U.S. 10-year Treasury yields climbed to 5.3%, their highest level in nearly 20 years, and the Federal Reserve has started a rate-hike cycle. In the same week, OUSD officially launched, Citi and Coinbase rolled out a partnership that pushes crypto operations into the banking back end, and community banks in North Dakota embedded stablecoin services into the Fiserv online banking interface through Roughrider. Taken together, financial commentator Wen Hongjun says, those developments show dollar stablecoins shifting from a crypto product into an API inside the banking system.
Wen groups the week’s events into three themes: rates, alliances, and distribution. His central argument is simple. In a high-rate environment, control over distribution matters more than control over issuance.
Higher yields put the stablecoin reserve-income model back in focus
Wen starts with the economics. He describes the stablecoin issuer model as a version of what Warren Buffett has called “float”: users hand over $1, the issuer buys short-dated U.S. Treasuries, and the interest stays within the system.
Under the GENIUS Act framework, issuers cannot directly pay interest to holders. In Wen’s reading, that leaves reserve income concentrated across the issuance-and-distribution value chain. He notes that last year, markets had been pricing in rate cuts, Circle’s stock fell, and investors worried that stablecoin spreads would narrow and weaken the business model. Now, he says, the script has flipped. Long-end yields are at fresh highs, the Fed is raising rates, short-end rates are being pushed up, and stablecoin spread income is expanding rather than shrinking.
He offers a simple example: if a stablecoin ecosystem reaches $300 billion in issuance, every 0.5 percentage point increase in short-term Treasury yields would add $1.5 billion in annual income across the value chain. That pool of money, he writes, is what issuers, exchanges, wallets, payment firms, and banks are all trying to capture.
That is why, in his view, distribution becomes more important than issuance when rates are high. Wen says the revenue-sharing structure between Coinbase and Circle, discussed in earlier pieces in his series, already showed the bargaining power of distributors. This week’s OUSD launch, he argues, pushes that logic up to the alliance level.
OUSD and Citi-Coinbase show crypto moving into the background
Wen says OUSD is built around two key features: zero-fee minting and redemption, and reserve-yield sharing with alliance partners. In his description, OUSD is not trying to beat USDC on brand recognition. It is turning spread-sharing into a core alliance rule so that more than 140 institutions have an incentive to distribute it.
That design becomes more attractive as rates rise.
Citi’s partnership with Coinbase points to a different structure. Citi handles fiat inflows, outflows, and payment orchestration, while Coinbase runs the onchain infrastructure. For Citi’s corporate clients, the visible experience is still a dollar payment, only now it moves 24/7 and settles in real time. The blockchain remains in place, but it has moved into the background as an invisible settlement layer.
Wen calls that a critical step. For the past decade, the crypto industry has tried to get users “onchain.” Real mass adoption, he argues, often happens when users do not need to know they are onchain at all.
Roughrider turns stablecoins into a menu option for community banks
The third development, Wen says, is the easiest to miss and the most revealing. According to documents filed by VersaBank, the Roughrider stablecoin in North Dakota has officially gone live. He lays out the stack as follows:
- Issuance and reserve management: VersaBank USA NA
- Infrastructure: Fireblocks, running on Solana
- Bank interface: Fiserv Commercial Center, the corporate online banking platform banks already use
- Coverage: more than 90 financial institutions in North Dakota
- Current use case: primarily interbank fund transfers
Fiserv has also said that its digital asset platform is now officially available to financial institution clients.
For Wen, the implication is that core processors are the real distributors. The U.S. has more than 4,000 banks, and most of them are small community banks and credit unions. Those institutions generally do not have the capacity to maintain blockchain engineering teams, nor can they easily evaluate which chain, custodian, or issuer to use. Their core banking systems are largely outsourced to a small group of providers such as Fiserv, FIS, and Jack Henry.
Once Fiserv adds stablecoins to the interface bank staff already use every day, adoption stops being a strategic decision and becomes a menu choice. Wen writes that community bank employees do not need to learn what Solana is or how an MPC wallet works. They open the familiar Fiserv screen, see one more option next to “transfer,” click it, and the task is done.
