The Stablecoin Playbook for Fintech Builders

This report was created to help product builders, fintech teams, and developers understand how to navigate the stablecoin landscape with clarity and confidence. It breaks down the mechanics of stablecoins, the infrastructure required to use them, and the regulatory context shaping their future. Whether you’re exploring payments, remittances, or neobank products, this guide offers practical insights to help you go from idea to launch.

Key Takeaways from This Report

1. Stablecoins are no longer just for crypto-native users. They are now powering global payroll, consumer payments, savings tools, neobank platforms, and more. This is across emerging markets and enterprise products: payroll, B2B payments, remittances, savings tools, consumer payments, and liquidity provision.
   
2. The issuer, token design, and underlying chain define how your product functions. Choosing wisely reduces technical, regulatory, and reputational risk, while also building a strong foundation of trust with users, partners, and regulators.
   
3. Blockchain rails offer advantages over traditional systems in key areas. Settlement times, 24/7 availability, and sub-cent transaction costs enable use cases that ACH, SWIFT, or card networks can’t match.
   
4. Regulatory clarity is improving fast across major jurisdictions. In the U.S., the recently signed GENIUS Act establishes foundational standards for stablecoin oversight. Meanwhile, frameworks like MiCA in the EU continue to set clear guidelines for compliance across the sector.
   
5. Launching a stablecoin app or feature set is no longer a massive lift. Modular tools like Dynamic’s Stablecoin Accounts eliminate the need to piece together wallets, KYC, on-ramps, and blockchain integrations manually, allowing you to launch in days, not months.
   

Why Stablecoins Are the Fintech Opportunity of the Century

The global financial system is undergoing a foundational shift. For decades, innovation in fintech has largely meant new interfaces on top of legacy infrastructure. But stablecoins are different. They rewrite the rails themselves.

By combining the programmability of crypto with the price stability of fiat currency, stablecoins are unlocking new financial primitives that weren’t possible before. These include instant global settlement, embedded compliance, composable payouts, and money that moves at the speed of software.

At Dynamic, we’ve had conversations with hundreds of fintech teams, founders, and developers. The message is consistent. We hear that teams want to build with stablecoins but are held back by fragmented tooling, regulatory uncertainty, or a lack of clarity on where to begin. Our mission is to change that, to help teams abstract the complexity, and launch faster.

Breaking Down Stablecoins and Why They Matter

What is a Stablecoin?

A stablecoin is a type of cryptocurrency that is designed to maintain a stable value by being pegged to a traditional asset like the U.S. dollar, euro, or even commodities such as gold. This makes them unique in the crypto ecosystem, where most assets are known for high volatility.

Depending on the approach, stablecoins may use reserves, collateral, or algorithmic mechanisms to maintain that peg. This stability makes them useful for global payments, savings, payroll, and more. In summary, they bring together the speed and openness of crypto with the reliability of fiat money.

Breaking it down further, there are four primary types of stablecoins:

1. Fiat-backed stablecoins are backed 1:1 by reserves of traditional currency held in banks. Each unit of the stablecoin can be redeemed for a corresponding amount of fiat currency, such as U.S. dollars or euros.
2. Crypto-backed stablecoins use other cryptocurrencies as collateral and are managed through smart contracts. These are typically overcollateralized to account for the volatility of the underlying assets.
3. Commodity-backed stablecoins are pegged to the value of physical assets like gold or silver. Each token typically represents ownership of a specific quantity of the underlying commodity, which is held in reserve by a trusted custodian.
4. Algorithmic stablecoins rely on algorithms and smart contracts to automatically manage the supply of the stablecoin and keep its value pegged to a target. These carry higher risk and, in the past, have lost their peg to the target value.

Fiat-backed	Crypto-backed	Commodity-backed	Algorithmic
USDC	DAI	PAXG	FRAX
USDT	LUSD	XAUT	USDD

Comparing Crypto vs. Traditional Payment Rails

Overview of Traditional Payment Rails

Traditional payment rails include familiar systems like:

• SWIFT: Used for international bank-to-bank transfers.
• ACH: The Automated Clearing House network, used for domestic payments in the U.S.
• Credit and debit card networks: Powered by intermediaries like Visa and Mastercard.
• Wire transfers: Bank-initiated payments typically used for large, one-time transfers.

The greatest strength of these legacy systems is that virtually every consumer and business knows how to use them. They also offer built-in protections and operate within mature regulatory frameworks with clear standards for compliance, identity verification, and anti-money laundering.

However, these strengths are counterbalanced by real limitations. Settlement times can stretch from one to five business days, and costs can be significant, especially for cross-border transactions or credit card processing. Most notably, traditional payment systems depend on a chain of intermediaries, all of which contribute to added friction, higher costs, and greater risk of failure.

