Author: Ryan Barney and Mason Nystrom, partners at Pantera Capital; Compiled by: 0xjs@金财经

Stablecoins are a trillion-dollar opportunity.

This is not an exaggeration.

While cryptocurrencies are often thought of as having volatility, tokens, and liquidity, the other side of cryptocurrencies, stablecoins, are more quietly carrying the flag for cryptocurrency adoption. For starters, these cryptodollars are pegged 1:1 to the underlying fiat currency, using algorithms (less popular) or reserves (more popular) to maintain the peg.

Stablecoins have accounted for more than 50% of blockchain transactions, up from 3% in 2020. The proposition that stablecoins are the killer app for cryptocurrencies is that, unlike many cryptocurrencies, stablecoins are non-speculative in nature.

In a short period of time, stablecoins have demonstrated the ability to become one of the transformative innovations in the cryptocurrency space. 2024 is a breakthrough moment for stablecoins, with adjusted trading volume exceeding approximately $5 trillion and transaction volume exceeding $1 billion, involving nearly 200 million accounts.

Stablecoins saw impressive growth during the last crypto bull market, but this time, their applications extend beyond the DeFi ecosystem. Over the past few years, stablecoins have demonstrated their core value proposition of seamless cross-border payments, initially enabled by access to U.S. dollars. Accordingly, the fastest-growing regions for stablecoins are emerging markets, where demand for U.S. dollars is high.

Stablecoins offer a 10x value proposition for B2C payments (such as remittances) as well as traditional payment methods for B2B cross-border transactions.

Cryptocurrencies have long been expected to provide solutions to the trillion-dollar cross-border payments market. Cross-border B2B payments via traditional payment channels will reach approximately $40 trillion by 2024 (excluding wholesale B2B payments) (Juniper Research). Within the consumer payments market, global remittances generate hundreds of billions of dollars in revenue annually. Stablecoins now provide the means to enable global cross-border remittance payments through crypto channels.

As the adoption of stablecoins accelerates in the B2C and B2B payments space, the supply and transaction volume of on-chain stablecoins have reached an all-time high.

There’s an old saying in the business world: Few products offer something better, faster, and cheaper all at the same time. Typically, a product can satisfy two of these conditions at the same time, but not all three. Stablecoins offer a better, faster, and cheaper way to move funds around the world.

For businesses and consumers, stablecoins offer a 10x higher value proposition than the traditional U.S. dollar.

UpdateGood: Stablecoins are a more accessible product that can be used 24 hours a day, 365 days a year. Their ease of global cross-border transfer and programmability make stablecoins a superior product to fiat currencies.

Faster: Stablecoins are undoubtedly faster and can be settled instantly instead of taking T-minus 2 or T-minus 1 day to settle.

Image from BVNK report

Cheaper: Stablecoins cost less to issue, transfer and maintain than fiat currency. Stripe, which facilitated more than $1 trillion in payment volume in 2023, has a fee structure starting at 2.9%, plus 30 cents for card transactions. On high-throughput blockchains like Solana or Ethereum L2 like Base, the average stablecoin payment costs less than a cent.

Although the stablecoin stack continues to evolve, there are still some new emerging layers:

Merchant Layer - Applications that initiate retail or commercial transactions Programs and interfaces

Stablecoin integration (Stablecoin Orchestration) - Provider of last mile access, virtual accounts, cross-border stablecoin transfers or stablecoin to fiat currency exchanges

Foreign Exchange and Liquidity - Provider of cross-border stablecoin and other exchanges Provider of USD-pegged stablecoin, fiat or regional stablecoin exchanges.

Stablecoin issuance - companies or protocols that offer white-label stablecoins or first-party stablecoins with differentiated characteristics

Trading with cryptocurrencies Similar to how various corners of the world are springing up to cater to local players, we expect a variety of cryptocurrency cross-border applications and processors to emerge as they cater to specific stablecoin markets.

Just like traditional finance and payments, building moats in every part of the stack is important to expanding business opportunities beyond the initial value proposition. We have considered which moats are defensible and can be expanded over time at each layer:

Merchant Layer – Moats are built by owning the flow of stablecoins from users or businesses. This provides the opportunity to upsell additional services, sell user flows, and own an end-to-end customer experience. Stablecoin Robinhood will emerge following a similar strategy.

