While the term "white-label" has come to represent a generic service or an outsourced product, few realize it emerged in the 1960s in reference to the record company practice of putting plain white labels on promotional records. Fast forward a few decades, and the term is now deeply embedded in our economy, touching concepts from servers to groceries, tablets to shoes, software to luxury goods.
Yet hardly anyone expected the term to be applied to money.
In part, this is because we are accustomed to seeing money as a public good, controlled by our government for our benefit. It is neither a product nor a service that can carry a brand, so the term white-label here just doesn't fit.
However, stablecoins are
It therefore is natural that specialists would emerge. The number of platforms promoting the white-label concept for stablecoins in the U.S. is growing and today includes large crypto-native firms such as Anchorage, Paxos and BitGo, new startups such as Agora and Bastion, as well as fintechs such as Stripe via its subsidiary Bridge.
What would a white-label stablecoin issuer do for a business launching its own stablecoin? To start with, it could execute the minting (issuing) and burning (redeeming and destroying) of stablecoins on different blockchains via APIs. It could also handle the on- and off-ramps, know-your-customer/anti-money-laundering compliance and the reserve management via relationships with approved custodians. It could provide wallets if necessary as well as linked cards.
And using the services of a third-party issuer means getting to market fast. Sure, firms could instead adopt one of the existing liquid stablecoins — but then they'd be giving up any potential revenue from interest paid on the backing reserves.
So, it's not hard to see the appeal of white-labelled stablecoins and the potential growth; but legally, the service could trigger some confusion.
Last week, Western Union
Who here is the issuer? Anchorage has a federal national trust bank charter and therefore fulfils the GENIUS Act requirements. Western Union doesn't, nor does it have the necessary approval from the Office of the Comptroller of the Currency. Technically, Anchorage is the issuer — but in the public's eyes, it's Western Union.
An even more complex example is that of Hyperliquid, a decentralized derivatives platform with its own purpose-built blockchain that is evolving into a vibrant ecosystem even beyond derivatives. In September, it
Several well-known crypto names applied, including Paxos, BitGo, Agora and Ethena. Network validators were invited to vote; roughly 70% chose
The Minneapolis-based bank is still exploring stablecoin options outside of custody services, but sees opportunity in trade finance, CEO Gunjan Kedia said at The Clearing House Annual Conference in New York Wednesday.
In this situation, is Native Markets the issuer, or is Hyperliquid? Technically, it's neither: Native Markets farms out the actual minting and burning to Bridge, a subsidiary of Stripe that
But, from a market perspective, it's a Hyperliquid stablecoin. And public perception will matter to the regulators crafting the implementing rules for the GENIUS Act.
What's more, neither Native Markets nor Bridge currently qualify for the status of stablecoin issuer under the GENIUS Act requirements — but Bridge
What does the GENIUS Act say about issuers?
Frustratingly, both a lot and not much. It
Since it's unlikely that regulators will ban the practice when filling in the operational details of the GENIUS Act, we can assume that the "plug-and-play" ease of stablecoin issuance will lead to a sea of dollar-backed tokens.
That sounds chaotic, but it is also how products test market fit. After all, issuance is the easy part. It's getting the needed liquidity that's hard.
As always, there are risks: White-label issuers could face a range of financial, operational or even legal troubles that have nothing to do with the public-facing brand but could damage its trust and balance sheet. Also, locking into one provider could end up limiting expansion options further down the road.
But the temptation to test stablecoins will be strong for large or ambitious smaller entities whose business is mainly online. And when it's relatively easy to do so, the cost of experimentation drops relative to the potential benefit.
This is where the longer-term benefit of white-labelling will shine: bringing down the barrier to innovation. Financial entities, consumer businesses, logistics operators, gaming platforms and more will have less reason not to test new ways of moving value internally, improving user experiences and/or offering new services.
With the technical side taken care of by experts, businesses of any type can focus on their core. The resulting explosion of applications and efficiency will be reminiscent of the explosion earlier this century in software-as-a-service platforms which dragged the economy online — only, with stablecoins issued on public blockchains, companies will not be locked into proprietary technologies.
Going back to what this means for our understanding of money: As I've written before, stablecoins embody the idea of money-as-a-product in the digital economy. With the proliferation of issuers and types of stablecoins, they also embed the idea of money-as-a-service.