Overview of Crypto Payment Rails

Crypto payment rails run on blockchain networks like Ethereum, Solana, Base, and others. These systems are peer-to-peer by design, with stablecoins acting as a medium of exchange that takes full advantage of blockchain’s speed and low cost. Instead of routing through banks or processors, users send funds directly to each other’s wallet addresses.

This model enables self-custody, where individuals fully control their assets instead of relying on third parties. Transfers also follow standardized token protocols, enabling assets to move seamlessly across apps and services. Due to these systems being programmable, payments can incorporate onchain logic, such as triggering subscriptions, unlocking gated content, or integrating with broader decentralized workflows.

The benefits that crypto payment rails offer are compelling:

• Speed: Transactions settle with finality in seconds and the network operates 24/7, including weekends and holidays.
• Low cost: Global transfers often incur minimal fees, typically just a fraction of a cent.
• No intermediaries: Funds can move freely across borders without reliance on banks, currency conversions, or intermediaries.
• Programmability: Payments can trigger automated outcomes, such as distributing rewards or executing smart contracts.
  

A Side-by-Side Comparison

	Traditional Payment Rails	Blockchain Rails
Speed	1 to 5 business days	Near-instant (often seconds)
Cost	0.5 to 3% + FX/intermediary fees	Network gas fees (often <$0.01)
Availability	Normal business hours	24/7/365
Intermediaries	Banks, PSPs, networks	None (peer-to-peer)
Programmability	Low	High through smart contracts
Regulation	Mature and well-defined	Evolving, jurisdiction-dependent

Key Use Cases Where Stablecoins Excel

Despite the dominance of legacy systems, crypto stands out for several key use cases:

• Cross-border payments: Crypto removes the delays and fees typically involved in international transfers. A stablecoin transaction can move funds globally in seconds, without relying on banks or incurring foreign exchange spreads.
• Real-time settlements: Merchants, creators, and businesses can receive payments instantly, with no need to wait days for clearing or payout cycles.
• Micropayments: Crypto makes entirely new economic models possible, including pay-per-second access to content or services.
• Tokenized access: Payments can include built-in logic that unlocks digital goods, memberships, or gated features in a single transaction.
• Interopability with other apps: Payments can trigger additional onchain actions such as lending, swapping, or governance, making them part of a more integrated ecosystem.

Who’s Issuing Stablecoins and Why You Should Care

A stablecoin issuer is the entity responsible for minting new tokens, managing the reserves that back those tokens, and ensuring they can be redeemed for their underlying collateral. Issuers also set the rules that govern how the stablecoin interacts with users, partners, and regulators. In short, the issuer is the bridge between the world of blockchain and the world of traditional finance. And not all bridges are built the same.

The choices an issuer makes can directly affect a stablecoin’s stability and trustworthiness. These choices include how it holds collateral, manages redemptions, undergoes audits, and approaches regulatory compliance. In other words, a stablecoin is only as strong as the entity behind it. That’s why it’s essential to look closely at the types of issuers that exist and understand the trade-offs each model brings.

Why the Issuer Matters

Understanding who issues a stablecoin is fundamental to evaluating its safety and reliability. The issuer’s identity should also shape how you use or integrate that stablecoin.

• Trust starts with transparency: An issuer’s willingness to publish reserve data, undergo audits, and engage with regulators directly affects user trust.
• Redemption and liquidity are defined by design: The issuer sets the rules for how and when users can convert stablecoins to fiat. Key factors include whether redemptions are truly 1:1, if there are fees or delays, and how transparent the process is.
• Regulatory standing shapes staying power: Issuers that work closely with regulators are more likely to remain operational during times of scrutiny, while those operating in legal gray zones face ongoing risk of crackdowns or delistings.
• Decentralization determines who holds control: Native crypto users prioritize stablecoins that cannot be frozen, blacklisted, or shut down by a single authority.
• Stablecoin utility is governed by the issuer: Issuers choose which blockchains to support, what kind of APIs to expose, and how compatible their assets are with the broader crypto ecosystem.

The Real-World Applications of Stablecoins

What Can Stablecoins Be Used For?

Stablecoins reflect a shift in how money moves: more global, more programmable, and more accessible. From streamlining cross-border payments to unlocking liquidity in DeFi, stablecoins are driving innovation across finance and payments. Here are some of the most popular ways they’re being used today:

Enabling Fast, Global Payments

Stablecoins are transforming cross-border payments. Unlike traditional remittance systems, which can take days and charge up to 10% in fees, stablecoin transfers settle in seconds and cost only a few cents. They’re especially useful in regions with unstable currencies or limited banking infrastructure, allowing users to send or receive funds without needing a bank account. Their transparency also makes them ideal for peer-to-peer giving, humanitarian aid, and community fundraisers, ensuring funds are traceable and stable.

