Stablecoins are a payments business with a float attached

Stablecoins won the argument in the corridors where correspondent banking is slow, expensive, or simply absent. That makes them a payments business, and payments businesses are won at the edge — payroll, marketplace payouts, remittance, supplier settlement — not at the settlement layer.

Chains become plumbing nobody discusses. That is the correct end state for infrastructure and a poor end state for infrastructure equity.

Aggregate volume charts are close to useless here, because they mix genuine payment flow with collateral rotation. We split the two before we look at anything else, and the split routinely removes most of the number that was quoted to investors.

Corridor economics then decide the outcome. In our case file, one payout business grew steadily in three corridors, and within two years was losing two of them on price to instant domestic rails that regulators had actively subsidised. The third corridor — where no local rail existed — carried almost all the gross profit. Aggregate volume never showed that.

Float yield is the loudest revenue line and the most cyclical. One issuer we followed lost a large share of revenue inside three quarters of rate compression, and what remained was a fee business competing against bank-issued alternatives under a hardening regime. That is a materially different company from the one that was funded.

The durable position is the application that owns the payer relationship and treats settlement as a cost line it renegotiates every year. Owning the rail is the weaker position, because the rail is the part everyone is trying to commoditise.

As rules harden, issuance concentrates toward regulated balance sheets. That is not automatically bad for non-bank issuers, but it changes who can distribute at scale and who has to rent distribution from someone who can.

We track bank versus non-bank issuer share as the cleanest proxy for where the fee will eventually sit.

Instant domestic rails keep improving and are politically favoured. If they reach the remaining high-margin corridors, the stablecoin advantage narrows to cross-border and to jurisdictions with capital controls — a real market, but a smaller and more fragile one than current valuations imply.