The Next Wave of Stablecoins: From General Purpose to Purpose Built

Tether’s USDT and Circle’s USDC dominate the $269 billion stablecoin market, generating billions of dollars in interest from the reserves backing them.

Yet if you already control the customer relationship and the distribution channels, why let Circle and Tether capture all the value?

Banks and Payment Service Providers could issue their own stablecoins, creating new services for customers and a new income stream for themselves.

Current Landscape

At their core, stablecoins represent digitized fiat currency on a blockchain, offering global availability, instant settlement, and the ability to integrate payments into programmable workflows. Their total supply has surged to nearly $269 billion in 2025, up from just $15 billion five years ago, a growth trajectory few other financial instruments can match.

Two U.S. dollar-denominated stablecoins, Tether’s USDT and Circle’s USDC, account for roughly 85% of the market. These “general-purpose” stablecoins were designed for broad accessibility, primarily distributed through crypto exchanges to consumers and businesses worldwide.

Non-USD stablecoins represent only a small share of the market but are beginning to emerge. Offerings such as EURC (euro-denominated) and GYEN (yen-denominated) illustrate early momentum toward currency diversification. Still, the market remains heavily concentrated in USD exposure.

The Case for Purpose-Built Stablecoins

We believe there is an untapped opportunity in creating new purpose-built stablecoins, tokens designed to address the needs of a specific customer segment or transaction type. Unlike general-purpose stablecoins, specialized issuances can embed features that improve efficiency, compliance, or integration with sector-specific workflows.

Examples of such stablecoins include:

• Stablecoins issued by financial institutions which are designed to help their corporate clients optimize global liquidity management. A notable example is JPMorgan’s stablecoin, issued on the Kinexys blockchain.
  
• Stablecoins issued by Payment Service Providers (PSPs) which are designed to streamline merchant payouts across multiple markets. An example is PYUSD, issued by PayPal in cooperation with Paxos.
  
  

Issuing a proprietary stablecoin allows the issuer, whether a financial institution or a PSP, to capture economic value through the interest income generated by the reserves backing the token. At the same time, these stablecoins, like their general-purpose counterparts, enable the creation of novel services for customers.

We would argue that full control in the selection of issuing jurisdiction, blockchain, and on-ramp infrastructure can allow for issuing stablecoins that serve the needs of corporate clients and global merchants better than general-purpose stablecoins, while at the same time minimizing the risks for the issuer.

Importantly, issuing a purpose-built stablecoin also removes dependence on existing players like Circle or Tether to expand functionality. Financial institutions and PSPs do not need to wait for general-purpose issuers to introduce new currencies or extend coverage to new geographies. By issuing their own, they can tailor currency options and infrastructure to customer needs while staying in full control.

How Stablecoins Can Add Value

Consider a multinational corporation seeking to manage liquidity between its headquarters and multiple global subsidiaries, a process that, using traditional banking rails, can be slow, expensive, and operationally complex. Stablecoins offer a superior alternative by enabling instant, low-cost transfers that bypass the constraints of legacy correspondent banking networks.

1. A financial institution provides a Mint, a platform for converting fiat to stablecoins (“minting”) and stablecoins back to fiat (“burning”).
   
2. Headquarters converts fiat to stablecoins via the Mint. Stablecoins are automatically “minted” on Blockchain and sent to the wallet of the HQ.
   
3. The headquarters sends stablecoins over the blockchain, delivering funds to subsidiaries’ wallets instantly.
   
4. Subsidiaries convert stablecoins to local fiat via the local off-ramps connect to the Mint when needed.
5. At the end of each day, surplus liquidity can be returned to HQ using stablecoins. Automatically and instantly.

By replacing slow, fragmented banking processes with instant, programmable transfers, this model delivers tangible financial and operational advantages for corporations. It not only improves the efficiency of moving funds across borders but also unlocks new ways to manage working capital and streamline settlement flows, including:

• Reduced idle balances: Subsidiaries no longer require excess cash buffers.
  
• Real-time liquidity deployment: Funds can be distributed on demand, globally.
  
• Programmable automation: Blockchain and smart contracts enable rule-based transfers with centralized oversight.
  
  

For PSPs, the same architecture enables instant merchant settlements across multiple geographies, bypassing delays in traditional banking systems. Merchants receive stablecoins in near-real time and can convert them to local fiat as needed via a global Mint infrastructure or local off-ramps.

Key Considerations for Issuers

Issuing a stablecoin, whether specialized or general-purpose, involves making strategic decisions in three critical areas that will determine its long-term success: the regulatory environment in which it operates, the blockchain on which it is issued, and the infrastructure that supports its minting, redemption, and integration into the broader financial ecosystem.

Jurisdiction

• Regulatory frameworks for stablecoins vary significantly across markets. Each jurisdiction sets its own requirements around licensing, the types of assets permitted to back reserves, and the frequency and scope of public disclosures.
• Choosing the right jurisdiction not only determines the legal foundation of the stablecoin but can also shape its credibility and adoption potential.

Blockchain Selection

• General-purpose blockchains offer the advantage of tapping into existing infrastructure, such as established connectivity to exchanges, broad developer communities, and liquidity in secondary markets.
• However, purpose-built blockchains, such as Codex, can provide additional functionality, including native FX capabilities, integrated compliance features, and predictable transaction fees that help mitigate operational and financial risks over time.

Mint Infrastructure

• A robust Mint infrastructure is essential for enabling seamless stablecoin issuance and redemption. This typically combines APIs, smart contracts, FX capabilities, reserve management tools, and connections to local banking rails.
• Local on-ramps must have direct access to the Mint to facilitate smooth conversion between stablecoins and fiat in both directions, ensuring that end users can move value efficiently regardless of geography.
  
  

Where Do We Go From Here?

As stablecoin adoption accelerates, issuers that move beyond general-purpose models can carve out defensible niches. By aligning issuance with the specific needs of corporates, PSPs, or other verticals, they can deliver both strategic value to customers and sustainable economics for themselves.

Codex offers an integrated foundation for stablecoin issuance.

• The Codex blockchain is purpose-built for stablecoins, enabling predictable transaction costs, native FX capabilities, and embedded compliance features that reduce operational risk.
• Complementing the core ledger, Codex Avenue provides a “Mint-as-a-Service” model, allowing issuers to deploy fiat on/off-ramps, manage token creation and redemption, and integrate directly with local banking infrastructure through APIs.
• Finally, Codex works with a network of partners that provide issuance, custody, and compliance support for stablecoin issuers.

The stable door is open. The question is: what will you build on the other side? Let’s chat: info@codex.xyz.