Stablecoin integration – license! Whoever gets the license will get the most reliable, global coverage at the cheapest price. Will it be developer friendly? Take a look at the Stripe x Bridge acquisition to understand where and how the moat is formed here.

Foreign exchange and liquidity - liquidity produces liquidity, and flow produces value accumulation. Anything that can access proprietary liquidity and price it efficientlyParticipants will all outperform new entrants without it. This is why a few large exchanges today serve the majority of stablecoin traffic on certain major channels. We also believe that the transition from OTC-style FX to exchange-style FX to on-chain FX will facilitate faster payments and transactions at this layer.

Stablecoin issuance - Over time, issuance will become commoditized and will inevitably lead to the launch of dozens of large brand stablecoins (e.g. PYUSD). As other layers of the stack grow (i.e. merchants, business processes, and liquidity), we expect these layers will have the ability to launch their own stablecoins, whether to capture yield, build their own branded stablecoin, or build a proprietary stablecoin Liquidity and flow.

As the layers of the stack are gradually bundled together, the layers merge over time. The merchant layer is best suited for aggregating the other layers of the stack to provide more value to end users, increase profits, and create additional revenue streams. They will have the power to choose which Forex transactions they do, which access channels they own or lease, and which issuers they use.

Additionally, we expect the issuance of stablecoins to become increasingly common for large fintech companies and e-commerce providers that facilitate large flows of funds. The next generation of neobanks and fintech companies will be defined by stablecoins. Just this month, we heard that large credit card networks like Visa, banks like JPM, and asset managers like Blackrock are interested in exploring stablecoin projects of their own.

The tokenization of the U.S. dollar is still in its infancy.

Even as stablecoin MAUs reach all-time highs, we believe adoption will continue as hundreds of millions of people interact with stablecoins over the next decade.

Importantly, stablecoin users continue to grow even as exchange volumes fluctuate. From bull markets to bear markets, stablecoins have dominated and expanded their digital influence.

As cryptocurrencies rebuild the financial system from the ground up, stablecoins also exist and are integrated into traditional financial payment networks.

While large companies such as Stripe, Visa, and Paypal have entered the stablecoin market, we see a wealth of opportunities for new protocols and companies focused on stablecoins.

Here are some ideas we’re excited about:

Stablecoin Neobanks – The advent of mobile devices has given Neobanks a huge amount of value. Crypto Neobanks will not only provide best-in-class payment channels, but will also power the next generation of consumer financial applications that will aggregate payments, transactions, earnings, lending and other core financial services.

On-chain FX - While most stablecoins are currently pegged to the US dollar, we expect more currencies to be added to the chain, driving the development of the on-chain FX layer. More immediately, with the large number of USD-pegged yields stablecoins offer,With different benefits and value propositions, we expect these initial USD-pegged stablecoins to require an FX layer.

Telegram Payment Rail – Telegram offers a native payments wallet, but we also see a unique opportunity to build a new payment layer on top of Telegram using new interfaces like the TG applet.

Remittances on crypto rails – Remitly, Wise, Intermex, Ria, MoneyGram, Western Union. All remittance companies, each have hundreds of millions to billions of dollars in annual revenue. Money transfer companies charge flat fees that make sense for low amounts (e.g. $6 for a $60 transaction) or high fees (30-100bps per transaction). Stablecoins lower the cost of sending money globally and make the process seamless. money. "Remittance profits are the opportunity for stablecoins." - Jeff "Stables" Besos

Global Venmo - Building a P2P rail to bring Venmo-like functionality to a global scale. Remittances are typically a one-way flow, and this will serve social commerce use cases in a more two-way flow.

Stablecoins support treasury management and operations – as the fintech space expands beyond PayPal payments, it finds applications in wealth management, personal finance, payroll, corporate spend and expense management, neobanking, financial accounting and reporting , lending/mortgages and other areas creating billions of dollars of opportunities. Likewise, stablecoins provide an opportunity to rebuild many of these cumbersome processes with better tracks supported by stablecoins. In the short term, money management and operations have to deal with complex operations, which allows the value proposition of stablecoins to be subverted.

Stablecoins represent a trillion-dollar business opportunity. We want to support founders and visionaries who see a future in stablecoins that are independent of the financial system.