The recent explosion of stablecoins wasn't due to a new financial innovation, but the maturation of underlying blockchain infrastructure. Cheaper and faster transactions on Layer 2 solutions and improved Layer 1s finally made large-scale, low-cost payments practical for real-world use.

Instead of funding another stablecoin protocol, the more viable investment is in the tooling layer. This includes payment systems, SDKs, and accounting software (like triple-entry bookkeeping) that enable small businesses globally to integrate stablecoin payments into their existing fiat workflows.

Tether, described as a "0/100 hedge fund," is unlikely to start paying yield to users. Its entrenched network effects in the crypto trading ecosystem—its original and still dominant use case—are so strong that it doesn't need to compete on yield to maintain its market position.

The acquisition of crypto on-ramp Bridge by payment giant Stripe served as a credible signal to the market. It forced competitors to pay immediate attention and treat stablecoin infrastructure as a critical area for investment, arguably triggering the subsequent flurry of institutional activity.

The stablecoin market is mature, so new entrants cannot compete on technology alone. To succeed, they must be launched by an entity with a massive built-in user base, such as a social media giant or a large multinational, making standalone stablecoin startups effectively zeros.

By embedding stablecoin wallets, companies can move beyond simple payouts. They can maintain an ongoing financial relationship, offering services like savings or credit directly to their user base (e.g., drivers, creators). This effectively allows any platform to build its own neobanking arm.

Before stablecoins, launching financial services in N countries required N² unique integrations. Now, companies can build on a single dollar-stablecoin standard and instantly operate globally. Adding other local stablecoins becomes a simple N-style addition, radically simplifying global expansion.

The primary strategic reason for a large platform to issue its own stablecoin isn't just yield, but control. Relying on an external stablecoin creates platform dependency, making the business vulnerable to changes in fees or strategy, much like Zynga's reliance on the Facebook platform.

Stablecoins will likely enter the US market not through domestic retail payments, but via international network effects, similar to WhatsApp. Initial US users will be those interacting with the global economy, and adoption will spread inward as these cross-border connections become more common.