Stablecoins and their immense potential

Stablecoins have proven their product market fit for crypto, serving a valuable service through powering payments and trading activity. Beyond this utility, they also can generate lucrative revenue streams for both the stablecoin issuers and the protocols upon which they operate. This month we are going to dive into these revenue opportunities and the impact that stablecoins are delivering.

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All the way back in December 2020, we wrote about stablecoins and their role in e-commerce. Ironically, this was at the time when Terra was gaining traction through its role as an ecommerce payment method in South Korea and this was a focus of our letter back in 2020. As many of you will remember, Terra spectacularly imploded, but stablecoins as a vertical have continued to grow over the years, serving as a vital bridge between traditional finance and the world of digital assets.

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As a quick refresher, stablecoins are tokens that are pegged to a stable asset, most commonly the U.S. dollar at a 1:1 ratio. In most instances, this peg is maintained through reserves of fiat currency or cash equivalent assets such as U.S. Treasuries. The stability of the peg makes stablecoins a reliable medium for transactions, unlike volatile digital assets like bitcoin or ether, whose prices can fluctuate dramatically in USD terms. Stablecoins act as on- and off-ramps for fiat currency, connecting traditional money and digital assets. This functionality has made them a cornerstone for digital payments, crypto trading and DeFi activities.

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The first key use case for stablecoins is in payments, where they offer a faster and cheaper solution to traditional methods, particularly in cross-border remittances, merchant payments, and business-to-business (B2B) transactions. Unlike bank wires, which can cost USD50 and take days to settle, stablecoin transactions often confirm within seconds and cost fractions of a dollar. In remittances, stablecoins provide a low-cost solution for migrant workers sending money home. In e-commerce, stablecoins allow merchants to accept digital payments without the high fees associated with credit card processors. For payroll and B2B transactions, stablecoins offer businesses a way to streamline international payments, bypassing costly intermediaries.

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On the payments side, it is impossible to overlook the impact of Tether’s USDT and the value that this has brought to the Tron blockchain. USDT is the largest stablecoin by market capitalization, with the Tron blockchain surpassing Ethereum in USDT transaction volume. In 2025, over USD16bn in USDT was minted on Tron, with weekly transfer volumes exceeding USD21bn (dwarfing Ethereum’s USD8bn). Tron now processes over 55% of global USDT volume and hosts the majority of Tether in circulation.

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While USD-denominated stablecoins are most prevalent, other stablecoin currencies are starting to emerge with specific use cases in mind. A Titan Fund portfolio company is Hong Kong-based IDA, a stablecoin company focused on launching HKDA which is pegged 1:1 to the Hong Kong dollar. The focus for IDA is to allow seamless cross-border commerce and payments. By integrating with traditional finance and leveraging Hong Kong’s regulatory framework, IDA earns fees from high-volume cross-border transactions, particularly in trade finance and e-commerce.

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Beyond payments, stablecoins are now core infrastructure for trading and DeFi activity in the crypto space. On centralized exchanges like Binance and Coinbase, stablecoins serve as primary trading pairs (e.g. BTC/USDT), enabling users to park funds without converting to fiat. On DEXes like Uniswap and Curve, stablecoins provide liquidity pools that facilitate token swaps, earning liquidity providers trading fees. Stablecoins also serve as collateral in decentralized lending and borrowing protocols like Aave and Compound, enabling users to borrow against their holdings or lend to earn interest. Additionally, in market neutral funds such as our Crest and SyzCrest products, quant traders exploit minor price discrepancies across exchanges through arbitrage. These traders use stablecoins as a stable base to capture profits.

