Stable Standard - Week of February 24, 2025
Stripe's bullish stablecoin outlook, the contested USDC origin story, new product launches from Circle and Avalanche, plus PayPal and Bank of America entering the space...
Stripe Is All In on Stablecoins
Stripe published their 2024 annual letter highlighting $1.4trn Total Processed Volume (TPV), marking a 40% increase year-over-year, and dedicated a significant section to their thoughts on stablecoins. They noted that stablecoin transaction volumes more than doubled between Q4 2023 and Q4 2024, and monthly active wallets have reached 40 million.
The Collison brothers eloquently explain the value of stablecoins: "Stablecoins have four important properties relative to the status quo. They make money movement cheaper, they make money movement faster, they are decentralized and open-access (and thus globally available from day one), and they are programmable. Everything interesting follows from these characteristics."
Additionally, they make the analogy I typically use: that stablecoins are like Eurodollars but more accessible to consumers around the world. "Eurodollars refers to a system of US dollar storage at banks outside the United States—the confusing name stems from European banks being the first hub for this activity, though it now happens around the world. Eurodollars became very popular among non-US corporations despite being far unwieldier than stablecoins. We expect that stablecoins, as an easier-to-use and more accessible version of eurodollars, will bring similar benefits to a much broader group of actors."
The Contested Origins of USDC
The creation of USDC recently became a topic of debate on X among its early founders. According to Balaji Srinivasan, formerly of Coinbase, USDC as a 1:1 fiat-backed stablecoin "did not exist before Coinbase and would not exist without Coinbase." He asserts that while Circle had developed a smart contract, Coinbase provided the crucial elements: banking relationships, $25 million in "clean non-ICO capital," and the user interface for converting USDC 1:1 to USD. Balaji claims that Circle had initially planned to launch USDC via a Cayman Islands ICO, which he argues would have introduced "tremendous and unnecessary regulatory risk" and ultimately "killed the core value prop of USDC." In his view, Coinbase's involvement in mid-2018 fundamentally transformed the project from a potentially risky venture to a legitimate, fully-backed stablecoin.
Circle's perspective from Joao Reginatto offers a significantly different account. According to Joao, Circle had been working on a stablecoin project called "Spark" since late 2017, well before Coinbase's involvement. He directly refutes several of Balaji's claims, stating it is "100% false" that "there was zero fiat support for USDC till Coinbase got involved." Joao explains that Circle already had banking relationships with Silvergate and had "built the most amazing infra to automatically detect USD settlement and mint USDC to customer's accounts." He notes that when Coinbase integrated USDC, "they used the Circle product in the same way everyone else did, sending dollars to Circle's fiat rails." Joao also highlights that USDC was first minted and traded on Poloniex (owned by Circle) in September 2018, before Coinbase's integration.
Noah Spaulding, who describes himself as "the first Centre employee," takes particular issue with Balaji's characterization of the legal groundwork. He states he "literally did all the legal work to launch USDC" and, along with the Circle legal team, "broke completely fresh ground at the time with regulators on how a USD stablecoin should be constructed in the US." While acknowledging Coinbase's distribution value, Noah argues that "USDC doesn't happen without Coinbase involvement" but objects to what he characterizes as Coinbase employees' pattern of claiming full credit.
Stablecoin Product Launches
The last week had a slew of new product launches in the stablecoin space - Here is a high-level summary:
Circle's Modular Wallets - Circle launched new customizable wallet infrastructure for Arbitrum and Polygon PoS networks, offering developers flexible key management, efficient data indexing, and passkey support.
Mural Pay API - Mural Pay released its API enabling virtual accounts, stablecoin and fiat payouts, as well as compliance and payment distribution capabilities. The service targets vertical SaaS providers and financial institutions across the Americas, supporting use cases from export/supply chain to HR, and travel.
Avalanche Card - The Avalanche Foundation launched its Visa credit card allowing users to spend AVAX, wrapped AVAX, USDC, and USDT at any Visa-accepting merchant worldwide. The card, developed in partnership with Rain, connects to users' self-custody wallets and has seen strong adoption in Latin America, the Caribbean, Southeast Asia, and Africa.
Bastion's Trust Charter - Bastion acquired Dibbs Trust and secured a New York Limited Purpose Trust Charter from NYDFS. Bastion's platform will enable institutions to issue branded stablecoins with integrated global payments and loyalty programs.
Tradfi 🤝 Stablecoins
PayPal's PYUSD Expansion - PayPal is continuing to push its integration of PYUSD into its existing B2B products, including cross-border vendor payments without foreign exchange fees and mass payouts through its Hyperwallet platform. During its first investor day under CEO Alex Chriss, the company outlined plans to create more seamless stablecoin solutions for its 20 million merchants. The market cap of PYUSD currently sits at ~$500M.
Thunes' Stablecoin Network - The CEO of Thunes shared his thoughts on the future of stablecoins. He notes that mobile wallets will be the clear winner of the rapidly accelerating cash-to-digital shift in emerging economies across the Middle East, Southeast Asia, and Africa, instead of cards. Secondly, that he sees the digital assets space booming in these regions. He announced that they are starting to partner with stablecoin companies of the likes of Circle, ZeroHash, Ripple, Yellow Card, Paxos, and Lightspark to offer instant stablecoin liquidity via its SmartX Treasury System and real-time settlements to its existing network of partners and fiat wallets.
Bank of America's Stablecoin Plans - Bank of America CEO Brian Moynihan has announced the bank's interest in launching its own dollar-backed stablecoin once there is regulatory clarity from Congress. He ends the interview with this statement, "What it's useful for is going to be interesting."