This report is written by Tiger Research. The issuance of stablecoins is one of the most profitable businesses in the crypto space.
However, with Tether (USDT) and USDC together accounting for over 85% of the market share, it is unrealistic for newcomers to compete on the same reserve interest model.
This report analyzes four issuers, each carving out a unique position in this landscape.
Tether leads with about 62% market share. On top of its core reserve income model, the company is rebuilding trust and diversifying revenue by introducing audits from the Big Four accounting firms and investing $20 billion in new business ventures.
StraitsX does not rely on reserve interest as its main source of income, but focuses on transaction fees. Its integration with Alipay +, GrabPay, and Visa demonstrates its practicality in real-world scenarios, with monthly transfer volumes reaching 2.5 times its market capitalization validating the feasibility of this model. Obtaining a Major Payment Institution license ahead of competitors from the Monetary Authority of Singapore has turned regulatory requirements into its competitive moat.
M0 does not directly issue stablecoins. Instead, it provides shared infrastructure that allows other companies to issue their own stablecoins. MetaMask and Exodus have already been operating stablecoins on this platform. As more issuers and builders join, this model is continuously strengthened through network effects.
KRWQ operates in the absence of a domestic regulatory framework, seizing the offshore demand for the won's non-deliverable forward market, which has operated outside the regulatory system. Once the regulatory framework is established, the company plans to leverage its pre-established offshore liquidity to enter the domestic Korean market, subsequently replicating this model across other major Asian non-deliverable currencies.
The stablecoin issuance market is not trending toward a single business model but is presenting a differentiated landscape. Depending on the size and positioning of each issuer, fundamentally different revenue strategies coexist.
Stablecoin Issuance Market
The issuance of stablecoins is one of the most profitable businesses in the crypto space, attracting more and more institutional participants.
Tether took the lead in this field, establishing itself as the main liquidity provider in the early trading market. Circle followed closely, prioritizing regulatory compliance, and aims to go public on the New York Stock Exchange in June 2025, expanding its influence into traditional finance.
This institutionalization process has pushed the total market capitalization of stablecoins to approximately $300 billion, prompting 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 European Union implemented the Crypto Assets Market Regulation Act, and Hong Kong enacted the Stablecoin Ordinance, marking the full-scale initiation of global regulatory competition.
This growth momentum is expected to accelerate further. Analysis by Tiger Research shows that the net annual supply increment of stablecoins will increase from $55 billion in 2024 to $101 billion in 2025, nearly doubling. If major jurisdictions complete related legislation and institutional demand enters significantly, even under a conservative 15% annual growth rate assumption, the market size is expected to exceed $600 billion by 2030.
The core income model of stablecoins lies in reserve management rather than the act of issuance itself. When a user deposits $1, the issuer mints 1 Tether or USDC and allocates that dollar to low-risk assets like U.S. Treasury bonds and money market funds. As the issuance scale expands, the reserve base and the interest income it generates also grow.
This model is essentially a scale race. To generate substantial income from reserve interest, circulation needs to reach hundreds of billions of dollars. Currently, Tether (about 62%) and USDC (about 25%) together account for over 85% of the market share, with the remaining 15% divided among dozens of smaller issuers. For newcomers, competing solely on the reserve interest model is not realistic.
New entrants are addressing this situation by designing alternative revenue models or completely redefining their businesses. Some companies focus on transaction fees and integration with the real economy as their primary sources of income; others provide issuance infrastructure rather than directly issuing stablecoins, thus earning network service fees; some opt to absorb offshore demand in currency regions with relatively loose regulations before entering their domestic markets once regulatory frameworks are完善
The stablecoin issuance market has not converged to a single model but is moving toward differentiation. Depending on the scale and positioning of the issuers, fundamentally different revenue strategies coexist. The following sections, based on interviews with key participants, analyze how these models operate in practice.
Tether: The Market Benchmark for Stablecoins
Tether first issued the US dollar-pegged stablecoin Tether in 2014, currently holding about 62% of the stablecoin market share, effectively acting as an industry pioneer.
Tether's ability to maintain its decade-long market leadership is not merely due to its first-mover advantage. What drives today’s Tether is a series of proactive and prudent structural changes: a comprehensive reform of the reserve asset composition, shifting from commercial paper to U.S. Treasury bonds; establishing a quarterly external attestation mechanism; and transforming to a diversified business model, reinvesting the profits generated from the stablecoin business into areas such as artificial intelligence, energy, education, and communications.
Business Model
Tether’s revenue sources are diverse, but reserve management remains its core.
