The stablecoins landscape is undergoing a fundamental shift, with the real advantage no longer lying in token issuance or technical infrastructure, but rather in direct user relationships and distribution networks, according to Christian Catalini, co-creator of Meta’s failed Diem stablecoin and current MIT professor.
The stablecoin market has exploded in recent weeks, with new offerings emerging globally.
AllUnity, a German joint venture between DWS, Galaxy, and Flow Trader, launched a Swiss franc-based token this week. SBI Holdings and Startale Group introduced a yen-pegged stablecoin, while Agant announced plans for a pound stablecoin. Hong Kong also disclosed plans to distribute stablecoin licenses beginning in March.
Meta’s announcement that it plans to launch stablecoin-based payment capabilities in the second half of 2026 marks a significant return to the space after the company’s infamous Libra project collapsed under regulatory pressure in 2019.
However, Catalini emphasized that Meta’s current approach differs markedly from the original Diem vision.
“The once-hyped businesses of stablecoin issuance and orchestration are becoming a commodity,” Catalini said in an interview. “Not just Meta, but also Google, Apple, all of them will be using multiple providers. So I would expect the market to be commodified in the future, rather than a branded stablecoin.”
Meta’s VP of communications, Andy Stone, reinforced this position, stating the move was simply “about enabling people and businesses to make payments on our platforms using their preferred method.” This represents a stark departure from the branded, proprietary stablecoin approach that defined the Diem era.
Rather than competing on tokenization technology or payment orchestration (the coordination of transactions across different blockchains), companies now vie for control of the customer relationship itself. This transition renders the traditional “stablecoin sandwich” payment model, which required conversion from fiat to crypto and back to fiat, increasingly obsolete.
Meta possesses a substantial advantage in this new competitive environment. The social media giant commands direct relationships with approximately 3.6 billion users across Facebook, WhatsApp, and Instagram, according to its latest earnings report. This distribution network represents a moat that competitors struggle to match.
“The real competitive advantage in stablecoins now lies in distribution,” Catalini explained. “Whoever owns the direct relationship with the end user will capture the most value.”
Traditional payment infrastructure providers face both threats and opportunities in this evolving landscape. Card networks like Visa and Mastercard could lose lucrative interchange fees to stablecoin-based transactions, yet they maintain significant distribution advantages through their existing relationships with merchants and consumers.
Catalini suggested that incumbent payment processors can defend their market position by commoditizing both the underlying blockchain rails and stablecoin assets themselves. “If they can commoditize the rails and commoditize the assets, they will be able to defend their business,” he said.
“The commoditization of the assets is inevitable, so the rails are where things will get interesting.”
Stripe, Meta’s long-standing payment partner, appears well-positioned in this environment. The payments processor acquired stablecoin specialist Bridge for $1.1 billion and has developed its own blockchain infrastructure called Tempo. Stripe CEO Patrick Collison joined Meta’s board a year ago, making the company a potential vendor for Meta’s stablecoin initiatives.
However, Catalini raised questions about whether competitors would willingly build on proprietary blockchains, even those marketed as public networks.
“If you are another big payment service provider, would you want to build on Stripe’s Tempo? Probably not,” he observed. “It goes back to the key challenge of making these networks truly open and neutral, which is the entire point of crypto.”
Catalini noted that building on established public blockchains like Ethereum, Bitcoin, or Solana presents more practical solutions to network neutrality concerns than launching proprietary chains.
Recent market developments also seem to support Catalini’s analysis. Several companies have walked away from acquiring stablecoin orchestration platforms, signaling reduced investor appetite for standalone stablecoin infrastructure plays as the market recognizes that distribution and user relationships represent the actual value drivers.
The transition from a stablecoin-focused market to a distribution-centric competitive framework reflects broader maturation within the cryptocurrency industry. Companies now recognize that technical innovation in token creation matters less than establishing and maintaining direct connections with end users willing to transact using stablecoin-based payments on their platforms.
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