The Past, Present, And Massive Future of Stablecoins (...Trillions Coming) - Stably CEO

Corey Huang breaks down a practical stablecoin taxonomy and design playbook—separating payment money from yield while navigating risks, yield-forwarding, and regulation.

Key Takeaways

Stablecoin taxonomy: exogenous (reserve/CDP), endogenous, and hybrid/strategy-backed; payment stablecoins should be full-reserve RBS while strategy-backed hybrids carry hedge-fund-like risks.
Design best practice: keep a non-yielding payment token separate from a yielding savings/investment token to preserve payments UX and simplify regulatory compliance.
Yield-forwarding models: return float and reserve income via merchant rewards, lender incentives, borrower rebates, or subsidies—structure distributions to avoid securities classification.
Regulation trend: policymakers increasingly ban passive yield on payment stablecoins; expect clearer payment vs non-payment definitions and pressure toward fully reserved payment coins.
Monetary mechanics: stablecoins run near full-reserve narrow banking—no bank credit expansion; redemptions reduce circulating supply and underlying reserve liquidity.
Risks vs returns: strategy-backed stablecoins and private credit can raise yield but add principal, security, and liquidity risk; diversify reserve sources and perform strict due diligence.

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