---
title: "How much does it cost to issue a stablecoin?"
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description: "By | Kaori, Sleepy.txt, Peggy Edited by | Sleepy.txt From Wall Street investment banks to tech companies in the Bay Area, and then to financial giants and payment platforms in Asia, more and more companies are eyeing the same business—stablecoin issuance. Under the scale effect, the marginal issuance cost for stablecoin issuers is zero, making it seem like a risk-free arbitrage game in their eyes. In the current global interest rate environment, the spread income is incredibly attractive. Stablecoin issuers only need to deposit users' dollars into short-term U.S. Treasury bonds..."
datetime: "2025-08-04T04:19:44.000Z"
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author: "[BlockBeats](https://longbridge.com/zh-HK/profiles/3305938.md)"
---

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# How much does it cost to issue a stablecoin?

Text | Kaori, Sleepy.txt, Peggy

Edit | Sleepy.txt

From Wall Street investment banks to Bay Area tech companies, and then to Asian financial giants and payment platforms, more and more companies are eyeing the same business—stablecoin issuance.

Under the scale effect, the marginal issuance cost of stablecoin issuers is zero, and in their eyes, this seems like a risk-free arbitrage game. In the current global interest rate environment, the interest spread income is extremely attractive. Stablecoin issuers only need to deposit users' dollars into short-term U.S. Treasury bonds to earn tens of billions of dollars annually with a stable interest spread of 4-5%.

Tether and Circle have long proven that this path is feasible, and as stablecoin regulations in different regions gradually take effect, the compliance path becomes clearer. More and more companies are eager to try, and even FinTech giants like PayPal and Stripe are quickly entering the market. Not to mention that stablecoins naturally have the ability to integrate with payment, cross-border settlement, and even Web3 scenarios, offering huge imagination space.

Stablecoins have become a must-have for global financial companies.

But the problem is here, many people only see the arbitrage logic of stablecoins that "seem risk-free" but ignore that this is a capital-intensive, high-threshold business.

If a company wants to legally and compliantly issue a stablecoin, how much does it cost?

This article will break down the real cost behind a stablecoin and tell you whether this seemingly easy arbitrage business is worth doing.

**The accounts behind stablecoin issuance**

In many people's impressions, issuing a stablecoin is nothing more than issuing an on-chain asset, and from a technical perspective, the threshold does not seem high.

However, to truly launch a stablecoin with a compliant identity and face global users, the organizational structure and system requirements behind it are far more complex than imagined. It involves not only financial licenses and audits but also fund custody, reserve management, system security, and continuous operation and maintenance, among other heavy asset investments.

In terms of cost and complexity, its overall construction requirements are no less than those of a medium-sized bank or a compliant trading platform.

The first hurdle faced by stablecoin issuers is the construction of a compliance system.

They often need to simultaneously meet the regulatory requirements of multiple jurisdictions and obtain key licenses such as the U.S. MSB, New York State BitLicense, EU MiCA, and Singapore VASP. Behind these licenses are detailed financial disclosures, anti-money laundering mechanisms, and continuous monitoring and compliance reporting obligations.

Compared to medium-sized banks with cross-border payment capabilities, stablecoin issuers often spend tens of millions of dollars annually on compliance and legal expenses just to meet the most basic cross-border operational qualifications.

In addition to licenses, the construction of KYC/AML systems is also a mandatory requirement. Project parties usually need to introduce mature service providers, compliance consultants, and outsourcing teams to continuously operate a complete set of mechanisms such as customer due diligence, on-chain review, and address blacklist management.

In today's increasingly stringent regulatory environment, it is almost impossible to obtain access to major markets without establishing strong KYC and transaction review capabilities.

Market analysis indicates that the total cost required for HashKey to apply for a Hong Kong VASP license is as high as 20 million to 50 million Hong Kong dollars, and at least two regulatory officers (RO) must be equipped, and cooperation with the Big Three accounting firms is required, with costs several times higher than traditional industries.

In addition to compliance, reserve management is also a key cost in stablecoin issuance, covering two major parts: fund custody and liquidity arrangements.

On the surface, the asset-liability structure of stablecoins is not complicated. Users deposit dollars, and the issuer purchases equivalent short-term U.S. Treasury bonds.