Payroll and Contractor Payouts

Businesses are increasingly turning to stablecoins to pay employees, freelancers, and contractors, especially in global or remote workforces. Payments are quick, cost-effective, and currency conversion is often unnecessary. Programmable smart contracts enable advanced features like recurring payments or real-time salary streaming, and recipients can avoid local currency devaluation by holding funds in digital dollars.

Powering Yield and Liquidity in DeFi

Within decentralized finance (DeFi), stablecoins are foundational. Users deploy them to earn interest through lending protocols, provide liquidity on decentralized exchanges, access tokenized real-world assets, and optimize returns with yield aggregators. Their price stability makes them a dependable tool for navigating volatile crypto markets while still participating in complex onchain strategies.

Unlocking Liquidity Without Selling

Stablecoins play a key role in crypto borrowing models. Users can deposit them as collateral to access other tokens or borrow stablecoins against volatile assets like ETH or SOL. This flexibility allows participants to stay invested while funding new opportunities, paying expenses, or bridging short-term liquidity needs, all without liquidating their portfolios.

Connecting Crypto to TradFi

Stablecoins act as a bridge between the crypto world and traditional banking systems. Users can easily convert them to local currencies through exchanges like Coinbase or Binance, off-ramp services such as MoonPay, or even crypto ATMs and peer-to-peer marketplaces. This ability to “cash out” quickly and reliably makes stablecoins a critical on/off ramp for many users globally.

Transfers Across Wallets and Platforms

Whether moving funds between wallets, trading platforms, or across chains like Ethereum and Solana, stablecoins offer speed, affordability, and interoperability. They’re ideal for sending money to friends and family, bridging assets, or transferring value within both centralized and decentralized ecosystems.

Everyday Spending

Stablecoin-powered debit cards are gaining traction, making it easy to spend digital dollars in everyday life. Platforms like Rain let users load cards with stablecoins and make purchases anywhere Visa or Mastercard is accepted, earning cashback or crypto rewards along the way. This blend of crypto-native assets with familiar payment methods brings real-world utility to stablecoins.

Use Case Example 1: Cross-Border Payments & Remittances

Cross-border payments are notoriously inefficient. Transactions take days to settle, incur high fees, and often pass through multiple intermediaries before reaching the recipient. Crypto offers a cleaner alternative for payments and settlement built on stablecoins and smart contracts. This is especially important for recipients who live in underbanked or unbanked regions.

For both senders and recipients, stablecoins provide:

1. Instant and open access to money movement without intermediaries
2. Interoperability across blockchains such as Ethereum and Solana
3. User ownership through private keys and non-custodial wallets
4. 24/7 availability with no dependency on bank operating hours
5. Low costs for global transfers

Use Case Example 2: Neobanks

Instead of relying on slow-moving legacy infrastructure, neobanks are using APIs, smart contracts, and programmable logic to deliver modern banking experiences. Underneath it all, stablecoins and wallets are powering everything from onboarding to off-ramps.

This shift is especially important for users in emerging markets, remote workforces, or unbanked populations. With stablecoins and embedded wallets, neobanks can offer instant access to digital dollars, support around-the-clock transactions, and reduce reliance on traditional financial intermediaries.

For modern neobanks and their users, stablecoins unlock:

1. 24/7 access to digital dollars that are stable, global, and not tied to local banking infrastructure
2. Frictionless cross-border transfers with near-instant settlement and minimal fees
3. A programmable currency layer that supports features like automated rewards or smart contract-based savings
4. Trusted value storage in markets with inflationary or volatile local currencies
5. Seamless integration with on-ramps and off-ramps, making it easy to move between stablecoins and fiat currencies

Use Case Example 3: Payroll Companies

Paying workers across borders has always been slow, expensive, and fragmented. Traditional payroll providers often rely on intermediaries and correspondent banking, leading to delays, unnecessary fees, and complications with currency conversion. Stablecoins streamline this process, allowing companies to send payments in seconds at a fraction of the cost.

For payroll companies and their clients, stablecoins enable:

1. Instant settlement of salaries and contractor payouts, regardless of geography.
2. Lower transaction costs compared to wires, ACH, or SWIFT transfers.
3. Currency stability, protecting workers in volatile economies from local devaluation.
4. Programmable payments, enabling recurring salaries and milestone-based releases.
5. Integration with wallets, where recipients can spend directly, off-ramp to local fiat, or earn yield on idle balances.

The model is especially powerful for global-first companies with distributed teams. Instead of relying on a patchwork of bank accounts and intermediaries, payroll providers can embed stablecoin infrastructure directly into their platforms. The result is lower overhead, greater transparency, and quicker access to earnings for workers anywhere in the world.

Use Case Example 4: Institutional Treasury Management

Large institutions face constant challenges in managing liquidity across multiple markets, currencies, and entities. Traditional treasury operations rely on banking rails that are fragmented, expensive, and restricted by geography or time zones. Stablecoins offer a more efficient and programmable foundation for global treasury management.

