate the viability of PYUSD because it owns wallets, user relationships, and checkout experiences. Cash App can integrate stablecoins because it already aggregates balances and controls user experience. These companies leverage their position through usage.

The real insight is that if you are upstream in the stack but only have a bare token, you are in a highly integrated market.

Stablecoins reward your position in the architecture, not novelty.

Conclusion

Stablecoins change how money flows, not what money is. Their value comes from reducing settlement friction, not creating new financial instruments. This fundamental distinction explains why stablecoins are adopted within existing platforms rather than alongside them. Companies use stablecoins to optimize existing processes, not to disrupt their business models.

This also explains why issuing stablecoins should not be the default choice. Liquidity, acceptance, and integration capability are far more important than branding. Without ongoing use cases and clear demand, new tokens only add operational burdens without creating advantages. For most companies, integrating existing stablecoins is more scalable—markets naturally favor a few assets that can be used everywhere, rather than many tokens suited only for narrow use cases. Before minting a doomed stablecoin, strategic offensive or defensive positioning must be clear.

Merchant behavior further reinforces this trend. Merchants always seek simplicity and reliability. They will adopt only payment methods that reduce costs and do not add complexity. Stablecoins that can be seamlessly embedded into existing workflows will be favored; those requiring extra reconciliation, conversion steps, or wallet management will be phased out. Over time, the ecosystem will filter out the few stablecoins with clear product-market fit.

In payments, simplicity determines adoption—only stablecoins that make fund flows more convenient will survive; the rest will be forgotten.