Rob Hadick, General Partner at Dragonfly, predicts stablecoins could grow tenfold as payments adoption accelerates. Hadick argues this growth is driven by stablecoins' ability to compress legacy payment infrastructure and reduce dependency on intermediaries. The market is shifting from a reserve yield model to a payments-focused approach, with major issuers Tether and Circle investing heavily in payment ecosystems and infrastructure rather than relying solely on interest income from reserves.
Tether and Circle Shift Investment Strategy Toward Payments Infrastructure
Tether and Circle have begun transitioning from asset management models to payment-focused strategies. Hadick pointed to Tether's investments in companies and ecosystems such as Whop, Transfi, Rumble, and Plasma. Circle has launched the Circle Payments Network and Arc. "Going forward, both have started investing heavily in moving from asset management models to payment models," Hadick said. These moves indicate that the largest issuers understand the limits of being purely reserve-backed asset managers.
Hadick Identifies Full-Stack Consolidation in Stablecoin Market
Hadick believes stablecoins create room for a new kind of company that blends several financial functions into one. "Stablecoins collapse the legacy payment infrastructure and reduce the dependency on intermediaries," Hadick said. "When you're a stablecoin native, everything is just a book transfer." He envisions companies issuing their own stablecoin, serving users directly, handling merchant settlement, and performing identity, fraud, and compliance checks on an open ledger. "You don't need both an issuing and merchant bank," Hadick said. "You don't need the card network if the merchant and consumer are already known to the provider. You don't need the network to facilitate clearing and settlement."
Investment Opportunities and Risks in Stablecoin Sector
Hadick pointed to an estimate from McKinsey that stablecoins account for roughly 3% of cross-border payments, up from almost nothing a year earlier. He is skeptical of aggregated API platforms that simply wrap or connect third-party services without taking on compliance or operational risk themselves. "They call themselves 'Plaid for stablecoins,' forgetting that blockchains already solve many of the original pain points Plaid solved for traditional banking," he said. Hadick also sees risk in consumer fintech, noting that stablecoin infrastructure makes it easier than ever to launch a neobank or payment app, creating a crowded field. Established brands such as Nubank, Robinhood, and Revolut can add stablecoin features to existing user bases, making it difficult for new consumer startups to stand out.
FAQ
What did Rob Hadick predict about stablecoin market growth?
Rob Hadick, General Partner at Dragonfly, predicts stablecoins could grow tenfold. He stated, "Stablecoins are here to stay. I think they're going to grow tenfold." This growth projection is tied to accelerating payments adoption and the expansion of stablecoins beyond reserve-backed asset management into payment infrastructure.
How are Tether and Circle changing their business strategies?
Tether and Circle are shifting from reserve yield models to payment-focused strategies. Tether has invested in Whop, Transfi, Rumble, and Plasma, while Circle launched the Circle Payments Network and Arc. Hadick noted that "both have started investing heavily in moving from asset management models to payment models," indicating a strategic pivot toward owning payment flows and infrastructure rather than relying solely on interest income from reserves.
What percentage of cross-border payments do stablecoins represent according to McKinsey?
According to an estimate from McKinsey cited by Hadick, stablecoins account for roughly 3% of cross-border payments, up from almost nothing a year earlier. This represents a significant increase in stablecoin adoption for international payment flows.
