Introduction: Stripe's acquisition of the stablecoin API infrastructure Bridge for $1.1 billion is the largest acquisition in the history of cryptocurrency.

PayFi is just a new name for stablecoin payments. Just like how a company that was called intention trading last year is now called AI agent. Essentially, PayFi is still in the USDT business. However, how to absorb a large amount of real USD still requires solving local compliance and expanding the use cases of stablecoins. Whoever can manage these two will be able to share the USDT cake. This market is huge, different stablecoin companies will have their own resource range, and the final shape will be that I can manage the EUR relationships, you can manage the USD relationships, and there will be a channel fee for settlement between us. Or it may be acquired and merged into a unicorn.

For example, EUR->USDC->USD. In this process, however, the liquidity exchange pools for EUR/USDC and USDC/USD still need to be managed by oneself. What is the difference between managing this liquidity exchange pool and the EUR/USD pool?

  1. EUR/USD exchange involves cross-border entity transfers, which have slow processing times and require going through Visa and similar services. If we break it down into EUR/USDC and USDC/USD pools, the first pool is in Europe, and the second pool is in the United States, so there will be no cross-border transfers involved, saving on fees.

  2. Operating the EUR/USDC and USDC/USD pools myself incurs costs. Because if the amounts in the two pools are different, I need to transport them through Visa myself. But the benefit might be that a single large transaction is cheaper than multiple small ones. This requires economies of scale to make a profit.

  3. The most profitable scenario is when users only need to exchange fiat currency for stablecoins, and the stablecoins can be used for direct payments without needing to convert back to fiat for consumption. In this way, it is equivalent to holding the user's real USD and printing stablecoins on the chain (fake dollars). Real USD can yield income from US Treasury bonds, etc.

  4. DeFi improves the capital efficiency of idle assets and is also a way to absorb real USD from users. By utilizing the scarcity of on-chain stablecoins (the core still needs to expand the use cases of stablecoins), lending can be conducted.

  5. For people without bank accounts, providing stablecoins can also be a way to gather funds.