Each time Tether issues a Tether coin, it receives an equivalent amount of U.S. dollars, which it invests in secure assets such as U.S. Treasury bonds, reverse repurchase agreements, and money market funds. As the issuance volume rises, the scale of managed assets expands, and interest income accumulates accordingly. In addition, part of the reserves is held in the form of gold and Bitcoin, where price increases in these assets yield additional market value gains. According to public information, reserve management income accounts for the vast majority of its overall profit.
Secondary revenue sources include agreement integration fees and transaction fees. Additionally, Tether has a strategic investment portfolio independent of the Tether reserves, encompassing sectors like artificial intelligence, energy, and communications.
Regulatory Participation
Since the first quarter of 2025, Tether has held a stablecoin issuer license under El Salvador's Digital Asset Law, operating under the supervision of the National Digital Asset Committee. However, some argue this structure limits its transparency. Standard & Poor's has used this as one of the bases for assigning Tether a lower transparency rating.
Tether is addressing this issue by entering the U.S. market separately. Under the framework of the GENIUS Act, the company has launched USAT, a product line designed specifically for the U.S. regulatory environment, while Tether continues as a universal product targeting the global market. These two markets are structurally independent and proceeding in tandem.
Tether is also actively responding to transparency controversies. Although quarterly reserve attestation reports validated by BDO accounting firm have always been its standard practice, Tether officially engaged a Big Four accounting firm to conduct a comprehensive audit of Tether’s reserves in March 2026. Unlike attestations that only confirm the reserve composition at a certain point in time, a comprehensive audit encompasses assets, liabilities, and internal control systems under higher scrutiny standards.
The market has responded. With improvements in Tether's regulatory compliance, Circle’s stock price dropped by about 20%. This indicates that Tether is compensating for its previously most critical competitive shortcoming, reshaping the competitive landscape.
Growth Strategy
Tether's growth strategy focuses on the expansion of real-world assets, technological innovation, and new business development. Its flagship real-world asset product is Tether Gold, a token backed by physical gold stored in Swiss vaults on a 1:1 basis. This product accounts for over half of the total market capitalization of gold-backed stablecoins, and its underlying asset scale continues to expand.
The expansion of new businesses is also proceeding in parallel. Tether's own investment portfolio exceeds $20 billion, widely distributed across sectors like artificial intelligence, energy, media, and communications. This portfolio is completely independent of Tether’s reserves, serving as a growth engine for surplus capital, reinvesting profits generated from stablecoin issuance into long-term growth drivers.
Key Takeaways
The Tether case provides several structural insights for enterprises considering entering the stablecoin business.
First, issuing stablecoins is a scale business. Every Tether coin issued corresponds to an investment in U.S. Treasury bonds. As the issuance volume increases, the amount of Treasury bonds held rises, and interest income increases accordingly. Understanding this direct correlation 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 for Tether, it must operate within the regulatory framework. No matter how unclear the current regulatory framework is, the design of the business structure must consider regulatory integration from the outset. Stablecoins are essentially an industry operating within regulatory confines.
StraitsX: Stablecoin Issuer Targeting the ASEAN Economy
StraitsX is a stablecoin issuer based in Singapore. Its core products are XSGD (pegged to the Singapore dollar) and XUSD (pegged to the U.S. dollar), and it has expanded into other major ASEAN currencies like the Indonesian rupiah.
Not only is its digital asset issuance noteworthy: StraitsX is building payment infrastructure directly connected to the ASEAN real economy. According to on-chain data from the platform rwa.xyz, the monthly transfer volume of XSGD (approximately $39.9 million) is about 2.5 times its market capitalization (approximately $15.8 million).
Compared to mainstream stablecoins like Tether and USDC, StraitsX's absolute asset scale and turnover are still relatively small, but its application scenarios differ fundamentally. Mainstream stablecoins are primarily used for investment transactions on cryptocurrency exchanges, while StraitsX’s tokens are used for everyday real business activities. Data indicates that the tokens it issues are not idled in investors' wallets but are consistently circulating in the market.
StraitsX is regarded as a specialized payment infrastructure for the ASEAN region not only because of on-chain data metrics but also due to its strong corporate payment network integration capabilities.
Business Model
StraitsX's revenue model centers on transaction fees. Reserve interest income is constrained by external variables such as circulation volume and interest rates, while transaction fees are linked to trading volume and can grow in tandem with business expansion.
Reserve Interest Income: The reserves corresponding to circulating XSGD and XUSD are held in trust accounts at DBS Bank, Standard Chartered Bank, and United Overseas Bank. According to the Monetary Authority of Singapore's regulations, the interest belongs to the company, not the token holders. Based on an estimated total circulation volume of about $65 million, the annual income is approximately $2.6 million to $3.25 million.
