At Paxos I worked on stablecoins issued for some of the biggest names in finance, including Binance’s BUSD, PayPal’s PYUSD and USDG for the Global Dollar Network. On every one of those launches, issuing the stablecoin turned out to be the easy part. Most of the work came afterward. There are many problems to solve for a newly issued stablecoin, but the first and most critical one is making sure users and businesses can get in and out efficiently on every chain and against every other dollar they already used.
This problem is about to start accelerating at a rapid pace.
Two dollars used to be enough
Stablecoins took off because traders needed a calm place to sit between positions in Bitcoin and Ether. Tether gave them that, Circle followed with USDC, and Binance launched BUSD for the same reason. Two tokens were enough for that, and USDT and USDC still hold more than 85% of a roughly $300 billion market. The rest, around $50 billion, is spread across a long tail that grows every month, and the newest issuers look nothing like the old ones.
Since 2025 we’ve seen:
- MetaMask launch mUSD in partnership with M0 and Stripe’s Bridge
- Phantom launch CASH through Stripe's issuance platform
- SoFi Bank issue SoFiUSD and make it the first stablecoin from a US national bank offered inside a consumer banking app
- Western Union launch USDPT on Solana
We’ve also seen the formation of consortiums around stablecoins. The Global Dollar Network, built around Paxos-issued USDG, has grown past 150 partners, including Robinhood, Kraken, and OKX, who share in its reserve economics as they help it circulate.
In September of this year, Open USD went live, backed by Coinbase, Mastercard, Shopify, Stripe and Visa.
Add PayPal's PYUSD, and the list of serious dollars now includes payment networks, banks, wallets and money transmitters, each with its own customers and its own reasons to issue.
Why everyone wants a stablecoin
When I was at Cash App, one of the things we looked at every Monday morning was platform inflows versus outflows. The FinTech business model is built around maximizing the dollars coming into the platform and minimizing the dollars going out, because dollars sitting on the platform can be monetized through a variety of products and dollars that leave can’t. So a lot of product prioritization came back to the same question: how do we give users more reasons to keep their dollars on the platform?
Stablecoins let a company keep earning on a dollar after it leaves. A hypothetical Cash App stablecoin would still be monetized inside Cash App’s own products. It would also be monetized while it sits in a lending market like Aave or Morpho, while it serves as liquidity in a Uniswap pool, and while it settles a cross-border merchant order. None of that happens on Cash App, and all of it generates economics for whoever owns a share of the stablecoin.
That expands the monetizable surface area from one app to every place the dollar can go, and it keeps growing as more protocols, chains and merchants accept it. Any FinTech, bank or exchange with meaningful balances now has a reason to own a piece of a stablecoin. Some will launch their own, others will join a network, and few will be content to grow the economics of someone else’s.
The same story, for every asset
This pattern will repeat for every asset that gets tokenized after the dollar. Qivalis, a bank consortium now at 37 banks across 15 countries, will launch into a market where eight MiCA-compliant Euro stablecoins split less than $700 million. Tokenized US Treasuries already span 76 separate products.
The traditional world has roughly 180 currencies, more or less one version of each. Over the next decade, I believe we’ll see currency consolidation with 10 or fewer currencies dominating most of global trade and finance. Onchain, we’ll end up with five or six prominent versions of each of those currencies, accelerating the onchain liquidity fragmentation problem we’re seeing with US dollar stablecoins already.
The math of fragmentation
For every version of an asset to trade directly with every other version, you need a pair for each combination. Two dollars need one pair. Five need ten. Ten need 45. Twenty need 190.
Then multiply by chains. USDC alone is issued natively on more than 30. If every pair needed its own pool on every chain, ten widely held dollars across 20 chains would mean 900 separate markets, each needing depth. Add Euros, commodities and Treasuries, and the count runs into the thousands. Nobody builds thousands of deep pools by hand.
What it costs to launch a new dollar
When we launched new stablecoins at Paxos, one of the first things we did was build stable pools onchain, pairing the new coin against USDT or USDC so holders could get in and out. That meant putting up capital to seed the pools and paying market makers to keep prices tight.
It worked for one coin on one chain. Then the coin moved to a new chain and we built the pools again. A new partner wanted a new pair and we built again. Every launch rebuilt the same liquidity from scratch, and the bill grew with every chain and every partner.
To put rough numbers on it, the bare minimum for a new stablecoin is a pool with at least $5 million on each side. The main Curve pools for RLUSD, PYUSD and USDG today range from about $12 million (PYUSD/USDC) to $40 million (RLUSD/USDC). At a conservative 15% cost of capital, keeping one pool seeded costs $1.8 million to $6 million a year, assuming the issuer has the balance sheet to fund it. If you hand the job to a market maker, the cost of capital climbs to 20% to 30%, or $2.4 million to $12 million a year, and that’s for a single pair on a single chain.
Open USD’s five founding backers committed more than $1 billion to establish its liquidity. Smaller issuers tend to fund rewards in DeFi lending markets instead, which can grow supply quickly and shrink it just as quickly when the rewards taper. Neither approach lowers what holders pay to get in and out, and both hold up worse on a bad day, when everyone tries to move into the same few dollars at once and the pools between them run dry.
Solving stablecoin fragmentation with Transit
We incubated and spun out Paxos Labs around the idea that issuing a stablecoin was getting easier every year, while what you could do with it after issuance was increasingly becoming the bottleneck to growth.
Transit is the first thing we built to address it. It gives businesses one integration to move between stablecoins, pricing each conversion across onchain pools, market makers and issuer rails. Transit went live in July on Robinhood Chain. On Arbitrum it now lets traders, curators, LPs and treasury teams inside move into USDG directly. Over $300 million has moved through Transit since launch and given us further insight into the accelerating nature of this problem in the market.
A market where every new dollar starts from scratch needs more than better routes, and that’s what we’re building next. It also leaves a bigger question of what holds the market together when every asset has many tokenized versions.
More on that soon.