Original Title: The Stablecoin Trap: Issuing a Stablecoin Without the Infrastructure to Run One
Original Author: Kash Razzaghi, Circle
Translated by: Peggy, BlockBeats
Editor's Note: As regulatory clarity increases and institutional players enter the space, stablecoins are evolving from technical tools into critical financial infrastructure. This article highlights that issuing a stablecoin is not merely a technical decision, but a long-term strategic choice involving trust, liquidity, and compliance capabilities. Most projects fail before achieving scale, and the market is naturally consolidating around a few mature networks. For most businesses, the real question is not "whether to issue a coin," but rather "how to effectively utilize stablecoins" to create growth opportunities for their operations.
The following is the original text:
In recent months, I've repeatedly engaged in a familiar conversation with executives from some of the world's largest companies. They've shown strong interest in stablecoins that can be transferred almost instantly across borders, such as USDC and EURC—digital versions of the U.S. dollar and the euro. Many of them are also contemplating: Should we issue our own stablecoin?
This enthusiasm is understandable. The market has already demonstrated real scale and sustained growth momentum. From January 1, 2025, to December 31, 2025, the total market capitalization of the stablecoin market grew from approximately $205 billion to over $300 billion. USDC issued by Circle remains one of the core assets in this category, closing the year 2025 with a market capitalization exceeding $75 billion.
But before actually entering the market, every company should first ask itself a question: Do you merely want to use stablecoins for your business, or do you actually intend to enter the business of "issuing stablecoins"?
This is not a technical issue, but a strategic one: is issuing currency central to your business model?
By comparison, creating a stablecoin on a blockchain is actually the easiest part. Fundamentally, it's just a software engineering task: writing and deploying a blockchain-based token contract. With an engineering team, or in some cases with the help of white-label partners, a token can be launched in a relatively short time. However, once the product is officially operational, running a stablecoin means supporting a financial infrastructure that operates 24/7, without interruption.
To operate a trustworthy, regulated stablecoin that meets the expectations of institutions, regulators, and millions of users, real-time reserve management across different market cycles is essential. This includes daily reconciliation with multiple banking partners, independent audits, and compliance and regulatory reporting across multiple jurisdictions. It also means building a 24/7 operational framework for compliance, risk control, capital management, and liquidity. There must be clear escalation and resolution mechanisms in place for stress scenarios, and a zero-tolerance policy for errors. These capabilities are not something that can be outsourced once and then ignored; as the scale grows, the costs, complexity, and reputational risks will continue to accumulate and magnify.
From a systemic perspective, every new, closed proprietary stablecoin further fragments liquidity and trust. Each issuer redundantly builds reserves, compliance systems, and redemption channels, which in turn weakens the overall depth and resilience that stablecoins rely on during times of stress. In contrast, connecting to USDC integrates liquidity, standards, and operational capabilities into a widely adopted unified network from day one.
For executives evaluating this decision, the differences between these two paths become particularly clear when viewed from an operational perspective:
The Temptation of Taking Shortcuts
Currently, a large number of new entrants—from fintech companies and payment institutions to cryptocurrency projects—are exploring or directly launching their own stablecoins. The growth of the stablecoin market by 2025 reflects not only the gradual clarification of the regulatory environment but also the rising interest from institutional players. However, the reality is that although hundreds of stablecoin projects have already been launched, approximately 95% have never truly achieved lasting, global-scale adoption.
Some people believe that the same economic returns can be replicated without incurring heavy operational costs. Reality, however, is far from romantic. Whether issuing stablecoins independently or through white-label services, you enter an industry where survival hinges on trust, liquidity, and scale.
Sometimes, the cost of making a mistake is measured in the "trillions." According to media reports earlier this year, a token issuer accidentally minted 30 trillion dollars' worth of tokens due to an operational error. Although the issue was fixed within minutes, it was enough to make headlines. Another incident involved a well-known stablecoin briefly losing its peg during a period of intense market volatility, once again highlighting that even minor infrastructure flaws can be amplified and cascaded under pressure.
These events serve as a reminder that the stability of stablecoins depends on operational rigor, especially under high-pressure conditions. Markets and regulators are watching closely.
Trust is the true network effect.
Anyone can create a token on a blockchain. In fact, there are already tens of thousands of them—most of which are created within minutes and just as quickly forgotten. Even in the stablecoin niche, over 300 projects have launched, but only a handful truly carry almost all the real-world usage and value; the vast majority, about 95%, have never been truly successful.
The difference lies not in the technology, but in scale and trust. The real challenge for stablecoins begins during the expansion phase: as transaction volumes grow across different markets and cycles, how can liquidity, redemption capability, compliance, and system availability be consistently maintained?
You can mint a token in a few minutes, but you cannot build trust in the same amount of time. Trust stems from transparency, scale, and consistent redeemability across market cycles, accumulating continuously in the process. This is precisely why the stablecoin market eventually consolidates into a few issuers — and why, as of January 30, 2026, USDC's cumulative historical settlement volume has exceeded $60 trillion.
Better to choose cooperation than to reinvent the wheel.
For most businesses, the right question is not "How should we issue our own stablecoin?" but rather "How can we integrate stablecoins into our operations to unlock new growth?"
With USDC and EURC, businesses can embed digital dollars and euros today, enjoying near-instant settlement, global reach, and interoperability across dozens of blockchains, without having to manage reserves or deal with the complexities of regulatory compliance themselves.
Write the next chapter together
The stablecoin industry is entering a new phase. Regulators are establishing clearer rules, institutions are raising their own standards, and the market is gradually converging on a simple consensus: trust, liquidity, and compliance are the true moats.
The goal is not to have more stablecoins, but rather fewer yet better stablecoins—ones that can meet current demands with shared liquidity, transparent reserves, and performance proven across multiple cycles.
For institutions developing a stablecoin strategy, the first step should not be deciding "what to build," but rather "who to build with." If you want a stablecoin to empower your business without becoming a stablecoin issuer yourself, the time-tested choice is clear: reach out to Circle and use USDC.
Click to learn about BlockBeats' job openings.
Welcome to join the official Lulin BlockBeats community:
Telegram Subscription Group:https://t.me/theblockbeats
Telegram discussion group:https://t.me/BlockBeats_App
Official Twitter account:https://twitter.com/BlockBeatsAsia