All the time, our customers ask us, "How do you make money doing this?" The answer is simple: Volume. That's what we do.
This is an incomplete list of all the ways stablecoin issuers can make money.
Tethering, as explained here.
Breakage, as with gift cards, to include "trackable" breakage: a non-negligible amount of currency is burned on-chain, for instance by being sent to dead addresses.
Dust. Dust is a softer form of breakage that can be tracked, say in coordination with exchanges.
Blacklisting. Recently amounts totalling about $5MM and $1.7MM have been frozen, at times at the behest of authorities, which belong to hackers and criminals. Disabled or blacklisted coins represent pure profit for the issuer.
Market-oblivious conversions. To fulfill their obligations as issuer, Coinbase offers a very simple and accessible mechanism that always converts USD to USDC at 1:1. This surprised me, since I assumed issuers would prefer to avoid off-market transactions. But by offering this "rigged" market they make money half the time. When the market is against them they at least break even by using their special powers to fulfill their peg, and may increase their float. When the market is in their favor they profit at the expense of the customer by transacting at a worse price. In the securities world, this would violate NBBO/Reg NMS.
Deposits. Much ado has been made about the possibility stablecoin issuers held less than 100% reserves and rehypothecated in things like Bitcoin. That's one way to do it (that's less risky than most people think). However, it is possible to keep 100% reserves on the books for accounting and still generate yield. How do you do that? Well, you don't keep a billion paper dollars in a tower outside. Like everyone else, you put your electronic dollars in a bank, and that satisfies the accountant. What does the bank do? It loans out the money. So it's loaning it out, not you. Maybe it pays you interest. Maybe you own the bank. Maybe you auction the right to hold the deposit. You still have 100% deposits on file.
Influence & Access. With all this money to your name, you can make endorsements, disendorsements, partnerships, select this chain or technology, etc.