Stablecoin profits migrate from issuers to payment rails, research finds
Tiger Research says Tether and Circle dominate issuance, but the real growth and revenue now sit in payments, compliance and on-ramp infrastructure.
The most consequential competition in stablecoins is no longer over who mints the tokens, but over who controls the infrastructure that moves them once they exist. That is the central finding of a new report from Tiger Research, which maps the stablecoin market into five distinct commercial layers and concludes that issuance itself has become the least contestable of them.
An oligopoly at the top, a scramble below
Tiger Research puts the total stablecoin market at roughly $300 billion, with dollar-pegged tokens accounting for 99.99% of that supply. Tether and Circle together control about 83% of the sector, a concentration the report attributes to a self-reinforcing cycle of liquidity, trust and scale that makes head-on competition for primary issuance largely unwinnable for new entrants.
For firms arriving late, the report’s advice is to avoid minting altogether and instead position as “middleware” — supplying licensing, custody, distribution or settlement services to the incumbents rather than competing with them directly. Circle’s own model is cited as evidence of how issuance economics now depend on distribution incentives rather than the token itself: dollars deposited via Circle Mint are converted 1:1 into USDC, with reserves parked in cash and money-market instruments, including a fund managed by BlackRock. Circle’s revenue-sharing arrangement with Coinbase, under which external distribution income is reportedly split evenly between the two, illustrates how issuers now engineer partnerships around liquidity channels as much as around the coin itself.
Margins thin at the on-ramp, then reappear at the endpoints
Beneath issuance sits the fiat on-ramp layer, which Tiger Research describes as increasingly commoditised. Net take rates for on-ramp providers are estimated to converge around 3%, squeezed by near-identical offerings across the sector. MoonPay is presented as a representative case: a non-custodial platform earning from per-transaction fees and spreads, which the report argues will need to move into embedded, white-label distribution deals or expand into issuance and settlement to build more durable revenue.
Cross-border remittances are where the cost case for stablecoins is starkest. Traditional transfer corridors carry average costs above 6%, against a near-negligible on-chain leg for stablecoin transfers. Yet the report stresses that value is captured not in the transfer itself but at its edges — through foreign-exchange spreads, fiat conversion and regulatory compliance. That has given rise to what Tiger Research terms “compliance-as-infrastructure” models, in which licensing readiness, such as navigating state-by-state money transmitter rules in the United States, becomes a defensible commercial moat rather than a mere cost of doing business.
Payroll and asset management point to where the money settles
The report singles out Rise, a platform that allows companies to pay salaries in fiat or USDC and has processed more than $1.5 billion in cumulative volume, as an example of how remittance-style services are evolving into broader enterprise offerings. Its differentiation lies not in payment rails but in bundling KYC/AML checks, country-specific contract generation, tax documentation and employer-of-record functions into a subscription-style product, with revenue drawn from monthly fees, volume-based charges and management of idle balances.
Tiger Research’s broader argument is that stablecoins should be understood less as a wholesale replacement for banking rails and more as a technical upgrade layered on top of them. If that framing holds, the industry’s centre of economic gravity looks set to shift away from issuers’ balance sheets — the subject of most current regulatory scrutiny — and towards the settlement, compliance and asset-management layers where recurring revenue and deeper customer relationships are built. For European institutions and regulators focused chiefly on reserve backing and redemption rights at the issuance level, the report is a reminder that the more durable commercial and supervisory questions may lie further down the payments stack.
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