Cover image source: Modern Times (1936)

Text: Sleepy.txt

Bridge, the stablecoin issuance platform under Stripe, one of the largest online payment infrastructures globally, has launched the native stablecoin MetaMask USD (mUSD) for the wallet application MetaMask, which has over 30 million crypto users.

Bridge is responsible for the entire issuance process from reserve custody, compliance audits to smart contract deployment, while MetaMask focuses on refining the frontend product interface and user experience.

This cooperative model is one of the most representative trends in the current stablecoin industry, as more and more brands are choosing to outsource the complex issuance processes of stablecoins to specialized 'contract manufacturers,' just as Apple has outsourced iPhone production to Foxconn.

Since the birth of the iPhone, Foxconn has almost always undertaken core production tasks. Today, approximately 80% of iPhones are assembled in China, with over 70% coming from Foxconn factories. Zhengzhou Foxconn once accommodated over 300,000 workers during peak seasons, earning the title 'iPhone City.'

The collaboration between Apple and Foxconn is not a simple outsourcing relationship but a typical case of modern manufacturing division of labor.

Apple concentrates resources on the user end, such as design, system experience, brand narrative, and sales channels. Manufacturing does not provide a differentiated advantage; instead, it means substantial capital expenditure and risk. Therefore, Apple has never owned its factories but has chosen to delegate production to specialized partners.

Foxconn, on the other hand, has built core capabilities in these 'non-core' segments. They build production lines from scratch, manage raw material procurement, process flows, inventory turnover, and shipping rhythm, continuously reducing manufacturing costs. In terms of supply chain stability, delivery reliability, and production capacity flexibility, they have established a complete industrial process. For brand clients, this means a foundational guarantee for zero-friction expansion.

The logic of this model is division of labor and collaboration. Apple does not have to bear the fixed burden of factories and workers, nor does it have to take on manufacturing risks during market fluctuations; Foxconn, leveraging economies of scale and multi-brand capacity utilization, extracts overall profits from very low individual profits. Brands focus on creativity and consumer reach, while contract manufacturers handle industrial efficiency and cost management, creating a win-win situation.

This has not only changed the smartphone industry. Since the 2010s, computers, televisions, home appliances, and even automobiles have gradually moved toward contract manufacturing models. Manufacturers like Foxconn, Quanta, Wistron, Jabil, etc., have become key nodes in the restructuring of the global manufacturing industry. Manufacturing has been modularized and packaged into capabilities that can be operated on a large scale and sold externally.

More than a decade later, this logic began to be transferred to an apparently unrelated field: stablecoins.

On the surface, issuing a stablecoin only requires minting on-chain. However, to truly make it operational, the work involved behind the scenes is far more complex than the outside world imagines. Compliance frameworks, bank custody, smart contract deployment, security audits, multi-chain compatibility, account system integration, and KYC module integration require long-term investment in funding strength and engineering capabilities.

We previously detailed this cost structure in (How much does it cost to issue a stablecoin?): an issuing institution starting from scratch often requires millions in initial investment, most of which are non-compressible fixed expenses. After launch, annual operating costs could even reach tens of millions, covering various modules such as legal, auditing, operations, account security, and reserve management.

Today, some companies are beginning to package these complex processes into standardized services, providing plug-and-play solutions to banks, payment institutions, and brands. They may not appear in the forefront themselves, but behind a stablecoin issuance, their shadows are often visible.

In the world of stablecoins, Foxconn has also begun to emerge.

The 'Foxconns' of the stablecoin world

In the past, to issue a stablecoin almost meant having to play three roles simultaneously: financial institution, technology company, and compliance team. Project parties needed to negotiate with custody banks, build cross-chain contract systems, complete compliance audits, and even handle licensing issues in different jurisdictions. For most enterprises, such a threshold is too high.

The emergence of the 'contract manufacturer' model is precisely to solve this problem. A 'stablecoin contract manufacturer' refers to institutions that provide stablecoin issuance, management, and operation services specifically for other businesses. They are not responsible for creating the final consumer-facing brand but provide a complete set of infrastructure needed behind the scenes.

These companies are responsible for building a complete infrastructure from frontend wallets, KYC modules to backend smart contracts, custody, and auditing. Clients only need to clarify which currency they want to issue and in which markets to launch, while other segments can be handled by the contract manufacturer. Paxos played this role when collaborating with PayPal to issue PYUSD: managing dollar reserves, responsible for on-chain issuance, and completing compliance connections, while PayPal only needed to display the 'stablecoin' option in the product interface.

The core value of this model is reflected in three aspects.

The first is cost reduction. If a financial institution wants to build a stablecoin system from scratch, the initial investment can easily exceed one million dollars. Compliance licenses, technology development, security audits, bank cooperation—each segment requires separate investment. The contract manufacturer can standardize processes, significantly compressing the marginal costs for individual clients compared to self-built models.

The second is time reduction. The launch cycle of traditional financial products is often measured in 'years', while a stablecoin project following a fully self-researched path may take 12–18 months to land. The contract manufacturing model allows clients to launch products within a few months. Stably's co-founder has publicly stated that their API integration model can enable a company to complete the launch of a white-label stablecoin in a matter of weeks.

The third is risk transfer. The biggest challenge for stablecoins lies not in technology but in compliance and reserve management. The OCC and NYDFS have very strict regulatory requirements for custody and reserves. For most businesses looking to test the waters, taking on all compliance responsibilities is not realistic. The reason Paxos can secure large clients like PayPal and Nubank is that it holds a New York state trust license and can legally custody dollar reserves and take on disclosure obligations to regulators.

