Slow Stablecoin Issuer Bet
Kevin Xue@kevinxue
The idea
I believe stablecoins will work their way into everyday money slowly over the next decade, and the issuers behind them will keep most of the profit from interest on reserves. So this basket centers on Circle as the one pure stablecoin issuer, surrounded by companies that share in USDC's income, are building their own coins, or manage the reserve cash itself. Banks and asset managers add steadiness while Circle and Coinbase carry more of the upside, with a small cash buffer.
What it owns
- Payment companies and banks launching their own digital dollar tokens could capture issuer economics over time as everyday use slowly spreads. · PayPal HoldingsRuns PYUSD stablecoin and already moves money for a huge base of shoppers and merchants, positioning it to capture issuer economics as everyday adoption takes hold., JPMorgan ChaseBuilding JPM Coin, a bank deposit token expanding to multiple blockchains, and has the resources to grow a digital dollar offering alongside traditional banking., CitigroupTokenizing bank deposits for instant movement among corporate clients, a bank-run approach to digital dollars with scale and institutional credibility., FiservProvides back-office systems for thousands of banks and is building stablecoin tools for them, so it captures infrastructure revenue if bank adoption of digital dollars slowly grows., Western UnionBringing stablecoins into cross-border money transfers where digital dollars have natural everyday use, positioning it to capture value from a slow shift away from traditional remittances.37%
- Issues USDC and earns interest on the cash and Treasury bills backing every coin in circulation, making it the most direct way to own stablecoin issuer profits. · Circle Internet GroupIssues USDC and earns interest on the reserves backing every coin, making it the purest way to own stablecoin issuer profits as adoption spreads.19%
- Share in the interest income earned on USDC reserves as the stablecoin circulates more widely, so they benefit from adoption without issuing the coin themselves. · Coinbase GlobalReceives a share of interest income from USDC reserves and distributes the coin to millions of users, so it gains as stablecoin balances grow., Robinhood MarketsParticipates in Global Dollar stablecoin network and shares reserve income with distribution partners, reaching millions of retail customers who could hold digital dollars.19%
- Hold and manage the cash and Treasury bills backing stablecoins, earning fees as reserve balances grow with adoption. · BlackRockManages money-market funds holding stablecoin reserves, earning fees as new dollars get parked behind coins and balances rise., State StreetHolds and safeguards cash and Treasuries for large institutions, the core custody work a growing pile of stablecoin reserves requires.17%
- Cash8%