Payment Processing Fees: Generated every time a stablecoin is used for payment or settlement. Main channels include fund inflow and outflow portals, QR code payment networks (integrated with Alipay + and GrabPay), and card issuance (Visa bank identification sponsorship). This income is linked to transaction volume rather than rates.
Over-the-Counter Trading and Foreign Exchange Swap Spread: Earnings from foreign exchange spreads during stablecoin swaps, buy-sell transactions, and large OTC trades.
Among these, transaction fees primarily arise from StraitsX's external network integration. Major mobile payment platforms like Alipay +, GrabPay, as well as global exchanges like Binance and Bybit, have adopted StraitsX's system for fund settlement, covering various application scenarios. Notably, internal data from StraitsX indicates that the stablecoin payment volume associated with Visa cards has grown 40 times in the past year, with the card issuance growing 83 times during the same period.
Regulatory Positioning
The crypto industry generally sees strict regulations as limiting business expansion. StraitsX has taken the opposite approach by transforming the Monetary Authority of Singapore's regulatory framework into a competitive defense mechanism.
This strategy is based on StraitsX obtaining a Major Payment Institution license from the Monetary Authority of Singapore. With that license, StraitsX is authorized to operate six of the seven major payment services regulated by the Monetary Authority of Singapore. This enables the company to legally conduct cross-border remittances, foreign exchange trading, merchant payments, and account issuance within one legal entity, far beyond the mere issuance of tokens. XSGD and XUSD have been identified as stablecoins that essentially comply with the regulatory framework for single currency stablecoins set by the Monetary Authority of Singapore.
For institutional capital to enter the blockchain ecosystem on a large scale, bank-level Know Your Customer and anti-money laundering systems are prerequisites. Most crypto companies operating outside the regulatory framework cannot meet this standard.
StraitsX is developing a next-generation authentication system based on cryptography in collaboration with regulatory authorities. Its strategy is to proactively meet compliance standards required for future institutional capital inflows, ensuring its capacity to exclusively absorb this capital.
Growth Strategy
After establishing a sustainable revenue model, StraitsX's next goal is to enter new settlement markets. Its long-term growth drivers mainly come from the settlement of real-world assets. As stocks, bonds, and other traditional assets gradually migrate on-chain, the demand for tokenized cash as a settlement means will also grow. StraitsX plans to capture institutional settlement demand by providing cross-chain interoperability across multiple blockchain environments.
Key Takeaways
The StraitsX case indicates that long-term growth drivers primarily stem from real-world asset settlements. As traditional assets like stocks and bonds go on-chain, the demand for tokenized cash as a settlement medium will increase concurrently. StraitsX plans to capture institutional settlement demand early by providing multi-chain compatibility.
First, turnover is more important than total volume. Non-U.S. dollar stablecoin issuers cannot achieve growth solely through issuance scale. It is essential to prioritize real application scenarios and integrate into corporate payment networks. The key metric is turnover, not market capitalization.
Second, regulatory compliance is a competitive moat. StraitsX's early acquisition of a license from the Monetary Authority of Singapore transformed regulatory requirements into structural entry barriers. Stablecoins exist at the intersection of the crypto world and traditional finance, and fundamentally operate within a regulated industry. The speed at which issuers achieve regulatory compliance and their closeness in collaboration with regulatory authorities will become key variables determining competitive success or failure.
M0 Company: Shared Infrastructure for Stablecoin Builders and Issuers
M0 offers shared infrastructure that enables enterprises to launch stablecoins, also allowing financial institutions to issue stablecoins.
M0 does not directly issue stablecoins but instead provides the infrastructure, allowing multiple builders to launch their own stablecoins based on a common technical foundation.
This structure addresses two core issues. First, the stablecoin market is fragmented, with each issuer operating independently with their stablecoin issuing technology stacks, leading to structural difficulties in cross-coin compatibility. Second, without M0, stablecoin builders face a "cold start" issue: they must build liquidity, partnerships, and network effects from scratch for their stablecoins from day one.
M0 simultaneously solves both issues with a shared layer. Each stablecoin on the platform is built based on shared standards and technologies, can share existing liquidity at launch, and can achieve 1:1 exchanges with all other M0-powered stablecoins from the first day.
Stablecoins built on M0 infrastructure currently include MetaMask's mUSD, Exodus's XO Cash, KAST's USDK, Noble's USDN, Usual's UsualM, among others, with more projects under development. Issuers supported by the M0 issuance technology stack include Bridge (a Stripe subsidiary), MoonPay, and 1Money.
