Beyond 0–1 and 1–10: How Stablecoin Adoption Grows in the 10–100 Phase

Stablecoins have entered their era of global mass adoption. After their 0-1 ideation phase more than a decade ago, stablecoins spent many years in the 1-10 phase finding product-market fit and scaling beyond the crypto-native community into real-world use cases. Today, stablecoins are in their 10–100 phase – integrating into global payments networks and financial systems.  

In recent months, the U.S. passed the GENIUS stablecoin bill into law, Hong Kong rolled out new stablecoin regulations, Circle debuted on the NYSE with strong performance, and Tether reported a record $4.9B net profit with plans to raise at a $500B valuation. Global regulations are forming to guide progress towards stablecoin institutionalization and mass adoption.  

Yet, despite this progress, we’re still years away from a future where stablecoins and blockchains serve as the foundational technologies powering global finance.  

So, how do we bridge the gap from 10 to 100? At Hivemind, we’re actively funding a wide range of market infrastructure solutions to drive stablecoin institutionalization and mass adoption – starting with those that solve the challenges below.

Bottlenecks to Stablecoin Growth: Fragmentation & Liquidity

Two large bottlenecks exist in stablecoin adoption today that need to be resolved to unlock growth in this phase.  

1. Fragmentation

As the stablecoin sector continues to gain momentum, new stablecoin issuer and infrastructure entrants are fueling greater competition and creating a more fragmented landscape that is becoming increasingly challenging for users to navigate.  

Growth in on/off ramps has created a geographic fragmentation challenge. On/off ramps are highly localized businesses that require legal entities, licenses, and banking partners in each geography they support. The time, cost, and resource-intensive nature of these businesses creates high barriers to entry that make it challenging for them to scale to new jurisdictions. Additionally, dominant stablecoin on/off ramps in key geographic markets have received significant funding and M&A deals over the last year (i.e. Stripe’s $1.1B acquisition of Bridge (US), MoonPay’s acquisition of Iron (EU), our portfolio company RD’s $40M Series A2 raise (HK), etc), which has attracted many new localized entrants to this category. Newer entrants see this space as a ‘land grab’ opportunity, with each vying to capture market share in a specific geographic jurisdiction or trade corridor before competitors can beat them to it. This is leading to a crowded, geographically fragmented market that lacks a unified network to connect all of the local participants.

Separately, the growth in stablecoin issuers has led to a liquidity fragmentation challenge. While USDT and USDC make up a combined ~90% of stablecoin market cap today, dozens of new issuers have launched in recent years, each seeking to capture and internalize stablecoin yield. These new entrants compete on yield strategies, incentive and rev-share models, distribution channels, liquidity, reserves, fiat currency pegs, licensing, etc. As they gain market share, they are increasingly fragmenting liquidity across the industry. This fragmentation is creating a confusing, suboptimal experience for users and an operational nightmare for infrastructure providers (payment gateways, exchanges, on/off ramps, etc) that are tasked with supporting a growing number of stablecoin variants.

These geographic and liquidity fragmentation challenges can both be solved with better payment orchestration infrastructure. Orchestration enables seamless payment routing across fiat and stablecoin rails, including the efficient transfer between fiat and stablecoins via on/off ramps and between stablecoin varieties on-chain. Additional orchestration infrastructure is needed to connect the many localized on/off ramps and to aggregate the growing number of stablecoin issuers, so users will ultimately be able to access a unified global network with ample liquidity.

The industry is working to improve orchestration and aggregation in a number of ways, though there is still work to be done. Large players such as Circle, Ripple, Stellar, MoonPay, Transak, BVNK, etc continue to expand their global coverage by acquiring their own local licenses in key markets and growing their networks of regional on/off ramp partners. Meanwhile, emerging players like Atum, Perena, and Ubyx are innovating with new models to aggregate and unify the fragmented orchestration landscape. Atum is building an on-chain clearinghouse that connects long-tail stablecoins with PSPs. Perena aggregates stablecoin liquidity across protocols, offering a single access point to deep, stable markets. Ubyx’s off-ramp network of stablecoin issuers, banks, and fintechs powers payouts directly into users’ existing bank accounts.

2. Capital Efficiency & Liquidity

Global cross-border payments total $190T in volume and are expected to grow to $290T in volume by 2030. Yet, they are riddled with settlement delays and high fees due to two blockers: speed and liquidity. While stablecoins help solve for speed by accelerating the movement of funds between on and off-ramps, real-time liquidity is needed at the on and off-ramps in order to facilitate efficient fiat <> stablecoin transfers. Liquidity challenges can add significant delays and fees. Cross-border transaction revenue totaled $278B+ last year with liquidity fees making up ~40% on average – a $111B+ market ripe for disruption. Fees are even higher in emerging markets with less developed financial infrastructure and instable local fiat currencies, as slippage can lead to higher fees.

Today, there are three approaches to sourcing liquidity – all of which are suboptimal as they are costly and capital inefficient:

• Banks use a correspondent banking network (SWIFT) and nostro/vostro accounts (where domestic banks have accounts at foreign banks, and vice versa)
• Large fintechs use prefunding (they park idle capital in accounts in each market they support)
• Fintech startups resort to working-capital loans that are only accessible in their local jurisdictions

Thankfully, there are a couple emerging on-chain projects tackling the opportunity to provide more capital efficient liquidity for cross-border payments. However, we believe Zynk stands apart as the most capital efficient and risk-minimized on-demand liquidity solution on the market, which is why we recently led their seed round.

Zynk sits in the middle of the stablecoin sandwich, connecting local on and off ramps around the world (indirectly helping to solve the orchestration needs described above). When a cross-border payment is initiated, Zynk fronts the payout using defi liquidity and gets repaid principal + interest once the payment settles. Zynk’s approach is unique in that it enables efficient lending on a per-transaction basis, so liquidity is available in real time, only when it is needed. Because Zynk only provides liquidity when funds are already in-transit, it also doesn’t take on counterparty or underwriting risk, making it a sustainable long-term solution that can radically improve the costly liquidity processes used today.  

Conclusion: Infrastructure for the End State

The 10–100 phase of stablecoin adoption won’t be about convincing people why stablecoins matter—it’ll be about building the infrastructure to make them work everywhere. As a starting point, this means solving fragmentation via orchestration and aggregation and improving capital efficiency via on-demand liquidity. We believe the winners in this phase will be the infrastructure providers removing existing bottlenecks to enable seamless, efficient global money movement. At Hivemind, we’re investing in these 10-100 infrastructure solutions that will pave the way for a more open, efficient, and interoperable global financial system that is stablecoin-native.

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