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This week, two developments highlight an increasingly important divide in the stablecoin industry: who captures the economics of digital dollars, and who controls their distribution.
Recap on the two headliners this week:
SS #149 - Tether Doubles Its Reserve Buffer
SS #150- OUSD Gives Partners the Yield
Tether has nearly doubled its reserve surplus to $7.95 billion, reinforcing its position as one of the most profitable financial intermediaries in the digital asset economy. Meanwhile, the OUSD consortium, backed by major payment and technology players, is pursuing a different strategy: distributing economic benefits to the institutions that bring liquidity, transactions and adoption to its network.
The contrast is significant. Tether demonstrates the profitability of a reserve-driven issuance model, while OUSD is testing whether sharing those economics can create a more competitive distribution network.
As stablecoins become embedded in mainstream financial infrastructure, competition is shifting beyond issuance and circulation toward ownership, incentives, governance and institutional distribution.
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The stablecoin industry is entering a new phase of competition, where the largest reserve balance sheet may no longer guarantee the strongest long-term competitive advantage.
Tether’s financial performance illustrates the economic power of scale. With $183.5 billion in liabilities and $132.4 billion in Treasury bills, its business generates substantial income from assets backing non-interest-bearing digital dollars. Its $7.95 billion reserve surplus provides an additional financial cushion, although the increasing contribution of Bitcoin introduces greater exposure to market volatility.
OUSD represents a different competitive philosophy. Rather than concentrating reserve economics at the issuer level, its proposed structure rewards institutions that provide liquidity and transaction flows, including through equity incentives. By aligning the financial interests of payment networks, merchants and distribution partners, OUSD aims to make network participation more attractive than traditional issuer-led arrangements.
We see three structural implications for the industry.
First, distribution is becoming as valuable as issuance. Stablecoin issuers have historically benefited from retaining reserve income while relying on exchanges, wallets and payment providers for circulation. OUSD challenges this arrangement by allowing distribution partners to participate more directly in the economics of the network.
Second, reserve management is becoming a systemic financial consideration. Tether’s Treasury holdings are comparable to those of major sovereign investors, creating a growing connection between stablecoin liquidity, short-term US government debt and global dollar demand. As these balance sheets expand, their asset composition and redemption mechanisms will attract greater institutional scrutiny.
Third, stablecoin competition is converging with traditional financial infrastructure. The participation of Visa, Mastercard, Stripe and Coinbase in the reported OUSD consortium signals that payment networks increasingly view stablecoins as strategic settlement infrastructure rather than simply another digital asset.
For Onigiri, the investment opportunity extends beyond individual stablecoin issuers. We see growing relevance in infrastructure that enables interoperability, liquidity orchestration, compliant distribution and settlement across competing digital-dollar networks.
The next generation of stablecoin winners may not be those that issue the most dollars, but those that control how those dollars move.
Major Stablecoin Issuers
Mixed
Tether benefits from scale and reserve profitability, while OUSD’s incentive structure could pressure issuers to share more economics with distribution partners.
Banks & Financial Institutions
Positive
Banks gain opportunities in custody, reserve management, liquidity provision and institutional distribution, although deposit competition remains a concern.
Regulators
Mixed
Greater institutional participation supports oversight, but concentrated reserves, equity-linked incentives and governance structures introduce additional regulatory complexity.
Corporates & Enterprises
Positive
More competitive payment networks could lower transaction costs, improve settlement speed and create stronger incentives for enterprise adoption.
Retail Users & Crypto Natives
Mixed
Greater competition may improve accessibility and costs, although institutional incentives may not translate directly into better consumer economics.
Developers & Protocol Founders
Positive
Competing networks create demand for APIs, interoperability, programmable settlement and embedded financial applications.
Institutional Investors & VCs
Positive
New opportunities emerge in distribution infrastructure, reserve services, compliance technology and cross-network liquidity management.
Infrastructure & Service Providers
Positive
Payment processors, custodians, compliance platforms and liquidity providers benefit as stablecoin networks become more integrated with financial institutions.
DAOs & Governance Communities
Mixed
Institutional governance may improve operational accountability but reduce the influence of open, community-led governance models.
1. Tether’s Growing Reserve Buffer Strengthens Its Position, but Changes Its Risk Profile
Tether’s latest reported financials demonstrate the strength of its reserve-backed business model. With $191.5 billion in assets against $183.5 billion in liabilities, the issuer reported a $7.95 billion surplus, nearly twice the $4.1 billion reported in June. Its $132.4 billion Treasury bill portfolio also places it among the world’s largest holders of short-term US government debt.
However, the composition of that financial strength matters. Tether’s profitability remains heavily influenced by interest income, with $4.5 billion in reported profit over the first nine months of 2026. Lower interest rates would reduce the earnings generated on newly invested or maturing reserves, potentially slowing future surplus accumulation. Meanwhile, Bitcoin reserves have increased to $8.37 billion, introducing additional market sensitivity to its financial position.
The distinction between reserve backing and excess capital is important. Treasury bills support redemption liquidity, while the surplus provides a cushion against losses. Bitcoin price volatility can affect that cushion, although the extent of the impact depends on the accounting treatment, asset allocation and other reserve exposures.
