Stablecoin Market Consolidates Around Brand-Name Issuers and Fintech L1s

The stablecoin market is rapidly consolidating around two dominant models: brand-name stablecoins issued by trusted financial institutions and fintech-focused LAYER 1 blockchains. These models are emerging as the primary power centers due to their superior distribution networks, monetization potential, and regulatory compliance.

Brand-name stablecoins leverage existing consumer trust and massive user bases to achieve instant liquidity. By integrating into established wallets with millions of KYC-verified users and merchant networks, these stablecoins eliminate customer acquisition costs. Their monetization strategy relies on low-cost float from reserves invested in short-term assets, supplemented by layered revenue streams including cross-border FX spreads and merchant fees.

Fintech L1s—blockchains specifically designed or controlled by regulated fintech companies—are becoming the other key pillar of stablecoin infrastructure. These purpose-built networks offer defensible positioning within regulatory frameworks while maximizing profitability through tight ecosystem control.

The combination of brand recognition, existing distribution channels, and compliant architecture creates formidable moats that crypto-native alternatives struggle to overcome. This convergence suggests most future stablecoin activity will orbit these two models, marginalizing other approaches in the process.