The future trillion stablecoin factories

Written by: Sleepy

Bridge, a stablecoin issuance platform under Stripe, one of the largest online payment infrastructures in the world, has launched the native stablecoin MetaMask USD (mUSD) in partnership with the wallet application MetaMask, which has over 30 million crypto users.

Bridge is responsible for the entire issuance process from reserve fund custody, compliance auditing to smart contract deployment, while MetaMask focuses on refining the front-end product interface and user experience.

This cooperation model is one of the most representative trends in the stablecoin industry at present, with more and more brand owners choosing to outsource the complex issuance process of stablecoins to professional "OEM factories," just like Apple has outsourced the production of the iPhone to Foxconn.

Since the birth of the iPhone, Foxconn has almost always undertaken the core production tasks. Today, about 80% of iPhones are assembled in China, with more than 70% coming from Foxconn's factories. The Zhengzhou Foxconn once accommodated more than 300,000 workers during peak seasons and was referred to as "iPhone City."

The cooperation between Apple and Foxconn is not just a simple outsourcing relationship, but a typical case of modern manufacturing industry division of labor.

Apple focuses its resources on the user side, such as design, system experience, brand narrative, and sales channels. Manufacturing does not provide a differentiation advantage for it; instead, it means huge capital expenditure and risk. Therefore, Apple has never owned its factories, but instead chooses to outsource production to professional partners.

Foxconn has established core capabilities in these "non-core" areas. They build production lines from scratch, manage raw material procurement, process flows, inventory turnover, and shipping rhythms, continuously compressing manufacturing costs. In terms of supply chain stability, delivery reliability, and production capacity flexibility, they have established a complete set of industrial processes. For brand clients, this means a frictionless expansion underpinning.

The logic of this model is division of labor and collaboration. Apple does not have to bear the fixed burdens of factories and workers, and can also avoid manufacturing risks during market fluctuations; Foxconn, on the other hand, extracts overall profits from very low per-unit profits through scale effects and multi-brand capacity utilization. Brands focus on creativity and consumer reach, while contract manufacturers take on industrial efficiency and cost management, creating a win-win situation.

This has not only changed the smartphone industry. Since the 2010s, computers, televisions, home appliances, and even cars have gradually moved towards an OEM model. Manufacturers such as Foxconn, Quanta, Wistron, and Jabil have become key nodes in the restructuring of the global manufacturing industry. Manufacturing has been modularized and packaged, becoming a capability that can be operated on a large scale and sold externally.

More than a decade later, this logic began to be applied to a seemingly unrelated field: stablecoins.

On the surface, issuing a stablecoin only requires minting on the blockchain. However, to truly make it operational, the work involved is far more complex than the outside world imagines. Compliance frameworks, bank custody, smart contract deployment, security audits, multi-chain compatibility, account system integration, KYC module integration—completing these steps requires long-term investment in both financial resources and engineering capabilities.

We have previously detailed this cost structure in "How Much Does It Cost to Issue a Stablecoin?": If an issuing institution starts from scratch, the initial investment often reaches the million level, and it is mostly non-compressible fixed expenditure. After going live, the annual operating costs may even reach tens of millions, covering various modules such as legal, auditing, operations, account security, and reserve management.

Nowadays, some companies are starting to package these complex processes into standardized services, providing plug-and-play solutions to banks, payment institutions, and brands. They may not necessarily appear in the spotlight themselves, but behind a stablecoin issuance, their shadow can often be seen.

Foxconn has also begun to appear in the world of stablecoins.

The "Foxconns" of the stablecoin world

In the past, issuing a stablecoin almost meant playing three roles at the same time: financial institution, technology company, and compliance team. Project parties needed to negotiate with custodial banks, build cross-chain contract systems, complete compliance audits, and even handle licensing issues separately in different jurisdictions. For most companies, this threshold was too high.

The emergence of the "stablecoin factory" model is precisely to solve this problem. The so-called "stablecoin factory" refers to institutions that specialize in providing issuance, management, and operational services for stablecoins to other enterprises. They are not responsible for creating the final brand aimed at users, but rather provide a complete set of infrastructure needed behind the scenes.

These companies are responsible for building a complete set of infrastructure from front-end wallets, KYC modules to back-end smart contracts, custody, and auditing. Clients only need to specify which currency they want to issue and in which markets to go live; other processes can be handed over to the outsourcing factory. Paxos played such a role when cooperating with PayPal to issue PYUSD: it managed the dollar reserves, handled on-chain issuance, and completed compliance connections, while PayPal only needed to display the "stablecoin" option in their product interface.

The core value of this model is reflected in three aspects.

The first is to reduce costs. If a financial institution wants to build a stablecoin system from scratch, the initial investment can easily exceed one million dollars. Compliance licensing, technology research and development, security audits, and bank partnerships all require separate investments at each stage. A factory can standardize the process and reduce the marginal cost for individual clients to far below that of the self-built model.

The second is to shorten the time. The launch cycle of traditional financial products often spans "years", while stablecoin projects that follow a fully self-researched path may take 12–18 months to implement. The OEM model allows clients to launch products within a few months. Stably's co-founder has publicly stated that their API integration model enables a company to complete the launch of a white-label stablecoin within a few weeks.

The third is risk transfer. The biggest challenge of stablecoins lies not in technology, but in compliance and reserve management. The Office of the Comptroller of the Currency (OCC) and the New York State Department of Financial Services (NYDFS) have very strict regulatory requirements for custody and reserves. For most companies looking to test the waters, bearing all compliance responsibilities is not realistic. Paxos has been able to secure major clients like PayPal and Nubank because it holds a New York state trust license, allowing it to legally custody USD reserves and undertake regulatory disclosure obligations.