But once the reserve scale exceeds 1 billion or even 10 billion dollars, the operating costs behind it will rise rapidly. Just the annual fee for fund custody alone can reach tens of millions of dollars; and treasury transactions, clearing processes, and liquidity management not only bring additional costs but also highly depend on the collaborative execution of professional teams and financial institutions.

More critically, to ensure an "instant redemption" user experience, issuers must prepare sufficient liquidity positions off-chain to respond to large redemption requests under extreme market conditions.

This configuration logic is very close to the risk preparation mechanism of traditional money market funds or clearing banks, far from being as simple as "smart contract lock-up."

To support this architecture, issuers must also establish highly stable and auditable technical systems covering key financial processes on-chain and off-chain. This usually includes smart contract deployment, multi-chain minting, cross-chain bridge configuration, wallet whitelist mechanisms, clearing systems, node operation and maintenance, security risk control systems, and API integration, among others.

These systems not only need to support large-scale transaction processing and fund flow monitoring but also need to be upgradeable to adapt to regulatory changes and business expansion.

Unlike the "lightweight deployment" of general DeFi projects, the underlying system of stablecoins essentially serves as a "public settlement layer," with technical and operational costs remaining at the level of millions of dollars annually.

Compliance, reserves, and systems are the three basic projects of stablecoin issuance, jointly determining whether the project can develop sustainably in the long term.

In essence, stablecoins are not a technical tool product but a financial infrastructure that combines trust, compliance architecture, and payment capabilities.

Only those companies that truly possess cross-border financial licenses, institutional-level clearing systems, on-chain and off-chain technical capabilities, and controllable distribution channels can operate stablecoins as a platform-level capability.

For this reason, before deciding whether to enter this track, companies must first determine whether they have the ability to build a complete stablecoin system, including: Can they obtain continuous recognition from multiple regulators? Do they have their own or trusted fund systems? Can they directly control wallet, trading platform, and other channel resources to truly open up the circulation end?

This is not a startup opportunity that can be taken lightly, but a tough battle that requires high demands on capital, systems, and long-term capabilities.

**After issuing stablecoins, then what?**

Completing the issuance of stablecoins is just the beginning.

Regulatory permits, technical systems, and custody structures are just the prerequisites for entry. The real challenge is how to make it circulate.

The core competitiveness of stablecoins lies in "whether anyone uses them." Only when stablecoins are supported by trading platforms, integrated by wallets, accessed by payment gateways and merchants, and ultimately used by users, can they be truly circulated. And on this road, there are high distribution costs waiting for them.

In the stablecoin industry chain diagram released by Beating in collaboration with digital asset self-custody service provider Safeheron, stablecoin issuance is only the starting point of the entire chain, and to make stablecoins circulate, attention must be paid to the midstream and downstream.

Taking USDT, USDC, and PYUSD as examples, we can clearly see three completely different circulation strategies:

USDT relied on grayscale scenarios in its early days to build an irreplicable network effect, quickly occupying the market standard position with its first-mover advantage;

USDC mainly relies on channel cooperation under a compliance framework, gradually expanding with the help of platforms like Coinbase;

Even with the backing of PayPal, PYUSD still needs to rely on incentives to drive TVL and has always struggled to penetrate real usage scenarios.

Their paths are different, but they all reveal the same fact—the competition for stablecoins is not in issuance but in circulation. The key to success lies in whether they have the ability to build a distribution network.

**1\. USDT's irreplicable first-mover structure**

The birth of USDT stemmed from the real dilemma faced by cryptocurrency trading platforms in that era.

In 2014, Bitfinex, a cryptocurrency trading platform headquartered in Hong Kong, was rapidly expanding globally, and traders wanted to trade in dollars, but the platform always lacked a stable dollar deposit channel.

The cross-border banking system was hostile to cryptocurrencies, making it difficult for funds to flow between China, Hong Kong, and Taiwan, with accounts frequently being closed, and traders constantly facing the risk of fund interruptions.

Against this backdrop, Tether was born. Initially running on the Omni protocol based on Bitcoin, its logic was simple and direct: users wire dollars to Tether's bank account, and Tether issues equivalent USDT on-chain.

