Stablecoins are new-ish, but ways to think about the structure of how money moves is not.
New technologies and opportunities tend to repeatedly come from a advantages like speed, cost, immutability. Many new technologies seem different but are actually very similar to something we already know.
Card issuance for example, is remarkably similar to stablecoin issuance. Here is a comparison:
| Card Issuance | Stablecoin Issuance | |
| Attributes | ||
| Issuer | Normally a bank Ex. Barclays, Citi, Goldman, etc | Normally not a bank Ex. Circle, Paxos, Brale, etc |
| Network | Proprietary**** Ex. Visa, Mastercard, Discover, Amex*, etc | Open Ex. Polygon, Solana, Ethereum, Base, Stellar, etc |
| Distribution | Brands Ex. Delta, Gap, Acorns, Apple, GM, etc | Brands Ex. USDC, USDT, PYUSD, USDP, SBC, etc |
| Accessibility | 24/7 | 24/7 |
| Revenue** | ||
| Transactional | Yes. Interchange. | Yes. Gas fees. |
| Reserves | Yes Reserve Share | Yes Reserve Share |
| Revenue Share | Yes | Yes |
| Costs*** | ||
| Underwriting | Yes | Yes |
| Physical Cards | Yes | No |
| Risk Management | Yes | Yes |
| Reporting | Yes | Yes |
| Pre-funding | Yes | No |
Stablecoin benefits like speed, cost, programmability, and composability are reasons to the adopt them. When designed well with the appropriate regulatory alignment, stablecoins are not money reinvented. Stablecoins are money extended.
As a final note, thank you to several people in the V-Sum community who provided feedback on this post and challenged the structure. It led to several discoveries. The first is this way of thinking is not perfect. It is a starting point for discussion purposes and helps us have a productive conversation about issuance programs. The second is that the dialogue is incredibly productive. As a result, I’ve left comments open below.
*Amex is also a bank.
**Done well, both issuance programs do generate revenue.
***There are costs not listed. BSA compliance is not an optional element of either program.
****There is nothing stopping proprietary networks from implementing protocols or vice versa.