When token issuance becomes a "private label" business, what can stablecoin issuers rely on to build a moat?

Author: Chuk

Compiled by: Jiahua, ChainCatcher

Stablecoins are Evolving into Financial Infrastructure

Stablecoins are transforming into application-level financial infrastructure. With the clarity brought by the "GENIUS Act," brands like Western Union, Klarna, Sony Bank, and Fiserv are shifting from "integrating USDC" to launching their own stablecoins through white-label issuance partnerships.

This shift is driven by the surge of stablecoin "issuance as a service" platforms. A few years ago, the candidate list was essentially limited to Paxos. Today, depending on your needs, there are over ten reliable options, including new platforms like Bridge and MoonPay, compliance-focused players like Anchorage, and large established companies like Coinbase.

This abundance makes issuing stablecoins seem commoditized. At the token infrastructure level, this is indeed increasingly the case. However, "commoditization" depends on the buyer and the tasks that need to be accomplished.

Once you strip away the token infrastructure from liquidity operations, regulatory landscapes, and surrounding support (deposit and withdrawal channels, orchestration, accounts, card issuance), the market appears less like a "race to the bottom" (referring to competing for advantages by continuously lowering standards, prices, or regulatory requirements) and more like segmented competition, with pricing power concentrated in areas where outcomes are hardest to replicate.

Caption: The supply of white-label stablecoins is rapidly increasing, creating a vast new issuer market beyond USDC/USDT.

If you view issuers as interchangeable, you will miss the real constraints and the places where profit margins may persist.

Why Are Giants Entering the "Brand Coin" Market?

That's a good question. Companies do this for three main reasons:

1. Economic Benefits: Retain more value from customer activities (balances and cash flows) and gain adjacent revenues (fund management, payments, lending, card issuance).

2. Behavior Control: Embed custom rules and incentives (such as loyalty programs) and choose settlement paths and interoperability that align with your products.

3. Faster Action: Stablecoins enable teams to launch new financial experiences globally without rebuilding the entire banking tech stack.

Importantly, most brand coins do not need to reach the scale of USDC to be considered "successful." In closed or semi-open ecosystems, KPIs do not necessarily revolve around market capitalization. They can be improvements in ARPU (average revenue per user) and unit economics: how much additional revenue, retention, or efficiency the stablecoin functionality unlocks.

The Operational Logic and Division of Labor in White-Label Issuance

To determine whether issuance is "commoditized," we first need to define the tasks to be accomplished: reserve management, smart contracts + on-chain operations, and distribution channels.

Issuers primarily own reserves + on-chain operations; brands own the demand side and distribution network. Differentiation exists in the details.

White-label issuance allows a company (the brand) to launch and distribute a branded stablecoin while outsourcing the first two layers to a nominal issuer.

In practice, ownership is divided into two categories:

• Primarily owned by the brand: distribution channels. Where the coin is used, the default user experience, wallet locations, and which partners or venues support it.

• Primarily owned by the issuer: issuance operations. The smart contract layer (token rules, management controls, minting/burning execution) and reserve layer (reserve assets, custody, redemption operations).

Operationally, most of this has now been productized through APIs and dashboard products, with launch times depending on complexity, ranging from a few days to a few weeks. Not every project today needs to comply with U.S. regulatory requirements for issuers, but for issuers targeting U.S. enterprise buyers, compliance has already been part of the product, even before the formal implementation of the "GENIUS Act."

Distribution channels are the most challenging part. Within a closed ecosystem, getting the token used is primarily a product decision. Externally, integration and liquidity become bottlenecks, and issuers often blur this boundary by assisting with secondary market liquidity (exchange/market maker relationships, incentives, initial liquidity injections). The brand still controls user demand, but this market entry support is one of the areas where issuers can materially change outcomes.

Different buyers weigh these responsibilities differently, which is why the issuer market has split into different clusters.

Buyer Demand Determines Differentiation

Commoditization refers to services becoming standardized enough that issuers can be replaced without changing outcomes, pushing competition toward price rather than differentiation.

If replacing an issuer would change the outcomes you care about, then issuing stablecoins is not commoditized for you.