Therefore, the emergence of stablecoin contract manufacturers has changed the industry entry threshold to some extent. The high initial investment that only a few giants could afford can now be split, packaged, and sold to more financial or payment institutions with demand.

Paxos: Turning processes into products, turning compliance into business

Paxos set its business direction early. It does not emphasize branding or pursue market share but builds capabilities around one thing: turning the issuance of stablecoins into a standardized process that others can purchase.

The story begins in New York. In 2015, the New York State Department of Financial Services (NYDFS) opened digital asset licenses, and Paxos became one of the first licensed limited-purpose trust companies. That license is not just symbolic; it means Paxos can custody client funds, operate blockchain networks, and execute asset settlements. Few companies in the U.S. can obtain such qualifications.

In 2018, Paxos launched the USDP stablecoin, with the entire process under regulatory oversight: reserves held in banks, audits disclosed monthly, and the minting and redemption mechanisms written on-chain. Few have learned from this approach due to high compliance costs and slow speed. However, it has indeed formed a clear and controllable structure, breaking down the birth process of a stablecoin into several standardizable modules.

Later, Paxos did not focus on promoting its own coin but packaged this set of modules into services for others to use.

The two most representative clients are Binance and PayPal.

BUSD is a stablecoin service provided by Paxos for Binance. Binance controls the brand and traffic, while Paxos takes on the responsibilities of issuance, custody, and compliance. This model has been in operation for several years until 2023, when the NYDFS required Paxos to stop new minting due to insufficient anti-money laundering reviews. It was only after this incident that the public began to notice that BUSD is issued by Paxos behind the scenes.

Months later, PayPal launched PYUSD, with Paxos Trust Company still listed as the issuer. PayPal has users and a network but lacks regulatory qualifications and does not intend to build its own. Through Paxos, PYUSD can be legally and compliantly launched to enter the U.S. market. This is a representative demonstration of Paxos's 'contract manufacturing' capabilities.

This model of theirs is also being replicated overseas.

Paxos obtained the major payment institution license issued by the Monetary Authority of Singapore (MAS) and used this as a basis to issue the stablecoin USDG. This was Paxos's first complete process outside the United States. It also established Paxos International in Abu Dhabi, focusing on overseas business, and launched the yield-bearing USD stablecoin USDL, using local licenses to avoid U.S. regulations.

The purpose of this multi-jurisdictional structure is straightforward: different clients and different markets require different compliance-ready issuance paths.

Paxos has not stopped issuing. In 2024, it launched a stablecoin payment platform, beginning to undertake enterprise collection and settlement businesses, and also participated in building the Global Dollar Network, aiming to connect stablecoins from different brands and systems to facilitate clearing. It wants to provide a more complete backend infrastructure.

However, the closer to regulation, the more likely it is to be scrutinized. NYDFS has previously singled out its insufficient anti-money laundering due diligence in the BUSD project. Paxos was fined and required to submit rectifications. While this is not a fatal blow, it indicates that Paxos's path is destined not to be lightweight and has no ambiguous space. It can only continuously strengthen compliance and clarify boundaries. It turns every regulatory requirement and every security link into part of the product process. When others come to use it, they only need to attach a brand to issue stablecoins. The rest is handled by Paxos. This is its positioning and a way of doing business deeply tied to technology and regulation.

Bridge: The heavyweight contract manufacturer brought by Stripe

The addition of Bridge marks the first time a true giant has appeared in the stablecoin contract manufacturing space.

In February 2025, it was acquired by Stripe, one of the largest online payment infrastructures globally, processing billions of transactions daily and serving millions of merchants. Compliance, risk control, and global operations—these paths already established by Stripe are now being ported onto the blockchain through Bridge.

Bridge's positioning is straightforward, providing complete stablecoin issuance capabilities for enterprises and financial institutions. It is not merely a technical outsourcing solution but more like modularizing the mature segments of the traditional payment industry into standardized services. Reserve custody, compliance audits, contract deployment, all managed by Bridge, allowing clients to simply call interfaces to integrate stablecoin functions into frontend products.

The collaboration case with MetaMask illustrates this issue best. As one of the largest Web3 wallets globally, it has over 30 million users but lacks financial licenses and reserve management qualifications. Through Bridge, MetaMask can launch mUSD within a few months without spending years building a compliance and financial system.

Bridge's chosen business model is platform-based. It is not tailored for a single client but aims to build a standardized issuance platform. The logic is the same as Stripe's approach to payments, lowering barriers through APIs, allowing clients to focus on their core business. Just as countless e-commerce sites and applications integrated credit card payments in the past, enterprises can now issue stablecoins in a similar way.

Bridge's advantages come from its parent company. Stripe has established a compliance cooperation network globally, facilitating Bridge's entry into new markets. At the same time, Stripe's existing merchant network also constitutes a natural potential customer base. For those who want to try stablecoin businesses but lack on-chain technology or financial qualifications, Bridge provides a ready-made solution.

However, there are also limitations. As a subsidiary of a traditional payment company, Bridge may be more conservative than crypto-native companies, and its iteration speed may not be fast enough. In the crypto community, Stripe's brand influence is also far less than in the mainstream business world.

Bridge's market positioning leans more towards traditional finance and enterprise clients. MetaMask's choice illustrates this point; it needs a trustworthy financial partner, not just a technical supplier.

The entry of Bridge signifies that the stablecoin contract manufacturing business is being noticed by traditional finance. As more players with similar backgrounds join, the competition in this space will intensify, but it will also push the industry towards maturity and standardization.