Who is the biggest winner in this wave of stablecoin craze?

Author: Yue Xiaoyu

With the listing of Circle, the leader in compliant stablecoins, a benchmark effect has been created, and domestic investors have also begun to pay attention to stablecoins.

Various stablecoin payment conferences are emerging one after another, and companies are organizing various learning activities. Of course, the cryptocurrency community is also actively discussing it, and great scholars are debating it.

Behind all the excitement, who is actually making money right now?

In fact, according to the overall process, the development of stablecoins can be divided into three stages, and different roles can make money in these three stages.

The first stage is to apply for a license.

Compliance comes first, and everyone is currently applying for a license in Hong Kong.

The biggest problem with Hong Kong's regulation is that it is too strict and has too many requirements. Many companies don't know how to meet the regulatory requirements.

At this time, law firms jumped out to provide legal consulting services to companies applying for licenses, helping them submit materials and communicate with regulators.

So at this stage, the law firm made money first.

The second stage is to build technology.

Compliance and technology can go hand in hand. Many companies apply for licenses while building technical systems. Once the license is approved, they can immediately launch their own stablecoins and seize the initiative.

If you wait until the license is issued before starting the project, you will miss the time window and it will be too late.

It is quite complicated to do stablecoin payments, which requires compliance services, asset management services, token issuance services, liquidity management services, security services, etc.

Specifically including KYB, KYT, AML, order management, address management, clearing and settlement, deposits and withdrawals, contract audits, on-chain security, etc.

However, traditional Web2 companies actually lack relevant experience and talent in blockchain development, so they need to cooperate with Web3 technology service companies.

Therefore, at this stage, many Crypto technology service providers also began to attract customers and directly obtained income.

The third stage is channel promotion.

If you have a license and the technology is in place, you can start your business directly.

However, at present, most companies are still in the first and second stages, and the third stage is at most in the negotiation stage.

But once the business is launched, it will be a "hundred-coin war".

For stablecoins, liquidity is the core.

Various stablecoins need to find their own business scenarios and expand their scale of use.

Then channel promotion is very important, and we need to find large-scale channels to cooperate with.

A typical example is Circle. The rapid rise of USDC is mainly due to the liquidity and brand endorsement provided by Coinbase's strong support.

This is a clear development path. For Hong Kong stablecoin players, they must also bind various channels to seize the market.

Well, in this stage of the Hundred Coins War, the most profitable channels are naturally various channels, including exchanges, e-commerce platforms, cross-border trading companies, etc.

After going through the above three stages, the stablecoin that finally emerges can really make money.

Eventually, a stablecoin will emerge and become the leader in Hong Kong or the Chinese region. It will squeeze the space of other competitors and gain the majority of market share through the siphon effect.

After having a solid market share, the next step is naturally to increase profits, and this is when stablecoin issuers make money.

Looking at the domestic taxi wars, shared bike wars, and food delivery wars, they all follow this path.

It’s a melee at the beginning, and the player who emerges victorious at the end will take all. Moreover, after the subsidy war, they need to recuperate, reduce subsidies and increase unit prices in order to make a profit.

At this time, the profits are also very terrifying, and the stablecoin issuers themselves can only make profits by relying on huge amounts of assets.

In addition to various project parties, for ordinary users, the more direct benefit is that when the new stablecoin forces seize the market and liquidity through subsidies, we retail investors can also arbitrage from it.

In short, the stablecoin craze can be said to be "big fish in big waters", and we must grab our own piece of the pie.