Most stablecoins will be complementary goods
- The margin compression
- Complementary goods, not products
- The PayPal archetype
- Issuer as a service
- What this means for the ecosystem
There's a conversation I keep having with stablecoin issuers that goes like this: they tell me their margins are compressing. I tell them that's the point.
If you're a new entrant into the stablecoin issuance space and you think you're just going to make money as an asset manager, you're out of your mind. The margins are going to go to zero. The only companies that will thrive issuing stablecoins are companies whose real business is something else — and the stablecoin makes that something else work better.
The margin compression
Max from MoonPay put it bluntly: "every bip matters." There is crazy margin compression in the stablecoin stack. The yield on Treasuries backing a stablecoin might be attractive today, but as more issuers enter the market, competition will force yield-sharing with distributors, partners, and eventually holders. Circle is already deploying most of its seigniorage back to Coinbase through revenue-sharing agreements. That's not a bug — it's the equilibrium.
The only issuers with enough scale to run a profitable standalone business on float alone are Circle and Tether. Everyone else is already cross-subsidizing stablecoin issuance with other products. MoonPay bundles issuance with on-ramps, virtual accounts, and cross-chain swaps. Rain bundles it with cards. Others bundle it with custody, compliance, or lending.
Stablecoins are becoming loss leaders.
Complementary goods, not products
There's an old Joel Spolsky essay about commoditizing your complements. The idea: smart companies make their complements cheap and abundant, because that increases demand for their core product. Microsoft made PCs cheap to sell more Windows. Google made browsers free to sell more search ads.
Stablecoins are the complement. The core product is everything else — payment gateways, international remittances, on-ramps, embedded wallets, corporate treasury management.
When I told Max that stablecoins have to be a complementary good to the rest of his business, he immediately agreed. Your stablecoin instrument reduces your cost of goods sold for the rest of your business and allows you to be top of funnel. It's the hook, not the business.
This reframes the entire competitive landscape. The question isn't "which stablecoin will win?" It's "which company has the most valuable core business that a stablecoin enhances?" A company with a great payments product and a mediocre stablecoin will beat a company with a great stablecoin and no payments product — because the stablecoin's margins are heading toward zero anyway.
The PayPal archetype
PayPal understood this early. PYUSD isn't designed to be the most profitable stablecoin. It's designed to drive usage across the rest of the PayPal ecosystem — Venmo, the payment gateway, international remittances. The stablecoin is a distribution channel for their core business, not a standalone product.
Edward Woodford from Zero Hash sees this clearly: "I believe in a world of money in motion. I just don't believe banks are going to offer stored value in stablecoins. I believe that they use it as money motion." The stablecoin is the rail, not the destination.
This is why PayPal's structure is clever. They're within the existing banking system — clearing through traditional banks, maintaining all the regulatory access that provides — while using the stablecoin as a product feature that makes their core business more competitive.
Issuer as a service
If most stablecoins are complementary goods, then most companies don't need to build issuance infrastructure from scratch. They need someone to handle the boring parts — the bank accounts, the reserve management, the compliance, the audits — while they focus on their actual business.
This is exactly what's emerging. MoonPay is targeting 25 or more white-label stablecoins in 2026 through an "issuer as a service" model. The pitch: we handle mint, burn, reserves, and compliance. You get a branded stablecoin hooked into our full distribution stack — ramps, virtual accounts, crypto-to-crypto swaps. You don't need to separately negotiate ramp partnerships because you're already plugged in.
This maps to the issuing syndicates thesis I've written about before. We won't have thousands of independent issuers each managing their own bank accounts and reserve portfolios. We'll have five to seven issuing syndicates — infrastructure providers like MoonPay, Paxos, or Anchorage — each operating the back end for dozens of branded stablecoins. The Starbucks dollar, issued by one of these syndicates, with Starbucks focusing on what it actually cares about: the rewards program and the customer relationship.