For institutions, stablecoins unlock:

1. 24/7 liquidity management, eliminating cut-off times and weekend delays.
2. Faster settlement across subsidiaries, reducing trapped capital in local accounts.
3. Programmable treasury operations, such as automated cash sweeps or pre-scheduled payments.
4. Diversification into digital dollars, reducing exposure to weaker local currencies.
5. Integration with DeFi, where idle balances can earn yield in secure protocols.

By holding stablecoins alongside traditional assets, treasury teams gain flexibility without abandoning compliance or risk frameworks. Stablecoins can be deployed globally in minutes, rebalanced across entities, or used to hedge exposure to volatile local markets.

How Ramp is Experimenting with Stablecoins

Ramp’s core mission is to save companies time and money, and stablecoins are becoming a promising part of that equation. The team first began experimenting with stablecoins to improve international money movement, where traditional rails are too slow and expensive. However,  Ramp’s experimentation goes beyond just payments.

The company sees potential in using stablecoins for treasury management, especially when managing balances across multiple currencies and jurisdictions. As a global company with corporate card programs and vendor payments in multiple countries, Ramp faces many of the same liquidity challenges as its customers. They see stablecoins as a tool to optimize cross-border liquidity and reduce complexity in global operations.

Ramp is also exploring stablecoin-backed card products as a way to serve customers in emerging markets who face limited access to the U.S. financial system. By embedding stablecoins into spendable card experiences, Ramp hopes to unlock new forms of financial utility for underserved business users.

Ramp takes a pragmatic approach, evaluating each stablecoin use case on its own merits and experimenting where the value is clear. Their stance reflects a broader trend among fintech innovators: stablecoins aren’t a silver bullet, but they’re becoming a serious part of the modern financial toolkit.

Capturing Yield in a Tokenized World

Yield is what turns stablecoins from passive tools into active financial infrastructure. For users, it introduces the possibility of earning on their balance without volatility. For builders, it creates new opportunities to retain users, monetize wallets, and design programmable flows around rewards and savings.

As demand grows for yield-bearing assets, stablecoins are becoming the default vehicle for accessible yield at global scale. Yield is also a powerful equalizer.

In markets where traditional banks offer little to no interest or where local currency devaluation erodes value, stablecoin yield provides a reliable alternative. It gives anyone with an internet connection the ability to earn interest or rewards, no matter where they live or how much they earn. For many, this is not just a product feature, it’s a lifeline.

Why Yield is Important

In traditional finance, yield is often reserved for institutions, wrapped in jargon, or hidden behind layers of fees. Whereas in crypto, yield is built into the rails. That changes how builders design experiences and how users think about their money. Stablecoin yield turns holding a balance into a behavior with purpose. It encourages users to stay engaged and aligns the user and the product around shared upside.

• For fintech apps and neobanks: Yield creates a way to differentiate in a crowded field. Rather than competing on UX alone, teams can embed real economic value into the product, giving users a savings tool and a reason to return.
• For developers: Yield is programmable infrastructure. It can be tokenized, shared, redirected, or used to trigger additional actions onchain. It shifts value creation from static storage to dynamic motion.
• For users in emerging markets: Stablecoin yield is especially powerful. It offers a buffer against inflation, an alternative to unstable local banks, and a portable way to build financial resilience.
• For other users: Yield turns stablecoins into a smarter way to hold cash. Instead of letting funds sit idle in traditional checking accounts with near-zero interest, users can passively earn without taking on volatility or jumping through hoops.

The Ways that Users Generate Yield on Stablecoins

Stablecoins unlock access to yield in a number of ways, depending on the user’s goals, risk appetite, and the platform they’re using. These methods range from permissionless DeFi tools to embedded solutions integrated directly into apps.

Common methods include:

1. Supplying stablecoins to lending protocols like Aave
2. Providing liquidity to decentralized exchanges or stable swap pools
3. Participating in tokenized real-world asset (RWA) markets, such as short-term treasuries
4. Using yield-bearing stablecoins that automatically accrue value
5. Opting into fintech apps that embed yield behind familiar interfaces like Superform

Each of these approaches comes with its own set of trade-offs, including risk exposure, liquidity constraints, regulatory implications, and technical complexity. Users and developers should evaluate what makes sense for their audience and use case. While these are some of the most common strategies, there’s a growing number of new mechanisms being developed.

Licensing, Compliance, and Regulation in 2025

Why Stablecoins Need Regulation

Stablecoins have established themselves as a fast and programmable alternative to traditional money, but they’re still operating in a regulatory gray zone. This has prompted policymakers to explore how existing financial rules should apply and where new frameworks are needed.

