I. Stablecoins: The “Private Money Printer” of the Digital Age
Over the past year, “stablecoin” has consistently ranked among the hottest terms in capital markets. Stablecoins are digital currencies pegged to fiat currencies, theoretically maintaining a 1:1 parity with legal tender and backed by real assets.
Here’s the question: If large cross-border e-commerce companies issue stablecoins to reduce transaction costs and save tens of millions annually, that’s reasonable. But in reality, the entities actually issuing stablecoins are often blockchain platforms and digital service providers. So how much profit can this “1:1 money-printing privilege” really generate?
Don’t underestimate this business. The global stablecoin market landscape is already clear: USDT holds 60% market share, while USDC holds 25%. Among them, USDT’s issuer, Tether, has stunned the world: its average employee compensation ranks second globally; Bloomberg also reported that it is considering selling a 3% stake for $15-20 billion, implying a valuation of $500 billion—placing it on par with OpenAI and SpaceX.
What justifies Tether’s valuation?
II. The “Money-Printing Logic” of Stablecoins
Traditional banks profit by absorbing deposits and lending at higher rates; stablecoin issuers collect USD and mint tokens on blockchain. The money they hold is their profit source.
Circle (USDC issuer): Operates conservatively, investing funds primarily in low-risk assets like U.S. Treasuries and cash to maintain 1:1 USD peg.
Tether (USDT issuer): Adopts a more aggressive model, currently holding $100 billion in reserves. Interest income alone exceeds $4 billion annually. Net profit reached $13.7 billion in 2024, with a staggering 99% profit margin.
Tether’s asset portfolio extends beyond cash and Treasuries to include Bitcoin, equity investments, and ventures spanning payment infrastructure, renewable energy, artificial intelligence, and tokenization. In many ways, Tether has evolved beyond a simple stablecoin issuer, resembling a top-tier investment bank and asset management giant.
III. The “Stablecoin Wars” Among DeFi Protocols
Once the profitability of the “money printing model” became apparent, countless imitators emerged. Numerous DeFi protocols joined the stablecoin fray:
MakerDAO’s DAI: One of the earliest successful decentralized stablecoins
Innovation: Pioneered the inclusion of U.S. Treasury bonds in reserves, once holding over $1 billion in short-term Treasuries.
Revenue Distribution: Surplus income flows into a surplus buffer, subsequently used to repurchase and burn MKR governance tokens. MKR transcends mere “governance voting rights,” directly linking to cash flow to become a “equity-like token” with tangible value.Frax: A Small, Focused “Precision Money Printer”
Frax operates at a modest scale, with its circulating supply consistently below $500 million, yet its design is exceptionally refined.
Revenue Distribution:
A portion is used to burn FRAX tokens, maintaining scarcity;
A portion is distributed to stakers, enhancing user retention;The remainder is invested into the sFRAX treasury, which tracks the Federal Reserve’s interest rates, effectively offering users a product that “follows U.S. Treasury yields.”
Though its scale pales in comparison to Tether, Frax still generates tens of millions of dollars in annual revenue, exemplifying “small size, high efficiency.”
Aave’s GHO: An Extension of DeFi Lending
The renowned lending protocol Aave launched its own stablecoin, GHO, in 2023.
Model: Interest paid by users borrowing GHO flows directly into the Aave DAO, not external institutions.
Revenue Distribution:
Approximately $20 million in annual interest income;
Half is distributed to AAVE token stakers, while the other half remains in the DAO treasury for community governance and development.GHO currently has a market cap of around $350 million, but its core logic lies in deeply integrating the stablecoin with lending operations to form a “vertically integrated ecosystem.”
It can be said that each stablecoin protocol is trying to build its own private money printing machine.
IV. Hidden Concerns: Are They Truly Stable?
While stablecoins reduce cross-border transaction costs and enhance efficiency, they harbor significant risks:
Anchored assets are not absolutely stable: Tether's reserves include Bitcoin, which could cause the stablecoin to “de-peg” during sharp price fluctuations.
Revenue distribution lacks transparency: Many protocols claim income will fund token buybacks or rewards, yet the actual process remains a “black box.”
Hedging strategies carry risks: Futures-based hedging models cannot theoretically guarantee 100% security.Compared to state-backed currencies, private stablecoins inherently possess limited “credibility.”
V. Why Is Tether Valued at $500 Billion?
Given these risks, why is Tether valued at $500 billion?
The answer lies in stablecoins becoming foundational infrastructure for the digital age.
They serve not only as payment and settlement tools but also integrate into lending, trading, and RWA (Real-World Asset Tokenization) scenarios, creating new channels for global capital flows. Tether’s high valuation fundamentally reflects market expectations for the future of RWA.
Of course, the implementation of regulatory compliance remains the critical factor determining how far stablecoins can go.
Stablecoins, seemingly just a cornerstone of the cryptocurrency market, are in fact a new form of “coinage power” within the financial system. Whether it’s Tether’s $500 billion valuation or the flourishing DeFi protocols, both remind us: the monetary landscape of the digital age is being quietly rewritten.