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When it comes to revenue opportunities, they exist both for the stablecoin issuer as well as for protocols and projects that are making use of stablecoins. For the stablecoin issuer, there are four core revenue avenues:

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• Interest on reserves: issuers like Tether and Circle hold reserves in low-risk instruments such as U.S. Treasuries and money market funds, which generate interest income. Over the last few years, Tether has earned staggering profits as interest rates climbed. In 2023 Tether booked USD6.2bn in net income, with USD4bn coming from interest on U.S. Treasury bills in its portfolio. Now in 2025, Tether’s total reserves of US Treasuries are over USD120bn making it one of the world’s top 20 holders of US Treasuries.
• Transaction and redemption fees: at the user level, sending a stablecoin costs very little or nothing, but issuers frequently monetize activity behind the scenes. For example, stablecoin companies often charge fees for large-scale minting or redemption of tokens. In early 2025, it was reported that Tether was earning over USD122 million per week in fees across Ethereum, Tron, and other networks. These fees come from mechanisms like USDT issuance/redemption charges and revenue-sharing with exchanges that integrate USDT. Tether is an incredible business; it is not only the largest stablecoin but also one of the most profitable companies in the world! 
• Lending reserves: other than parking reserves in treasuries, some issuers lend out a portion of their fiat reserves to institutions or facilitate crypto-collateralized loans. On the decentralized side, users mint the stablecoin DAI by posting crypto collateral and paying a stability fee (interest) to Maker. That interest (effectively a lending revenue) goes to MakerDAO or to DAI holders who use the DAI Savings Rate. 
• Partnerships: stablecoin issuers are increasingly partnering with traditional financial institutions and payment processors to expand adoption. These collaborations often involve revenue-sharing agreements. For example, Circle shares revenue with Coinbase from USDC transactions, leveraging Coinbase’s platform to drive adoption. This deal reportedly grants Coinbase up to 100% of the interest earned on USDC that is held on Coinbase’s exchange.

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Outside of the stablecoin issuer, an increasing number of businesses are appearing that are using stablecoins as the core proposition within their offering. For example:

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• Accountable: a DeFi platform and portfolio company of the Digital Asset Funds that creates structured products called lending vaults. These vaults aggregate stablecoin deposits and deploy them across various lending strategies, such as providing liquidity to DeFi protocols or lending to creditworthy borrowers. Unlike traditional collateral-heavy lending, Accountable assesses borrower creditworthiness, enhancing capital efficiency by reducing over-collateralization requirements. The platform earns revenue through management fees (a percentage of assets under management) and performance fees (a share of the yield generated).
• OpenTrade: a Titan Fund portfolio company that specializes in stablecoin yield products for neobanks, crypto exchanges, custodians, and stablecoin issuers. OpenTrade allows clients to offer white-labelled, embedded yield products backed by high-quality assets like treasuries, bonds, ETFs, private credit, and trade finance, delivering predictable risk-adjusted returns ranging from 3-9% APY. The company generates revenue through a combination of licensing fees for its programmable reserves infrastructure and transaction fees from stablecoin-based financial products.
• Genius: a Digital Asset Fund portfolio company that focuses on cross-chain asset management and trading. The platform leverages USDT and USDC to mint usdGG, its native stablecoin, enabling users to swap assets across blockchains like Ethereum, Solana, and Arbitrum through the Genius Bridge Protocol (GBP). The platform clips a small fee which is distributed to those who stake usdGG.

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Stablecoins have solidified their position as a cornerstone of the digital asset market, offering stability, liquidity, and utility across payments, trading, and DeFi. Their USD250bn market cap and dominance in transaction volume, surpassing Visa and Mastercard combined in 2024, underscore their critical role. Circle’s blockbuster IPO, backed by major underwriters like Goldman Sachs and JPMorgan, signals strong institutional support and validates regulated stablecoins as investable assets. This has paved the way for broader institutional adoption and with the Circle price tripling immediately after the IPO, it has supercharged demand for these types of public listing.

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Looking ahead, at CMCC Global we foresee the continued adoption of stablecoins as both a payment mechanism and used within financial products. Innovative yield models make them more attractive than traditional finance competitors and with tokenization on the rise it is natural that a digitally native form of fiat will become dominant in the digital economy. We are directly invested in stablecoin projects with our Titan Fund investment in IDA. We are also invested in multiple projects that use stablecoins as a core piece of business infrastructure with portfolio companies like OpenTrade, Accountable and Genius. Stablecoins are becoming a foundational building block for the future of digital finance and we are excited to be supporting and financing this transformation.