Here are the key reasons that regulation around stablecoins is important:

• Financial stability: Global regulators are concerned that unregulated stablecoins could weaken local currencies, disrupt monetary policy, or create financial instability in a crisis. By operating outside existing financial frameworks, stablecoins could introduce unforeseen systemic risks. To counter this, frameworks like the EU’s MiCA impose usage limits and supervisory oversight.
• Anti-money laundering and consumer protection: Because stablecoins can move quickly and across borders without intermediaries, they can slip through the cracks of traditional compliance systems. To reduce these risks, regulators require stablecoin issuers and platforms to follow anti-money laundering (AML) and know-your-customer (KYC) rules, just like banks and payment processors.
• Reserve backing and redemption assurance: Stablecoin users need confidence that their tokens can be redeemed at full value at any time. To support this, regulations require issuers to maintain one-to-one reserve backing, offer clear redemption rights, and publish regular attestations.

Key Global Regulatory Jurisdictions

United States

Instead of a unified law, stablecoins in the U.S. are regulated through a mix of state and federal rules:

• Federal oversight: The recently signed GENIUS Act establishes a national framework for stablecoins. It requires issuers to maintain 1:1 fiat reserves held in high-quality liquid assets, undergo regular independent audits, and comply with operational and disclosure standards. The law allows both state and federally-chartered institutions to issue stablecoins, creating long-awaited clarity on licensing pathways.
• FinCEN compliance: Under the Bank Secrecy Act, stablecoin operators must register as Money Services Businesses (MSBs) and comply with anti-money laundering (AML) programs.
• State-level regulations: New York requires stablecoin issuers to be licensed or chartered by the NYDFS, maintain liquid and segregated reserves, and submit monthly attestations from independent auditors. Most other states apply money transmitter laws, though many are calling for federal preemption.

European Union (EU)

The EU is ahead of the curve with its Markets in Crypto-Assets (MiCA) regulation, which was passed in 2023. As of June 2024, the rules for stablecoins officially took effect, introducing two key categories: Electronic Money Tokens (EMTs), pegged to a fiat currency, and Asset-Referenced Tokens (ARTs), backed by a basket of assets like commodities.

Here’s how MiCA treats each category under its new framework:

1. EMTs must be issued by authorized Electronic Money Institutions (EMIs) or credit institutions and fully backed 1:1 by reserves, with 30 to 60% held in segregated bank accounts. They must offer par-value redemption at all times, prohibit interest payments, and submit detailed whitepapers to national regulators.
2. ARTs face stricter oversight under MiCA. Issuers must guarantee perpetual redemption rights, demonstrate liquidity and custody of underlying assets, provide detailed disclosures, and comply with trading volume caps.

United Kingdom (UK)

The UK’s crypto regulatory framework has recently entered phase 2. Building on the initial rules for fiat-backed stablecoins, the government introduced expanded legislation in April 2025. Here’s where the framework currently stands:

1. Crypto asset service providers must be authorized by the Financial Conduct Authority (FCA) to operate trading platforms, issue stablecoins, safeguard digital assets, facilitate trading or lending, and provide staking services. Foreign firms are also subject to UK rules if they serve UK retail customers.
2. Stablecoin issuers and custodians are still required to comply with Phase 1 requirements, including 1:1 backing with liquid reserves, FCA registration, asset segregation, and detailed recordkeeping.
3. Stablecoin transactions are divided into hybrid and pure types. Hybrids use traditional rails for on and off-ramps (fiat in, stablecoin out), while pure onchain payments are governed by modified payment services regulations requiring disclosures and execution timelines.
4. Foreign-issued stablecoins are permitted, as long as UK-based firms can show they comply with local regulatory standards.

Asia-Pacific

Asia is quickly becoming a key driver of stablecoin and digital asset regulation across several markets:

• Japan requires issuers to be licensed entities such as banks or trust companies. All stablecoins must be fully backed by reserves on a 1:1 basis, and algorithmic stablecoins are explicitly prohibited.
• Singapore mandates that stablecoins be fully backed by reserves, subject to daily liquidity management and redemption guarantees. Issuers also need strong risk controls and must regularly share updates, following guidance from the Monetary Authority of Singapore (MAS).
• Hong Kong’s new stablecoin rules are a work in progress, but will require issuers to be based locally and meet standards for reserve transparency and risk management.

The Stablecoin Payments Tech Stack

Stablecoins: The Medium of Exchange

Stablecoins are the digital funds users send, receive, and hold. They are pegged to traditional currencies or other assets and serve as the foundation of any blockchain-based payment system. In the most common model, a user deposits a real-world dollar with an issuer and receives a digital dollar that is redeemable 1:1 at any time. This backing mechanism helps maintain price stability and user trust.

Each stablecoin has different attributes, including how it’s backed, who issues it, and which networks it operates on. Some prioritize regulatory clarity and transparency, while others are built for decentralization or cross-chain accessibility.

