Last week was a defining moment for stablecoins.
Top CEOs from major U.S. financial institutions made bold statements about their stance on stablecoins, signaling a decisive shift in the industry:
Bank of America CEO, Brian Moynihan: "If regulators make that leap, we will enter the stablecoin business."
PayPal CEO, Alex Chriss: “With an estimated 20 to 60 million monthly active crypto users3, the potential for commerce is immense. For merchants, this means unlocking a new, engaged customer base without the volatility risk of directly accepting crypto.”
Stripe co-founders, Patrick and John Collison: "Stablecoins are the superconductors of financial services. They represent a new branch of the money tree."
With financial giants eyeing the stablecoin market, understanding its business models and adoption patterns is now more critical than ever.
Previously, I covered where stablecoin adoption is the biggest and growing the fastest across the globe. This week, we're shifting focus to the core business models driving stablecoin revenue.
At its core, the stablecoin business boils down to two primary monetization strategies:
Assets Under Management (AUM) Monetization
Money Flow Monetization
This Weekly Research will break down the three dominant AUM-based revenue models that drive profits in stablecoins:
Adoption by default
Incentivized adoption
High-risk, high-reward adoption
Let’s dive in.