Business Model
Issuers: Reputable institutions that hold reserves as collateral, using M0 infrastructure to mint stablecoins, and pay a predetermined fee to the platform based on a portion of the interest earned from the reserves.
Builders: Entities with specific application scenarios that utilize M0 to launch and control their own stablecoins, thereby obtaining economic benefits and directly customizing how the currency operates in their products.
The case of MetaMask's mUSD clearly shows how these two roles collaborate in practice. MetaMask, leveraging M0 technology, designed and built its own stablecoin branded as mUSD, adding the necessary functionalities and product layers to it. Bridge, holding a regulatory license, manages the U.S. Treasury bonds used as collateral and fulfills the platform's obligations, ultimately minting and burning mUSD based on demand.
These two roles are entirely distinct. Bridge does not own the final application scenarios or products; MetaMask has no direct involvement with the collateral. However, the stablecoin that reaches users can be instantly exchanged 1:1 with all other M0-powered stablecoins on the network, and liquidity has been shared since day one, eliminating the need to build from zero.
The starting point for revenue streams is the interest generated from the U.S. Treasury bonds held by issuers. While collecting this interest, issuers must separately pay minting fees to the platform for the unpaid issuance volume (as of March 2026, this fee is 3.33%). The current circulating supply of M0 is approximately $276 million. As more issuers and builders adopt the platform, this figure is expected to continue growing.
Regulatory Participation
M0 positions itself as a technology platform, structurally separating compliance obligations to each issuer.
The core module of M0's stablecoin technology intrinsically embeds the compliance functions required by issuers, including allowlist management, transaction pausing, and asset freezing. However, these functions' actual execution, along with all other regulatory obligations like licensing, anti-money laundering, and Know Your Customer, remain the direct responsibility of each issuer. M0 provides technological tools but does not replace the regulatory responsibilities that issuers must bear.
For this division of responsibilities to operate effectively in practice, issuers must comply with the relevant regulations of each market in which they operate.
M0 believes that the U.S. is the market where stablecoin regulation is progressing fastest. The introduction of the GENIUS Act in July 2025 established a federal-level regulatory framework for stablecoins, subsequently accelerating the demand for enterprises to adopt stablecoins. As major jurisdictions establish clear regulatory frameworks, the demand for stablecoins is continuously expanding, and M0’s opportunity to establish its infrastructure as the market standard is also increasing.
Growth Strategy
M0's current top priority is to expand the total circulation of M0-powered stablecoins on the platform. Since revenue derived from price spreads increases alongside circulation volume, developing a network of builders and issuers is the most critical metric at this stage. In a public interview, CEO Luca Prosperi stated that network expansion will be paramount over the next two to five years.
The builder base has diversified across wallets, gaming, fintech, and payment sectors, with participants including MetaMask, Exodus, Noble, Usual, and Kast. Following the acceleration of institutional adoption demand post the GENIUS Act, this is the ideal time to expand the issuer network. The number of issuers and builders M0 can attract during this window will determine its long-term market position.
Key Takeaways
The M0 case reveals the shift in competitive dynamics within the stablecoin market: competition is transitioning from "which stablecoin gains the highest circulation" to "who first controls the issuer and builder network and infrastructure standards."
First, rapid integration can generate network effects. Building on M0's infrastructure automatically ensures compatibility with all the functions of stablecoins on the platform without the need for repetitive integration work for each stablecoin.
Second, the value of infrastructure increases as the market expands. Not every company has the capability to independently issue stablecoins. As more issuers join, the value of shared infrastructure capable of handling licensing, technology, and liquidity management will continue to rise. This is the reason why M0's structural advantages can continually strengthen alongside market growth.
As long as the stablecoin market does not trend toward a small number of highly concentrated leaders, the value of a universal infrastructure connecting numerous issuers and builders will continue to rise. The key future question is whether the shared standards promoted by M0 can become the foundational layer for the industry.
KRWQ: Bringing the Won On-Chain
KRWQ is a stablecoin pegged to the won, launched in October 2025 in collaboration between IQ Company and Frax. Notably, there is currently no domestic regulatory framework in South Korea for stablecoins priced in won.
KRWQ's target market is not domestic Korea but the offshore market. The won is a currency legally tradable only within South Korea, but there exists significant demand from foreign investors seeking to hedge or speculate on won exchange rate fluctuations. For example, foreign investors holding Samsung Electronics stock are completely exposed to the risks of exchanged rate fluctuations: a strong dollar translates to losses, while a weakened dollar translates to gains. Even investors wishing to eliminate this risk cannot hedge their won exposure directly from outside South Korea.