Blockchain Networks: The Payment Rails

Every stablecoin transaction takes place on a blockchain network. These networks function as the infrastructure layer that records and moves funds. Blockchains are permissionless, transparent, and operate without reliance on centralized intermediaries.

Different blockchains offer different trade-offs in terms of cost, speed, security, and decentralization. Most stablecoins are available on more than one chain, giving you the flexibility to choose one or support multiple depending on your product needs.

Wallet Infrastructure: How Users Store and Use Funds

Wallets give users control over their stablecoins and act as the core authentication layer for onchain activity. They enable sending, receiving, and verifying ownership of funds. For developers, wallets also handle identity, transaction signing, and secure key management behind the scenes. A well-integrated wallet experience builds user trust, reduces friction, and enables seamless interaction with stablecoin flows.

Why Dynamic’s TSS-MPC Stands Above the Rest

With TSS-MPC, a full private key never exists, as the key is generated and used in a distributed manner, ensuring no single point of failure. Each key share is held by a different party, and signing requires collaboration across parties.

Unlike models that rely on a fully reconstructed key or isolated hardware environments, this significantly reduces the risk of compromise associated with centralized key storage or execution environments.

Characteristic	Comparison
Distributed Signing	Dynamic’s model supports fully distributed signing across parties, without centralized coordination. This enables robust multi-operator configurations and allows wallet security to scale with infrastructure. In contrast, Shamir and TEE-only models do not offer true distributed signing, making them more brittle in adversarial conditions.
Threshold Support	Dynamic’s TSS-MPC supports flexible threshold setups, such as 2-of-3 or 3-of-5, enabling highly customizable recovery and signing policies. While Shamir Secret Sharing offers some threshold capabilities, it’s more limited and lacks composability for distributed protocols. TEE-based models typically lack native threshold support altogether.
Key Resharing	Thresholds can also be adapted over time without needing to regenerate the entire key structure. This enables real-time key rotation and enhances long-term security practices by reducing key staleness and exposure risk. This is critical for teams operating in production environments, where downtime or full key regeneration introduces operational risk. Shamir Secret Sharing and TEE-based models lack this capability entirely.
Sub-Second Signing	Dynamic’s TSS-MPC model delivers sub-second signing, making the experience feel fast and responsive for end-users. This is significantly faster than legacy MPC setups, which often take 5 to 10 seconds per operation. TEE-based systems are fast locally, but they sacrifice resilience by relying on centralized key storage.
Key and Account Recovery	With Dynamic’s TSS-MPC, account recovery is possible as long as the threshold is met. There’s no need for seed phrases or centralized backups. Shamir Secret Sharing offers similar functionality. In contrast, TEE-only systems risk complete key loss if the secure enclave is compromised or lost.
Regulatory Comfort and Auditability	Distributed trust models like Dynamic’s TSS-MPC offer clearer regulatory positioning by avoiding custody and reducing central control. TEE-only models raise concerns, as the full private key is stored on a single server, increasing custodial risk. TSS-MPC also supports transparent access policies and verifiable signing workflows, making it easier to meet audit requirements and align with evolving compliance standards across jurisdictions.
Pairing TSS-MPC with TEEs	While TEEs alone open your platform up to vulnerabilities such as single-point compromise, firmware exploits, or physical access attacks, combining them with TSS-MPC mitigates these risks through distributed trust. This hybrid approach allows us to benefit from TEE speed without inheriting TEE-only risks.

Payment Processing: Moving Funds Between Users

To send or receive stablecoins, your system needs to process blockchain transactions. This involves creating, signing, and broadcasting payments, as well as listening for confirmations.

You can use custodial services, non-custodial SDKs, or direct blockchain integrations depending on your needs. Many teams combine these approaches to optimize for both user experience and developer control.

On-Ramps and Off-Ramps: Converting Between Fiat and Stablecoins

Stablecoin products often need to support the flow of funds between crypto and traditional money.

On-ramps let users buy stablecoins with fiat, while off-ramps allow them to cash out. These services can be embedded into your app and typically handle compliance requirements such as ID verification and payment processing. They are especially useful when targeting users who are not already familiar with crypto.

Compliance Infrastructure: Meeting Regulatory Requirements

Handling stablecoin payments may trigger financial regulations. Your stack should be prepared to support identity verification, monitor for suspicious activity, and stay aligned with licensing requirements.

KYC, AML, and money transmission rules vary by region, and many service providers offer built-in tools to help with compliance. As regulation evolves, this layer will remain important for long-term success.

Crypto Cards: Spend Crypto without the Extra Steps

Crypto cards convert stablecoins to fiat at the point of sale, allowing users to shop online or in-store just like with a traditional card.

For developers, integrating with card providers can unlock new utility and make stablecoins more accessible to mainstream users. The best programs offer fast settlement, global coverage, and customizable user experiences without requiring users to navigate exchanges.

