How does stablecoin onramp business work?
- Harvey
- Jul 15
- 4 min read
Updated: Jul 20
According to projections from Standard Chartered, BCG, and others, the stablecoin market is on track to reach $1T–$3T in the next five years. That’s $750B–$2.75T in fresh USD inflow waiting to be onboarded from fiat into stablecoins.
Now ask yourself:
What’s a great business to be in when that much money wants to move onchain?
One that takes a 2% fee on every transaction across that flow.
Welcome to the onramp game.
It’s no surprise then that fiat onramps have already birthed a wave of $100M+ companies like MoonPay, Ramp, and Transak. All profiting from enabling users to convert fiat into stablecoins with sleek, consumer-friendly UX.
But behind that polished frontend lies a tangled web of backend infrastructure: a full-stack operation that handles regulatory, financial, and technical complexity.
In this Weekly Research, we pull back the curtain and break down the 6-layer stack every stablecoin onramp must build to operate at scale:
Licensing & regulatory requirements
Card network access
KYC/AML enforcement
Treasury & liquidity management
Wallet & blockchain integration
Custody infrastructure
Let’s unpack each layer with a real-world example to show how it all fits together.
Case Study: How $100 Turns Into Stablecoins
Let’s say a user wants to buy $100 worth of stablecoins with a bank card via an onramp provider. Sounds simple, right?
Behind that frictionless user experience lies a 6-step operational stack. Each layer is packed with regulatory, financial, and technical complexity.
Here’s what it takes to make that transaction happen:
Licensing & Regulatory Requirements
The first hurdle is regulatory compliance: a non-negotiable for handling both fiat and crypto. And crypto regulations are jurisdiction-specific. This means depending where you want to serve your users, you need at least to acquire the appropriate local licenses.
To accept fiat payments, you need:
US: Money Transmitter License (state-by-state) or Money Transmitter License from FinCEN on a federal level
EU: Electronic Money Institution license
UK: Electronic Money Institution license
To sell/deliver stablecoins, you need:
US: Covered under MTL/MSB
EU: CASP license
UK: Cryptoasset registration
But acquiring a full suite of licenses is both time consuming and costly. That is why many onramps partner with licensed firms to avoid directly obtaining licenses one by one.
Note: special thanks to Mike Ringer, Co-Lead of the Crypto and Digital Assets Group at the law firm CMS London for insights and clarifications on this complex and nuanced subject.
Card Network Access
Licensing isn’t enough. You also need the technical and legal right to process payments. This means the right permission or membership from the card network to actually be able to accept a payment technologically.
To access Visa or Mastercard networks, you must either:
Become a direct member (only available to regulated banks, EMIs, large fintechs like PayPal). Yet becoming a direct Visa or Mastercard network member is a high-bar, resource-intensive process typically reserved for regulated financial institutions like banks, EMIs, and large fintechs such as Revolut, N26 and PayPal.
Partner with acquiring banks (e.g. Checkout.com, Stripe, Adyen) who are already network members. To become a partner with acquiring banks or payment processors, you need to go through a Merchant Onboarding process to get evaluated across regulatory risk, operational risk, financial risk, fraud risk and reputational risk metrics.
Once you have these licensing and regulatory requirements met, you then need to build out your operational processes.
KYC/AML Solution
As part of a regulated money transmitter’s compliance process, you are required to know your customers and screen for anti money laundering. However, building out a compliance team and KYC/AML process is no trivial investment. That is why many stablecoin startups partner with a third party vendor such as Sumsub or Onfido.
After getting the regulatory licenses, access to the card payment network, and setting up a KY/AML process, you are ready to actually deliver the stablecoin.
But where will you get the stablecoins from?
Treasury Management/ Liquidity Sourcing
Once payment is approved, you need to actually deliver $100 in stablecoins.
To deliver the actual 100 USD stablecoin, you either have:
- A pre-funded treasury of USDT/USDC etc on various chains OR
- A system to source the desired stablecoin from a liquidity providers such as a Centralized Exchange or an OTC desk
If you choose the pre-funded route, you need to have a system in place to anticipate liquidity needs on each chain, monitor and rebalance your stablecoin holdings across them.
If you choose the just-in-time route, you need to have API integrations in place to execute trades automatically to ensure timely delivery.
Wallet Integration
To avoid forcing users to go through the hurdles to set up their own wallets, many onramps offer built-in wallets.
Of course, building this infrastructure in-house is both capital intensive and time consuming. So many integrate with Wallet-as-a-Service providers such as Magic, Sequence or BitGo. These wallet-as-a-service providers enable onboarding via email/social login while abstracting away seed phrases.
Custody Infrastructure
But having a wallet is not enough as you also need a custody infrastructure to secure the private keys and enforce policy controls including spending limits and role-based access.
And so additional integrations with a custody solutions provider such as Fireblocks and Dfns is needed.
Bottom Line
Stablecoins may seem simple on the surface. But delivering them at scale, compliantly, and securely requires a deeply orchestrated backend stack. And this is just the onramp business.
With the upcoming passage of the GENIUS Act, stablecoin market growth is set to offer many opportunities to monetize different parts of the value chain. Yet different parts of the value chain require different processes to function. Understanding the nuanced details is key to successfully building a stablecoin business.
Now you know how stablecoin onramp business works. Want to understand what are the key jurisdictional differences for issuing stablecoins? Learn more here.
Disclaimer: This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
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