This mechanism bypassed the traditional banking clearing system, allowing "dollars" to circulate 24/7 without borders for the first time.

Bitfinex was Tether's first important distribution node, and more importantly, both were actually operated by the same group of people. This deeply bound structure allowed USDT to quickly gain liquidity and usage scenarios in its early days. Tether provided Bitfinex with a compliance-ambiguous but efficient dollar channel. They conspired, shared information, and aligned interests.

From a technical perspective, Tether is not complex, but it solved the pain point of cryptocurrency traders' fund inflows and outflows, becoming the key to its early user mindshare.

In 2015, as capital market volatility intensified, USDT's appeal quickly expanded. A large number of non-dollar region users began seeking dollar alternatives to bypass capital controls, and Tether provided them with a "digital dollar" solution that required no account opening, no KYC, and could be used with internet access.

For many users, USDT was not just a tool but a hedging method.

The 2017 ICO boom was a key moment for Tether to complete its PMF. After the Ethereum mainnet went live, ERC-20 projects exploded, and trading platforms turned to cryptocurrency trading pairs, with USDT immediately becoming the "dollar substitute" in the altcoin market. By using USDT, traders could freely shuttle between platforms like Binance and Poloniex to complete transactions without repeatedly moving funds in and out.

Interestingly, Tether never actively spent money on promotion.

Unlike other stablecoins that adopt subsidy strategies in the early stages to expand market share, Tether never actively subsidized trading platforms or users to use its services.

On the contrary, Tether charges a 0.1% fee for each minting and redemption, with a minimum redemption threshold of $100,000 and an additional $150 USDT verification fee.

For institutions wishing to directly access its system, this fee structure almost constitutes a "reverse promotion" strategy. Because it is not selling a product but setting a standard. The cryptocurrency trading network has long been built around USDT, and any participant wishing to access this network must align with it.

After 2019, USDT has almost become synonymous with "on-chain dollars." Despite frequent regulatory scrutiny, media questioning, and reserve disputes, USDT's market share and circulation volume continue to rise.

By 2023, USDT has become the most widely used stablecoin in non-U.S. markets, especially in the Global South. In high-inflation regions such as Argentina, Nigeria, Turkey, and Ukraine, USDT is used for salary settlement, international remittances, and even replacing local currencies.

Tether's real moat has never been code or asset transparency but the trust path and distribution network it established early in the Chinese-speaking cryptocurrency trading community. This network started in Hong Kong, used Greater China as a springboard, and gradually extended to the entire global non-Western world.

And this "first-mover as standard" advantage means that Tether no longer needs to prove who it is to users; instead, the market must adapt to the circulation system it has long established.

**2\. Why Circle relies on Coinbase**

Unlike Tether's natural growth path in grayscale scenarios, USDC was designed from the beginning as a standardized, institutionalized financial product.

In 2018, Circle and Coinbase jointly launched USDC, aiming to create an "on-chain dollar" system for institutions and mainstream users under a compliant and controllable framework. To ensure governance neutrality and technical collaboration, both parties each held 50% of the shares and established a joint venture called Center, responsible for USDC's governance, issuance, and operation.

However, this governance joint venture model could not solve the key problem—how to make USDC truly circulate?

The biggest difficulty in the stablecoin business has never been issuance but how to make it widely held, accepted, and used. In the cryptocurrency market, trading platforms are the real traffic hubs.

At that time, Circle did not control the traffic entrance. To make USDC mainstream, it had to rely on Coinbase's user base and compliance brand endorsement. As a result, the two parties quickly formed a clear division of labor in actual operations—Circle was responsible for product design and issuance operations, while Coinbase was responsible for promotion and distribution.

In 2023, to promote the IPO process, Circle repurchased all of Center's shares, becoming the sole issuer of USDC. However, behind this share split transaction were two agreements with huge implicit interest transfers—the main cooperation agreement and the ecosystem cooperation agreement, which clearly granted Coinbase long-term priority distribution rights for USDC promotion revenue.

