Stablecoins have become the closest thing crypto has to everyday money: stablecoin retail-sized transactions surpassed $5.84 billion in August 2025 alone. Stablecoin issuers sit on customer deposits in portfolios that look like money-market funds. Stablecoins’ business model is layered and intertwined with traditional finance.

Below, we explain how stablecoin issuers earn money, manage their assets, and deal with potential risks.

What’s in this article?

• How do stablecoin issuers earn money?
  
• How does the stablecoin model influence stability and liquidity?
  
• How do stablecoin issuers manage their assets?
  
• What risks do stablecoin issuers face?
  
• How Stripe Payments can help
  

How do stablecoin issuers earn money?

Stablecoin issuers earn money through interest on reserves, institutional fees, lending interest, crypto yield, and partnerships and integrations. They create the cryptocurrency, control when it’s minted and redeemed, and manage the assets that are meant to keep every token locked to its target value. When someone buys 100 units of a USD-pegged stablecoin from the issuer, the issuer takes in $100 in cash. That $100 goes into the issuer’s reserves (usually bank deposits or safe investments such as short-term government bonds).

Large stablecoins are typically issued by companies that centrally control this process through a fiat currency. Others use crypto as collateral instead: users lock crypto into smart contracts, a decentralized community governs the rules, and the protocol itself takes on the issuer role. In both cases, though, the job is the same: the issuer must manage assets and rules so the stablecoin behaves like money that doesn’t drift in value relative to the currency peg. The economics of stablecoins are driven by the issuer’s reserve strategy, goals, and partnerships.

Here’s a closer look at how stablecoin issuers earn money.

Interest on reserves

When someone holds a stablecoin, the issuer is effectively holding that person’s cash. Those reserves are placed in safe, interest-bearing assets—usually short-term US Treasurys, cash-equivalent money market funds, or bank deposits. When interest rates rise, the reserves earn money. From 2024 to 2025, Circle’s total revenue and reserve income grew by 66% to $740 million.

Small fees

Large mints and redemptions often carry fees. Everyday users don’t interact with issuers directly, but institutions do, and that’s where fees add up. Small network-level or transaction fees grow significantly when a stablecoin moves tens of billions of dollars in value each day.

Lending interest

Some issuers have used a portion of reserves for secured lending to earn additional yield. For example, the decentralized stablecoin DAI earns revenue from its built-in lending system: users lock collateral, borrow DAI, and pay stability fees into the protocol treasury.

Expanding for yield

Certain issuers diversify reserves with gold, corporate debt, or even Bitcoin to boost returns. More diversification means more yield potential, but also more risk to manage.

Partnerships and integrations

Issuers also make money by expanding where and how their stablecoins are used. Integrations with exchanges, financial technology (fintech) apps, payment networks, and wallets can generate revenue-sharing arrangements and integration fees. These kinds of partnerships often lead to higher overall circulation, which increases reserves and yield.

How does the stablecoin model influence stability and liquidity?

A stablecoin’s behavior in the market (how tightly it holds its peg, how easily it trades, how it responds under pressure) comes directly from the issuer’s model.

These are the three main stablecoin models.

Fiat-backed models

Fiat-backed stablecoin issuers hold cash and short-term assets that match the value of every token. When the peg drifts, large traders can buy discounted tokens on exchanges and redeem them directly for $1. That redemption pathway creates an incentive that usually pulls the price back to the peg.

History shows how this can play out. In 2022, Tether (USDT) briefly traded at 94¢ on some exchanges. Institutions redeemed them at face value, and the price moved back toward $1 as arbitrage closed the gap.

Liquidity is another byproduct of the model. USDT became one of the deepest pools in crypto trading because exchanges integrated it early. USD Coin (USDC) built liquidity by leaning into banking partnerships. The issuer’s relationships shape how widely a stablecoin moves long before traders do.

Crypto-collateralized models

Issuers such as MakerDAO follow a different logic: their collateral is cryptocurrency rather than fiat. Users lock crypto collateral to mint DAI, and the system keeps each dollar of DAI backed by more than a dollar of assets. Over-collateralization absorbs volatility, and incentives encourage users to create or repay DAI when the price drifts.

Algorithmic models

Algorithmic designs tie stability to incentives and secondary tokens rather than reserves. When market confidence shifts, the mechanism can falter quickly. The 2022 TerraUSD crash showed how fast liquidity and the peg can fail when support depends entirely on market psychology.

How do stablecoin issuers manage their assets?

Reserves are the financial engine of a stablecoin. They anchor the peg, fund redemptions, and generate much of the issuer’s revenue. Running those reserves is similar to running a modern treasury desk.

Issuers manage billions in customer funds with a tight set of priorities:

• Safety: Maintain every dollar backing a token.

• Liquidity: Stay ready for redemptions at any moment.

• Yield: Earn steady interest without creating fragility.

Reserves usually sit in cash and short-term high-quality assets, such as overnight and demand deposits, short-term US Treasury bills, and cash-equivalent money market funds. These instruments are ideal because they’re easy to sell and reliably generate interest, especially when rates are rising.

Because their reserves are so large, stablecoin issuers now operate at a scale previously reserved for major money-market funds. By mid-2024, Tether held $97.6 billion in US Treasurys, which placed it among the largest holders of US Treasury bonds.

Decentralized issuers follow the same principles of safety, liquidity, and yield, even if the tactics differ.

What risks do stablecoin issuers face?

Stablecoin issuers operate profitable businesses, but the model comes with structural limits. Revenue depends on trust, regulation, and interest-rate cycles, all of which are factors that issuers influence but never fully control.

Regulatory pressure

Many governments view stablecoins as money-like instruments, which makes issuers natural targets for oversight. Rules around reserve quality, capital requirements, and attestations and reporting continue to develop.

New regulations can have immediate impact. Frameworks, such as the US GENIUS Act and the EU’s MiCA regime, add constraints such as prohibiting interest payments to retail holders and defining which assets qualify as backing.

Interest-rate sensitivity

Reserve yield is the heart of the business, and rising interest rates boost stablecoin profits. A drop in Treasury rates can quickly reduce earnings.

Liquidity and redemption dynamics

Issuers structure portfolios around short maturities to avoid selling assets at a loss. This discipline limits how aggressively they can pursue higher yields. Cash buffers and very short-term Treasurys improve liquidity, but they also cap potential returns.

Market competition

Some major stablecoins are interchangeable, so switching costs are low. If an issuer raises fees, reduces transparency, or has an outage, circulation can shift to competitors quickly. Reputation can become a revenue constraint: a loss of confidence shrinks reserves, which shrinks yield.

How Stripe Payments can help

Stripe Payments provides a unified, global payments solution that helps any business—from scaling startups to global enterprises—accept payments online, in person, and around the world. Businesses can accept stablecoin payments from almost anywhere in the world that settle as fiat in their Stripe balance.

Stripe Payments can help you:

• Optimize your checkout experience: Create a frictionless customer experience and save thousands of engineering hours with prebuilt payment UIs, access to 125+ payment methods, including stablecoins and crypto.

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• Unify payments in person and online: Build a unified commerce experience across online and in-person channels to personalize interactions, reward loyalty, and grow revenue.

• Improve payments performance: Increase revenue with a range of customizable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorization rates.

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Learn more about how Stripe Payments can power your online and in-person payments, or get started today.