For institutions, Tether’s growing scale creates a dual consideration: stronger reported financial resources alongside greater demand for independent assurance, transparent risk management and credible redemption arrangements.
2. OUSD Challenges the Traditional Issuer-Centric Profit Model
OUSD’s proposed economics represent a more direct challenge to established stablecoin business models than another competing dollar token.
Under the reported framework, Open Standard would charge just 0.1 basis point on payment volume, capped at $0.01 per transaction. Founding partners have reportedly committed more than $1 billion each in near-term liquidity, while qualifying partners holding or facilitating at least $50 million in OUSD activity may participate in an annual equity incentive pool.
This structure attempts to convert distribution partners into economically aligned stakeholders. Rather than relying solely on transaction fees or bilateral revenue-sharing agreements, it rewards institutions for contributing to network liquidity and adoption.
The strategy could be particularly attractive to payment networks, large merchants and financial technology platforms that already control substantial customer relationships. However, the incentive mechanism also raises governance questions. A 5% ownership cap limits individual concentration but does not necessarily prevent coordinated influence among major partners.
The long-term test is whether OUSD can create genuine network effects without sacrificing economic sustainability, operational neutrality or fair access for smaller participants.
3. Stablecoin Competition Is Becoming a Competition Between Financial Networks
The two developments illustrate different approaches to building durable stablecoin ecosystems.
Tether benefits from existing liquidity, widespread acceptance and established demand, particularly in emerging markets. OUSD is attempting to establish adoption through institutional partnerships, attractive economics and integration into existing payment infrastructure.
These approaches are not mutually exclusive. Issuers with strong reserve income may increasingly offer distribution incentives, while consortium-backed networks will still need credible reserves, reliable liquidity and sustainable economics.
We expect competition to develop across three layers: reserve issuance and management, institutional distribution and settlement, and application-level financial services. As stablecoins become more interchangeable at the user interface, the ability to route payments efficiently across networks may become increasingly valuable.
This creates a compelling opportunity for neutral infrastructure providers capable of connecting issuers, banks, payment networks and enterprise customers without depending entirely on a single stablecoin.
Stablecoins are increasingly competing on the economics of financial infrastructure rather than the speculative dynamics traditionally associated with cryptocurrency markets.
Tether’s business resembles a large-scale monetary intermediary, generating income from reserve assets while providing a globally transferable dollar instrument. OUSD’s proposed model more closely resembles a payment network, using economic participation to attract institutions that facilitate transactions and liquidity.
Both models reflect a broader transition: stablecoins are becoming a means of delivering financial services, with competitive advantages increasingly determined by distribution, reliability, governance and cost efficiency.
For businesses, the underlying blockchain may become less important than the ability to settle payments quickly, manage liquidity across markets and access regulated financial counterparties. For financial institutions, stablecoins offer a new infrastructure layer that can complement existing banking and payment systems.
The industry is moving from asking which stablecoin will dominate circulation to asking which financial network can deliver the greatest utility at the lowest sustainable cost.
This is where we expect the next phase of institutional investment and infrastructure development to concentrate.
Interest Rate Sensitivity and Reserve ProfitabilityTether’s substantial Treasury exposure generates meaningful income in a higher-rate environment. A sustained decline in US interest rates could reduce reinvestment yields, placing pressure on profitability and slowing reserve surplus growth.
Reserve Transparency and Independent AssuranceTether’s reported reserve strength does not eliminate the distinction between periodic attestations and comprehensive financial statement audits. Institutional counterparties will increasingly require independently verified financial information, asset-quality disclosure and robust liquidity reporting.\
Market Volatility and Reserve Buffer AdequacyTether’s expanding Bitcoin holdings create additional sensitivity to digital asset prices. A simultaneous decline in reserve investment income and volatile asset valuations could weaken its surplus, particularly during periods of elevated redemption demand.
Sustainability of OUSD’s Incentive StructureOUSD’s low transaction fees and equity-based partner incentives could accelerate adoption, but the long-term funding and economic sustainability of those incentives remain uncertain. Network growth must ultimately support a viable operating model beyond initial partner commitments.
Governance Neutrality and Institutional ConcentrationOUSD’s ownership structure may align major partners while creating conflicts between shareholders, network operators and smaller participants. Clear governance standards will be necessary to preserve neutrality, competitive access and institutional confidence.
Regulatory Fragmentation and Systemic InterdependenceAs stablecoins become more closely connected to Treasury markets, payment networks and banking infrastructure, regulatory requirements will become increasingly consequential. Divergent approaches to reserve assets, issuer licensing, redemption rights and partner rewards could constrain cross-border adoption and create new forms of financial interconnectedness.
Onigiri Capital (onigiri.vc), a US$50 million blockchain-focused investment fund, launched by Saison Capital, the venture arm of Japan’s Credit Saison. Onigiri Capital is on a mission to chart the next chapter of finance and invest in seed and Series A blockchain startups in stablecoins, payments, RWAs, DeFi and financial infrastructure. The fund’s strategy emphasizes connecting startups to Asia’s growing digital asset markets.
If you’d like to discuss or contribute to the next Institutional Lens, contact us at hi@onigiri.vc
Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.