Onchain FX: Converting Stablecoins into Local Currency

Cross-border payments don’t end with receiving stablecoins, they often need to be converted into local fiat currencies. This is where foreign exchange (FX) comes in. FX infrastructure determines how efficiently and affordably you can turn a digital dollar into Argentine pesos, Nigerian naira, or other currencies across the globe.

The challenge lies in accessing competitive exchange rates, especially in markets with low liquidity or high volatility. If your FX partner offers poor rates or adds hidden spreads, your users or business partners may bear significant costs.

Some providers specialize in optimizing this layer by aggregating local FX sources or tapping into onchain liquidity through market makers. Others offer mid-market FX rates plus a small spread, ensuring more predictable costs.

Key Security Considerations in Stablecoins

Custody Models: Custodial vs. Non-Custodial

Stablecoins rest on two foundations: the tokens themselves, and the custody models that determine how they’re stored and managed. Different custody approaches balance ease of use against control, and convenience against resilience. At the core, this trade-off comes down to two main models: custodial and non-custodial.

	Custodial	Non-Custodial
Key Ownership	Held by third party	Held directly by user
User Experience	Familiar, centralized, recovery options	Higher learning curve, improving tools
Integration	Connected to banks, financial services	Native to crypto ecosystems
Risks	Counterparty risk, insolvency, hacks	User error, lost keys
Security Model	Centralized, single point of failure	Decentralized, distributed responsibility
Resilience	Dependent on custodian’s stability	Independent, but user-dependent

Structural Risks to Be Aware of

Stablecoins rely on layers of infrastructure beyond the tokens themselves. At their core, they are smart contracts deployed on blockchains. This design delivers programmability and efficiency, but also concentrates risk in code. Developers and institutions must weigh not just the token itself, but the broader ecosystem and infrastructure in which it operates.

The vulnerabilities can be grouped into several categories:

• Code risk: Bugs or exploits in smart contracts can trigger massive exploits. Audits and formal verification are essential safeguards.
• Ecosystem dependencies: Stablecoins interact with DeFi, bridges, exchanges, and wallets, each introducing new attack surfaces.
• Network-level risks: Congestion, MEV, and validator incentives can all affect the stability and reliability of payments.
• Governance risk: Protocol decisions, upgrades, or changes in collateral management can alter a stablecoin’s security profile.
• Regulatory risk: Shifting rules and enforcement actions may impact issuance, redemption, or integration in financial systems.
• Operational risk: Failures in oracles, multisigs, or key management processes can compromise stability.

User Security and Best Practices

Even the strongest infrastructure can fail if users do not adopt secure behaviors. Stablecoin security extends beyond protocols and wallets into the daily practices of individuals and organizations. To stay secure, users should follow these best practices:

• Protect private keys: Use hardware wallets, maintain secure backups, and store private keys safely.
• Stay alert to phishing: Watch for fake apps, fraudulent websites, and malicious links. Always navigate to the project’s site from their official links.
• Enable multi-factor authentication (2FA): Add extra security measures such as MFA and passkeys.
• Review every transaction: Double-check amounts, recipients, and fees before signing. Features like simulated previews provide an extra safeguard, and you can also send a test transaction.
• Keep learning: As the ecosystem evolves, attackers adapt. Ongoing education from platforms and institutions helps users stay safe.

The Rise of Stablecoin Chains

Up until now, stablecoins have primarily lived on general-purpose blockchains such as Ethereum, Solana, and Tron. These networks helped drive early adoption but were never built with stablecoins at their core. As stablecoins evolve from a trader’s hedge into a tool for payments, savings, and business finance, this mismatch between user needs and underlying infrastructure has become harder to ignore.

That gap has sparked the rise of a new category called stablecoin-specific blockchains. These emerging networks are designed from the ground up to handle the scale, compliance, and cost requirements of global money movement. Their goals are clear: instant settlement, stablecoin-denominated gas fees, selective privacy for businesses, and interoperability with both traditional finance and other blockchain ecosystems.

The infrastructure that underpins stablecoin growth will not just support faster payments but could redefine the foundation of digital money itself. A successful stablecoin chain will not be “just another Layer 1.” It aims to become foundational financial infrastructure, offering payment experiences on par with or better than networks like SWIFT, Visa, and Mastercard.

What Defines a Stablecoin Chain

A growing set of contenders has entered this space, each with distinct design trade-offs and institutional backers. While their strategies differ, with some emphasizing gasless transfers and others prioritizing compliance-first architecture, they share a common goal: to shape the future of stablecoin infrastructure.