According to Circle's prospectus, USDC's main revenue comes from reserve interest spreads. These funds can only be invested in extremely short-term U.S. Treasury bonds, repurchase agreements, and money market funds, with an overall structure that is highly conservative and an annual interest rate maintained at 4% to 5%.

But the problem is that Circle retains less than 40% of this interest income, with nearly 60% allocated as promotion expenses to Coinbase and other partner platforms. In 2024, distribution and transaction costs totaled $1.01 billion (60% of revenue), with $908 million (54% of revenue) paid to Coinbase.

More critically, this distribution structure is severely imbalanced with USDC's actual usage. Data from 2024 shows that only about 22% of USDC is held on the Coinbase platform, yet it takes more than half of the distribution share.

This extremely skewed agreement arrangement essentially puts Circle in a state of reverse interest binding.

The agreement also sets extremely harsh renewal terms. As long as Coinbase achieves specific KPIs—such as the proportion of USDC held on the platform and integration support for USDC—it can automatically renew for three years, with unlimited renewals, leaving Circle with almost no possibility of exit. More extremely, if Circle defaults, Coinbase even has the right to demand the transfer of USDC's trademark and intellectual property rights.

For this reason, Coinbase's promotion efforts for USDC far exceed those of other platforms. To attract users to hold coins, it even once subsidized USDC deposit annual interest rates to 12%.

This structure also exposes a fundamental problem—USDC's circulation ability is heavily dependent on Coinbase. Once regulation tightens, cooperation changes, or Coinbase launches its own stablecoin, USDC's distribution system will face a severe blow.

Not to mention that in the case of high promotion costs and squeezed profits, Circle's financial performance has always been under pressure. For the fiscal years ended December 31, 2024, 2023, and 2022, Circle incurred approximately $907.9 million, $691.3 million, and $248.1 million in distribution costs due to its cooperation agreement with Coinbase, respectively.

This also explains why Circle has always emphasized itself as a "neutral and compliant" financial infrastructure rather than a traffic-oriented issuer. Because in the real structure, it does not control the distribution initiative and can only continuously convert interest spreads into subsidies to feed the distribution platform behind it.

Ultimately, USDC has become the closest existence to traditional financial products in the stablecoin track. It has transparent reserve management, compliant institutional design, and standardized distribution agreements, but it always lacks control over the circulation path.

Its future does not depend on its product capabilities but on whether the cooperation system is stable enough to withstand the dual pressures of the market and regulation.

**3\. Why PYUSD relies on incentives to drive TVL but struggles to circulate**

After stablecoin issuance entered a resource competition, PayPal's PYUSD was once highly anticipated. It initially planned to cooperate with FTX in 2022 to directly issue and deploy a payment network on Solana, but with the collapse of FTX, this plan was shelved, and PYUSD eventually turned to the Ethereum ecosystem, officially launching in August 2023.

It has the compliance qualifications of a traditional financial giant, strong brand endorsement, and user base, as well as ample incentive resources and technical integration capabilities. But reality has proven that such a top-tier stablecoin experiment did not bring the expected circulation and retention.

Under the promotion of the Solana Foundation's "PayFi" concept and the cooperation of multiple DeFi protocols, PYUSD once became the main asset for on-chain incentives on its first anniversary of issuance.

Protocols such as Kamino, MarginFi, and Drift offered annual yields of 13-17%, with Kamino alone absorbing 470 million PYUSD, and the total TVL exceeding $1 billion. PayPal invested more than $6 million in incentives each month, attempting to replicate USDC's liquidity expansion model through subsidies.

But the growth of these numbers is not driven by natural demand but by continuously stacked subsidies. Most of the funds come to pursue short-term returns, and the real purpose of users depositing PYUSD is not payment, settlement, or investment, but to receive rewards.

As subsidies recede, related protocols on Solana have successively lowered APY, and Kamino's yield even once fell below 7%. Capital quickly exited, PYUSD's total market value fell by nearly 40% from its peak, and TVL fell back below $500 million, revealing its high dependence on incentive mechanisms and exposing the core issue of lacking ecosystem stickiness.

The bigger problem is that PYUSD, launched as a "Web2 + Web3 bridge," has never been able to open up real payment paths off-chain. For a long time, PYUSD could only be used internally within PayPal and Venmo, lacking actual merchant access; while on-chain holding addresses are highly concentrated in arbitrage and DeFi strategy accounts, with almost no real consumption behavior visible.