Therefore, the emergence of stablecoin factories has, to some extent, changed the entry barriers of the industry. The high upfront investments that only a few giants could afford can now be split, packaged, and sold to more financial or payment institutions that have demand.

Paxos: Turn processes into products, turn compliance into business.

Paxos established its business direction very early on. It does not emphasize branding or pursue market share, but instead builds its capabilities around one thing: turning the issuance of stablecoins into a standardized process that others can choose to purchase.

The story begins in New York, in 2015, when the New York State Department of Financial Services (NYDFS) opened up digital asset licenses, and Paxos became one of the first licensed limited-purpose trust companies. That license is not just symbolic; it means that Paxos can custody customer funds, operate blockchain networks, and execute asset settlements. Such qualifications are rare among companies in the United States.

In 2018, Paxos launched the USDP stablecoin, placing the entire process under regulatory oversight: reserves held in banks, audits disclosed monthly, and minting and redemption mechanisms written on-chain. This approach has not been widely adopted due to high compliance costs and the inability to operate quickly. However, it has indeed created a clear and controllable structure, breaking down the birth process of a stablecoin into several standardizable modules.

Later, Paxos did not focus on promoting its own coin, but instead packaged this set of modules into a service to offer to others.

The most representative clients are two: Binance and PayPal.

BUSD is the stablecoin service provided by Paxos for Binance. Binance controls the brand and traffic, while Paxos takes on the responsibilities of issuance, custody, and compliance. This model operated for several years until 2023, when the NYDFS required Paxos to cease new minting due to insufficient anti-money laundering scrutiny. After this incident, the outside world began to notice that BUSD was issued by Paxos behind the scenes.

A few months later, PayPal launched PYUSD, with the issuer still being Paxos Trust Company. PayPal has users and a network, but lacks regulatory qualifications and does not intend to build it themselves. Through Paxos, PYUSD can legally and compliantly go live and enter the U.S. market. This is a representative demonstration of Paxos's "OEM" capabilities.

Its model is also being replicated overseas.

Paxos has obtained a major payment institution license issued by the Monetary Authority of Singapore (MAS) and based on this, has issued the stablecoin USDG. This is the first time Paxos has completed the entire process outside of the United States. It has also established Paxos International in Abu Dhabi, focusing on overseas operations and launched the yield-bearing USD stablecoin USDL, using local licensing to avoid U.S. regulation.

The purpose of this multi-domain structure is very straightforward: different clients and different markets require different compliance-enabled issuance pathways.

Paxos has not stopped issuing. In 2024, it launched a stablecoin payment platform to begin handling business collections and settlement operations, and it also participated in the construction of the Global Dollar Network, hoping to connect stablecoins from different brands and systems to facilitate clearing. It aims to provide a more complete backend infrastructure.

But the closer it gets to regulation, the easier it is to be picked apart by regulators. NYDFS has previously pointed out its insufficient anti-money laundering due diligence in the BUSD project. Paxos was fined as a result and required to make rectifications. Although this is not a fatal blow, it indicates that Paxos's path cannot be lightweight and has no room for ambiguity. It can only continue to thicken its compliance and clearly delineate boundaries. It turns every regulatory requirement and every security measure into a part of the product process. When others come to use it, they only need to attach their brand to issue stablecoins. The rest is handled by Paxos. This is its positioning and a business model that deeply binds technology with regulation.

Bridge: The heavyweight foundry brought by Stripe

The addition of Bridge has brought the first real giant to the stablecoin factory track.

It was acquired by Stripe in February 2025, which is one of the largest online payment infrastructures in the world, processing billions of transactions every day and serving millions of merchants. Compliance, risk control, and global operations are pathways that Stripe has already successfully navigated, and now they are being integrated onto the blockchain through Bridge.

Bridge's positioning is very straightforward, providing complete stablecoin issuance capabilities for enterprises and financial institutions. It is not merely a technology outsourcing solution, but rather modularizing the mature processes of the traditional payment industry and packaging them into standardized services. Reserve custody, compliance auditing, and contract deployment are all managed by Bridge, allowing clients to simply call the interface to integrate stablecoin functionality into their front-end products.

The case studies of MetaMask best illustrate the issue. As one of the largest Web3 wallets in the world, it has over thirty million users, but lacks financial licenses and reserve management qualifications. Through Bridge, MetaMask can launch mUSD in a matter of months, instead of spending years building a compliant financial system.

The business model chosen by Bridge is platform-oriented. It is not tailored for a single client but aims to build a standardized issuance platform. The logic is consistent with Stripe's approach to payments, lowering the barriers through APIs, allowing clients to focus on their core business. Just as countless e-commerce businesses and applications integrated credit card payments in the past, companies can now issue stablecoins in a similar manner.

The advantages of Bridge come from its parent company. Stripe has established a compliance cooperation network globally, which facilitates Bridge's entry into new markets. At the same time, Stripe's built-in merchant network also constitutes a natural potential customer base. For those enterprises that want to try stablecoin business but lack on-chain technology or financial qualifications, Bridge provides a ready-made solution.

But there are also limitations. As a subsidiary of a traditional payment company, Bridge may be more conservative than crypto-native enterprises, and its iteration speed may not be fast enough. In the crypto community, Stripe's brand influence is also far less than in the mainstream business world.

The market positioning of Bridge is more inclined towards traditional finance and corporate clients. The choice of MetaMask illustrates this point, as it requires a reliable financial partner, not just a technology provider.

The entry of Bridge signifies that the stablecoin manufacturing business is gaining attention from traditional finance. As more players with similar backgrounds join, the competition in this space will intensify, but it will also push the industry towards maturity and standardization.