This has led to the creation of non-deliverable forward products: contracts settled in U.S. dollars based on the difference between the agreed and actual exchange rates, with no direct conversion of won involved. Based on this structure, the won’s non-deliverable forward market has developed into one of the largest trading markets in the global non-deliverable forward field.
KRWQ's strategy is to first capture this offshore demand and enter the domestic market once the regulatory framework is established. That is, "offshore first, onshore follow," just in a sequence opposite to the traditional path.
Business Model
The existing non-deliverable forward market is an over-the-counter market built around bilateral negotiations between banks, characterized by opaque pricing and high transaction costs. The South Korean government’s restrictions on offshore won trading have narrowed the pool of qualified participants and suppressed liquidity. Additionally, trading requires waiting for contracts to expire before settlements, leading to inherent counterparty risks.
The Won Cash Company aims to address these limitations through perpetual contracts. Non-deliverable forwards and perpetual contracts are structurally the same product: neither directly converts to won, both settle in U.S. dollars based on price differences, and both can be used to hedge or place directional bets against won exchange rate risks. The only difference is the maturity date: non-deliverable forwards have fixed expiring dates, while perpetual contracts have none, can operate on-chain around the clock, and provide the same functionality at a lower cost. Recently, KRWQ launched a non-deliverable forward market through EDXM International.
Regulatory Participation
The Won Cash Company employs a dual-track strategy: first establishing business in the offshore market and then, once local regulation is完善, entering the onshore market.
KRWQ's design preemptively references the stablecoin-related legislation currently under review by the South Korean National Assembly, aiming to become the first compliant stablecoin in won. However, the domestic legislative environment in South Korea remains complex. Regulatory uncertainties currently pose barriers to market entry, but for the Won Cash Company, this has also bought time to establish a leading advantage in offshore liquidity ahead of competitors.
In the final phase, the Won Cash Company plans to partner with domestic regulated banks to enable direct deposits and withdrawals of won to support the issuance and redemption of stablecoins.
Growth Strategy
KRWQ's growth strategy spans three phases.
The first phase, offshore demand capture (current phase): building out a trading infrastructure for perpetual contracts based on KRWQ, targeting offshore institutions and decentralized finance protocols.
The second phase, onshore transition: once domestic legislation is passed, leveraging the established offshore liquidity and infrastructure as a foundation to enter the Korean domestic market.
The third phase, replicating promotion to other Asian currencies: beyond the won, the Indian rupee, New Taiwan dollar, and Indonesian rupiah are all major non-deliverable currencies in Asia. These currencies share structural similarities with the won, including capital controls and active offshore non-deliverable forward markets.
Key Takeaways
First, regulatory absence can become an opportunity rather than a passive waiting period. In the Asian stablecoin market, regulation is often seen as a prerequisite for market access, with most participants awaiting legislative measures indefinitely. The Won Cash Company, however, has taken a different perspective: regardless of domestic regulations, real market demand has been active offshore. Offshore liquidity can serve as leverage when entering the onshore market.
Second, the won’s non-deliverable forward market has functioned outside of domestic regulatory jurisdiction all along. The Won Cash Company first absorbed this demand. When the regulatory framework materializes, it will enter the Korean domestic market with the offshore liquidity and infrastructure already established. Its strategy is not to wait but to initiate in areas where income has already been generated.
Where Do Newcomers Still Have Opportunities?
The stablecoin market is highly concentrated, with Tether and USDC combined making up over 85% of the total supply. It is unrealistic for newcomers to compete on the same reserve interest model. However, the cases analyzed in this report show there are multiple pathways to enter this market.
The core principle for newcomers is to avoid competing with Tether and Circle on the same dimension. Winning in the reserve scale competition is impossible, but unique positioning can be found in different directions: payment networks, issuance infrastructures, offshore markets, etc. With the expansion of the stablecoin market, the diversity of competitive forms is also increasing. This industry is not repeating a single model but moving toward differentiation, forming a market landscape where various strategies coexist.
It is important to note that the entities discussed in this report are no longer challengers but have become leaders in their respective fields. Learning from their practices is valuable, but simple replication is not sufficient. The next generation of newcomers must define and address new problems that these pioneers have not yet covered.
Ultimately, the companies that can survive in the stablecoin issuance market will not only be those with differentiated entry strategies but also those capable of executing those strategies and addressing the new issues that arise during the process of scaling. The market has moved beyond the phase of "who can find a new model" to "who can truly implement and operationalize the model."
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