PayPal is clearly aware of this issue. In July 2025, the company launched the "Pay with Crypto" service, allowing some merchants in the United States to accept crypto payments, including PYUSD, and support real-time exchange settlement. Merchant settlement fees are as low as 0.99%, significantly lower than traditional cross-border payment costs.

At the same time, PayPal also plans to build a stablecoin profit model similar to the traditional payment system through exchange commissions and merchant discount rates.

PayPal Senior Vice President Jose Fernandez once publicly stated that PYUSD should not rely solely on reserve interest spreads for profit but should explore transaction exchange and high-frequency settlement fee mechanisms as a long-term sustainable income source. This logic essentially attempts to "platformize" stablecoins, reconstructing the clearing and settlement network with stablecoins and creating a business closed loop similar to the credit card system.

But as emphasized earlier, the core competitiveness of stablecoins has never been whether the technical functions are complete, but whether they can build a "controllable distribution network" and a "sustainable usage path."

In this regard, PYUSD is still in a stage where the system is not closed. TVL can be boosted by subsidies, but circulation must be driven by real demand. Once incentives end and usage scenarios are lacking, its weak circulation foundation and large ecosystem gaps are exposed.

PYUSD is a typical case of top-tier resources failing to build an underlying network. Its problem is not a lack of money but mistaking users incentivized for short-term holding as real long-term users.

When issuers have technology, brand, and funds but cannot reach real payment scenarios and clearing paths, such stablecoins are destined to struggle in the long run.

**Why still do stablecoins?**

Contrary to the perception of stablecoins as "cash cows," the stablecoin issuance business is more like a gamble.

On the surface, stablecoin issuers can obtain considerable income through interest spreads. Especially with current U.S. Treasury rates remaining high, a stable return of 5% to 6% is attractive enough for any company.

But from a practical business perspective, interest spreads are just book income, and the premise is that you must first invest huge costs to build a compliance system, open up clearing channels, deploy on-chain architecture, and build user entry points. Stablecoin issuance is not a business where you can "lie down and collect rent," but a heavy asset project that requires investment first and then waits for returns.

Technical implementation is just the minimum threshold. More stringent are regulatory licenses, clearing systems, and distribution channels, which determine whether a stablecoin can survive in the long term.

In essence, stablecoins are a financial infrastructure oriented towards payment and clearing, and only institutions with full-chain capabilities are qualified to participate in this game.

The three companies in Hong Kong's stablecoin sandbox exemplify this point. Whether it's Standard Chartered Bank, JD.com, or Circle Technology, they do not operate stablecoins as an independent product but as part of their existing business systems, embedding them into the entire chain of clearing, traffic, credit, and payment.

For such companies, stablecoins are not a new project but an extension and integration of their original financial structure. The real strategic significance is not the stablecoin itself but whether it can naturally integrate into the clearing, payment, and credit systems and become a lever for growth.

Under this grand premise, the competition among stablecoin issuing companies is no longer about incentive means but about who can master the clearing path and catch the last jump of the payment scenario. Whoever can open up the capital closed loop will have a real moat.

For companies intending to enter this track, they must first ask themselves whether they have the possibility of obtaining regulatory licenses? Do they have a system and custody architecture that can operate long-term without problems? Do they have stable users or distribution channels to smoothly and safely push stablecoins into real scenarios?

If these elements are in place, stablecoins can become a strategic engine for a company to improve capital flow efficiency and extend financial boundaries. Especially in scenarios such as cross-border settlement, e-commerce closed loops, and platform internal credit systems, it has shown specific and feasible landing value.

It can be the core module of the platform architecture or the key lubricant of the financial system. But the premise is that the company must have the ability to control the entire chain.

For companies that have not yet acquired these capabilities, entering the market rashly may bring dual risks of regulation and cost. Collaborating with mature custody institutions, licensed clearing channels, or technical service providers to enter from more controllable links may be a more realistic path.

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## 評論 (1)

- **888333 · 2025-08-04T13:02:12.000Z**: 8