The compliance complexity alone drives this consolidation. Max described the problem: to onboard an issuer into MoonPay's global infrastructure requires multi-entity onboarding across US and European jurisdictions. Do that for 20 issuers and you're looking at 80 or more separate compliance onboardings. Only a few companies will have the appetite to manage that at scale.
What this means for the ecosystem
If stablecoins are complementary goods, several things follow:
More stablecoins, not fewer. Every company with a large customer base and a payment-adjacent business has an incentive to issue a branded stablecoin — because it reduces their costs and increases engagement. The number of stablecoin brands will grow even as the number of actual issuers consolidates.
Clearinghouses become critical. If there are dozens of branded stablecoins all backed by the same issuing syndicates, you need infrastructure to move between them seamlessly. A user holding the Starbucks dollar needs to be able to pay someone who only accepts USDC. That's the clearinghouse problem — and it only gets bigger as complementary-good stablecoins proliferate.
The value shifts to distribution. When issuance becomes a commodity, the companies that control distribution — on-ramps, wallets, point-of-sale integrations — capture the value. This is the classic platform dynamic: commoditize the layer below you to capture value at your layer.
Neutral infrastructure wins. If every issuer is also a competitor in some adjacent market, they need neutral infrastructure for interoperability. MoonPay's stablecoin can't rely on Stripe's infrastructure to be treated fairly, and vice versa. A clearinghouse with no dog in the issuance fight becomes the trusted middle.
The stablecoin economy is heading where every mature financial system ends up: the money itself is commoditized, and the real businesses are built on top of it. The smart companies aren't trying to win the stablecoin market. They're using stablecoins to win their actual market.
Quotes
"Every bip matters" — margin compression
Source: Max (MoonPay) / Sam — Jan 24, 2026
Max (MoonPay): There is crazy margin compression in this stack. Where you kind of cross-finance everything — stablecoin ramps with other business parts. Virtual accounts, cards, swaps. I don't want to say stablecoins become the loss leader, but they're...
Sam: No, no. Stablecoins have to be a complementary good to the rest of your business. That's a really important strategic framing. Unless you're Circle or Tether, you're probably not going to have your profitability be driven by your stablecoin issuance. Your stablecoin instrument reduces your COGS for the rest of your business and allows you to be top of funnel.
Issuance margins going to zero
Source: Sam Broner / Edward (Zero Hash) — Jan 9, 2026
Sam: If you're a new entrant into the stablecoin issuance space and you think you're just going to make money as an asset manager, you're out of your mind. The margins are going to go to zero. But if you're PayPal — well, the stablecoin is a complementary good. Their actual business is the payment gateway and their international remittance product. Our goal was just to make this complementary good that smooths the rails more useful so that people actually use the goods they want to drive them to.
Money in motion, not stored value
Source: Sam Broner / Edward (Zero Hash) — Jan 9, 2026
Edward (Zero Hash): I believe in a world of money in motion. I just don't believe banks are going to offer stored value in stablecoins. I believe that they use it as money motion — which is kind of where you sit.
MoonPay's white-label strategy
Source: Sam / Zach (MoonPay) — Jan 31, 2026
Zach (MoonPay): We've actually been doing white labels first. We don't have a MoonPay stablecoin on the market right now.
Sam: Got it. And on the issuer side — what's the downside to collaborating?
Zach: I'm just trying to understand — it seems like there's no downside. I'm sold on the issuer collaboration. Happy to circulate the MOU internally and get buy-in.
Compliance complexity of multi-issuer onboarding
Source: Max (MoonPay) / Sam — Jan 24, 2026
Max (MoonPay): To build this from a structural point of view, you have to have a really easy and quick process to onboard issuers. I just looked at MoonPay and we're licensed in so many jurisdictions — it requires multi-entity onboarding. Every issuer we onboard, it's four entities or more. Now you do 20 issuers — that's 80 onboardings. And it just explodes. So I was like, I'm not going to be the fastest here.