At the token infrastructure level, replacing issuers typically does not change outcomes, so it is becoming increasingly interchangeable. Many issuers can hold reserves similar to treasury bills, deploy audited minting/burning contracts, provide baseline management controls (pause/freeze), support mainstream blockchains, and expose similar APIs.

However, brands rarely just purchase simple token deployments. They buy outcomes, and the required outcomes largely depend on the type of buyer. The market is directionally splitting into several clusters, each with different points of alternative failure. Within each cluster, teams often end up with only a few viable options.

1. Enterprises and Financial Institutions are procurement-led, optimizing for trust. Alternatives fail on compliance reputation, custody standards, governance, and large-scale (hundreds of millions) 24/7 redemption reliability. In practice, this is a "risk committee" style of procurement: issuers must be impeccable on paper and tedious in production operations (robust).

2. Fintech Companies and Consumer Wallets are product-led, optimizing for delivery and distribution channels. Alternatives fail on time to market, depth of integration, and supportive value-added tracks that make tokens usable in actual workflows (e.g., deposit and withdrawal channels). In practice, this is a "sprint cycle launch" style of procurement: the winning issuer is the one who can minimize KYC/channel/orchestration work and get your entire functionality live the fastest, not just the stablecoin itself.

3. DeFi and Investment Platforms are on-chain native, optimizing for composability and programmability, including designs that optimize yield with different risk trade-offs. Alternatives fail on reserve model design, liquidity dynamics, and on-chain integration. In practice, this is a "design constraint" style of procurement: if it can enhance composability or yield, teams will accept different reserve mechanisms.
   

Differentiation is moving up the technology stack, particularly evident in the fintech/wallet space. As issuance becomes a feature, issuers compete by bundling tasks and assisting with adjacent tracks for distribution: compliant deposit and withdrawal channels, virtual accounts, payment orchestration, custody, and card issuance. This can maintain pricing power by altering time to market and operational outcomes.

While There Are Many Issuers, Few Are Suitable for You

With this framework, the issue of commoditization becomes clear.

Stablecoin issuance has commoditized at the token level, but has not commoditized at the outcome level, as buyer constraints make some issuers irreplaceable.

As the market evolves, issuers serving each cluster may converge on the products needed to serve that market, but we have not reached that point yet.

True Moats and Network Effects

If token infrastructure has devolved into a "ticket to entry," and the differentiation advantages of marginal features are gradually being eroded, then an obvious question arises: can issuers establish a lasting moat?

The current competitive landscape resembles a customer acquisition game that relies on "high switching costs" to lock in customers. Changing issuers involves a ripple effect—affecting reserve custody, compliance processes, redemption mechanisms, and downstream integration—making it far from a "one-click switch."

Aside from service bundling strategies, the most likely long-term moat lies in "network effects." As the demand for brand stablecoins for seamless 1:1 conversions and shared liquidity grows, the focus of the value chain may shift to the issuer or protocol layer that becomes the "default interoperability network."

The core unresolved question is: will this network ultimately be privately owned by issuers (with strong value capture capabilities), or will it become a neutral industry standard (high adoption but weak value capture)?

A trend worth closely monitoring is whether interoperability will ultimately devolve into a cheap foundational feature or evolve into a primary source of pricing power.

Tokens Are Just Tickets; Ecosystems Are the Deciding Factor

In summary:

• Issuance has commoditized at the core level, while differentiation exists at the marginal level. Token deployment and baseline controls are converging. Where operations, liquidity support, and integration are critical, outcomes still diverge.

• For any given buyer, the market is not as crowded as it seems. Real-world constraints quickly narrow the shortlist, and "reliable options" typically number only a few, rather than ten.

• Pricing power comes from bundled services, regulatory landscapes, and liquidity constraints. The value lies not in "token creation," but more in the surrounding tracks that make stablecoins usable in production.

• It remains unclear which moats are sustainable. Network effects from shared liquidity and conversion standards seem like a reasonable path, but as interoperability matures, who can capture value remains uncertain.

What to watch next: Will brand stablecoins cluster around a few exchange networks, or will interoperability become a neutral standard? Regardless of the outcome, the lesson is the same: tokens are just tickets. The business is about everything surrounding them.