He compares that path with the way ACH and Zelle spread through the U.S. banking system: not because every bank built its own version, but because core system providers rolled the service out at scale.
Citi’s back end and Fiserv’s menu point in the same direction
Wen sees a symmetry between the Citi-Coinbase arrangement and Roughrider’s integration with Fiserv.
At the top end of the market, a global bank such as Citi moves crypto operations into the back office and hands them to a specialist partner like Coinbase. At the lower end, small banks in North Dakota treat stablecoins as a module inside the core system and hand that function to Fiserv. Large banks and small banks, he says, are moving along the same path: stablecoins are no longer a new product customers need to understand, but a packaged financial function.
He also notes that Fiserv itself appears on OUSD’s partner list. That could mean the spread-sharing model behind alliance-based stablecoins may eventually flow through Fiserv’s core systems into thousands of community banks. In Wen’s framing, the alliance structure at the top and the distribution channel at the bottom connect at the Fiserv node.
Why Wen calls this the era of the “bank API”
Wen defines an API as a standardized interface: users do not need to know how the underlying system works, they just call a function and get a result.
He argues that dollar stablecoins are starting to look exactly like that. In his framework, the core functions are:
- Mint: turn deposits into onchain dollars
- Transfer: enable 24/7 real-time settlement
- Redeem: convert back into bank deposits
Those three actions are being wrapped into standard interfaces by core processors, global banks, and payment networks. The result, he says, is that banks do not need to become crypto companies. They only need to call a stablecoin API.
If that happens, the value chain becomes easier to read. Base-layer public blockchains start to resemble utilities, competing on performance and cost. Issuers become more interchangeable, with zero-fee mint and redeem likely turning into a standard feature. Distribution and interface layers, by contrast, hold the customer relationship and the reserve-income split, which makes them the strongest position in a high-rate era.
From Hayek to distribution warfare
Wen ties the argument back to Friedrich Hayek’s The Denationalisation of Money, a recurring reference point in his series. Hayek’s ideal was competition among private currencies, with the best money winning out. What is happening now, Wen writes, is a modified version of that idea: private dollars are competing, but the decisive battleground is not the quality of the money itself. It is distribution.
In his view, each stablecoin is pegged 1:1 to the dollar and backed by short-term debt, so product differences are limited. The real distinction lies in which one gets placed inside the screen bankers open every day.
He does not see that as a failure of Hayek’s framework. He sees it as a new phase, one where monetary competition has become competition over channels.
What this could mean for Taiwan
Wen closes by turning to Taiwan. He says he argued in the eighth article of the series that a retail New Taiwan dollar stablecoin still lacks a clear near-term use case, and he maintains that view. Roughrider, however, offers a different reference point: for smaller financial institutions, the entry point for stablecoins may not be retail payments but interbank settlement and core-system integration.
He adds that the central bank may still prefer deposit tokens to fill that role.
Taiwan also has a large number of local financial institutions and credit cooperatives, and their information systems rely heavily on shared platforms and a small number of core providers. If Taiwan eventually pushes tokenized deposits or institutional stablecoin use, Wen says, the more efficient route may not be to have each bank build separately or begin with virtual-asset custody pilots. It may be to let shared infrastructure roll the service out once, so adoption becomes a menu option.
That, in his words, is the question many countries should be asking: not how to create another coin, but how to turn money into callable financial infrastructure.
His conclusion
Wen ends by saying that rising Treasury yields and higher federal benchmark rates have made stablecoin spreads a contested prize again; OUSD is using revenue-sharing rules to win distributors; Citi is moving crypto into the back end; and Fiserv is turning stablecoins into a menu option for community banks.
All four developments point to the same conclusion, he writes: the next phase for dollar stablecoins is not getting more people onchain, but connecting banking systems to the chain without users noticing.
Once stablecoins become APIs, Wen says, the real competition begins.