• Stable: A companion network for USDT, engineered exclusively for USDT transfers and enterprise-grade throughput.
• Plasma: Backed by USDT0 and Bitfinex, pursuing deep integration with Tether while building a native Bitcoin bridge and EVM equivalence.
• Codex: A USDC-focused L2 leveraging Ethereum security, designed for institutional settlement and enterprise compliance.
• Arc: Circle’s proprietary USDC chain, integrating directly with Circle’s product suite and traditional finance ecosystem.
• 1Money: A payments-only chain aiming for sub-second finality with a blockless consensus model.

Where Stablecoin Chains Excel

Despite the dominance of legacy systems, crypto stands out for several key use cases:

• Cheap and Predictable Transaction Fees: Transfers must feel as simple and transparent as sending a message. True zero-fee or stablecoin-denominated gas models are essential to drive mass adoption.
• Instant Finality: Waiting hours or even minutes for settlement undermines the promise of programmable money. Stablecoin chains aim for sub-second finality, enabling use cases like real-time payroll and instant e-commerce settlement.
• Traditional Finance Integration: Direct bank links, card rails, ACH, and wire transfer support ensure that stablecoins can bridge smoothly between legacy systems and the onchain world.
• Compliant Confidential Transactions: Payments require privacy, but not anonymity. Stablecoin chains must deliver selective disclosure, while still satisfying KYC/AML requirements.
• Cross-Chain Interoperability: Fragmentation remains one of crypto’s biggest hurdles. Winning chains will enable stablecoins to flow seamlessly between ecosystems, preventing liquidity silos and ensuring access to applications across Ethereum, Solana, and beyond.
• Developer Experience: Attracting developers is crucial. Comprehensive SDKs, APIs, and liquidity incentives will determine whether a chain becomes a thriving hub or a ghost network.
• Enterprise-Grade Infrastructure: Performance guarantees, dedicated blockspace, and compliance features are non-negotiable for institutional adoption.

Privacy as a Pillar of Stablecoin Infrastructure

In today’s public by default blockchains, every transfer, balance, and interaction is visible to anyone who knows where to look. That level of transparency works well for traders and DeFi protocols, but it introduces major challenges for businesses, payroll providers, and institutions that need to keep sensitive financial data private.

Privacy-preserving blockchains such as the Aleo Network are working to solve this problem using advanced cryptography such as zero-knowledge proofs. Their aim is to enable selective disclosure, allowing transactions to be private by default while still verifiable for compliance, audits, and regulators. This approach could make stablecoins viable for a broader range of real-world financial use cases, from corporate treasury management to consumer payments.

For stablecoin issuers and developers, privacy preserving chains could be the missing piece of the infrastructure puzzle. They unlock new workflows such as payroll can run without exposing salaries, merchants can settle transactions without revealing competitive data, and institutions can manage cross-border capital flows without leaking sensitive strategies. As the stablecoin market grows, privacy will likely shift from a “nice to have” to a baseline requirement. The projects that succeed will be the ones that make private payments both seamless and compliant.

How to Launch a Stablecoin-Powered App or Feature Set

You’ve seen what stablecoins can do, from powering global payments to enabling programmable finance across neobanks, DeFi platforms, and remittance apps. But knowing what’s possible is only the first step. For most teams, the hard part is execution.

After speaking with over 100 fintech builders, one thing became clear: teams want to build with stablecoins but feel overwhelmed by the complexity. From stitching together wallets, compliance tools, and on-ramps, to supporting global users at scale, the barrier to entry remains high. This is why we created Stablecoin Accounts.

Stablecoin Accounts are the fastest way to launch a wallet-based app with stablecoin support. Whether you’re building a neobank, trading platform, payroll tool, or remittance service, Stablecoin Accounts help you launch without reinventing the wheel.

What Stablecoin Accounts Deliver

1. Fast launch of wallet-based experiences with minimal setup
2. Secure account recovery and sub-second signing powered by TSS-MPC
3. Global stablecoin payments from day one
4. Support for the stablecoins your users already use
5. Built-in on-ramp and off-ramp integrations without added complexity
6. Seamless integration with financial and compliance partners
7. Flexible development with prebuilt UI components or raw APIs

Stablecoin Accounts are built on SOC 2 Type II compliant infrastructure using MPC wallets, with no single point of failure. Every wallet can be created using OAuth, email, or SMS, and seamlessly integrated into your app using the Dynamic SDK or prebuilt components. Support extends across every EVM chain, Solana, Sui, and more.

Dynamic and Fireblocks together support developers building for global use cases. You can integrate with partners like Banxa and Coinbase for fiat on-ramps, or bring your own providers for full control. You can also connect to external KYC flows using tools like Persona and Plaid to meet your compliance requirements. Whether you’re supporting stablecoin payments, savings, or programmable experiences across borders, Stablecoin Accounts give you the infrastructure to make it happen.

Last Updated: June 2026. Regulatory references and capabilities are based on publicly available information. Regulation capabilities are subject to change.