Why I Left Web3 Payments: Ground Truths from Putian, Yiwu, and Beyond

Six months of intensive field research across multiple continents changed how I understand the cryptocurrency payment ecosystem. After visiting Putian, Yiwu, Mexico, and emerging markets across Africa and Latin America, I made a counterintuitive decision: to stop building Web3 payment products—not because I lost faith in the sector, but because I finally understood its true structure. The experience revealed something most newcomers miss: Web3 payments aren’t constrained by technology or product design. They’re constrained by something far more fundamental: the architecture of financial infrastructure itself.

This isn’t a pessimistic exit story. It’s a recognition that payment businesses operate on a completely different set of rules than most technology startups understand. It’s also an explanation of where I believe the real opportunities lie in the next phase of blockchain finance.

The Ground Reality: What Putian and Yiwu Actually Revealed About Web3 Usage

When I first arrived in Hong Kong to explore Web3 payments, my thesis was straightforward: cross-border settlement friction is real, Web3 stablecoins could solve it, and building the right product would unlock massive adoption. This assumption survived approximately three weeks of on-the-ground research.

I started in Yiwu, the trading hub constantly cited in industry reports as the poster child for Web3 payment adoption. Then I visited Putian, another key reference point in discussions about stablecoin usage in payment corridors. I also spent time in Shuibei and made a research trip to Mexico. What I found contradicted the narrative of mainline adoption.

Stablecoins absolutely exist in these markets. But their usage pattern looks nothing like what gets reported:

Fragmentation, not standardization. Transactions happen within relationship networks, not through generalized payment rails. Users adopt stablecoins for specific bilateral relationships with trusted counterparts, not because they can connect to any merchant ecosystem.

Hidden, not visible. Actual Web3 payment flows remain largely off-the-books in official statistics. They’re embedded within informal settlement networks that operate effectively precisely because they avoid regulatory scrutiny—for now.

Patchy, not mainline. In Putian, as in Yiwu, stablecoins serve as a workaround layer within existing systems rather than replacing them. They’re complementary to—not competitive with—traditional payment infrastructure.

This pattern repeated across every market I investigated. The actual penetration rate for Web3 payments bears almost no relationship to the noise level in crypto communities and industry reports. What I encountered was not “Web3 payment adoption” but rather “specialized stablecoin use cases within niche corridors.”

The deeper question this raised: if real-world usage is this fragmented, why is the technological feasibility of blockchain settlement even relevant? The constraint isn’t technical anymore. It never was.

The Real Bottleneck: Banking Channels, Not Product Innovation

Between July and September, I shifted from observation to execution. My team and I began actively building payment MVPs and engaging with potential customers: human resources companies, insurance firms, tourism operators, MCN agencies, gaming platforms, cross-border traders.

Their needs were consistent. They all wanted faster, cheaper, more stable fund flows. Payroll settlement, task compensation, B2B payments—these operations are theoretically perfect use cases for stablecoins. The logic is airtight.

But theory collided with reality almost immediately. To move even small volumes, we needed something our product team couldn’t build: a stable, compliant, reliable fiat-to-stablecoin channel.

We attempted partnerships with several established service providers. Their channels failed real-world stress tests. We explored building our own channels. That’s when I learned the essential lesson: this wasn’t a product problem. It was an infrastructure problem.

Establishing and maintaining payment channels requires:

• Long-term banking relationships (not transactional connections, but partnership-level trust built over years)
• Proper licensing structures across multiple jurisdictions
• Sophisticated KYB/KYC compliance systems
• Genuine risk control capabilities, not theoretical frameworks
• Credit line management with actual capital reserves
• Ongoing regulatory communication and alignment

None of these can be acquired quickly. They’re not capabilities that can be learned through intensive startup iteration. They’re institutional assets, typically accumulated only by teams with specific backgrounds, specific timing windows, and specific types of financial infrastructure access.

This realization fundamentally reframed my understanding of the payment business.

Why Payment is a “Water Flow” Business: The Economics of Risk, Not Feature

A mentor offered me a sentence that crystallized everything: “In payments, it’s not about how much you earn—it’s about how much you can lose.”

This shifted my entire analytical framework. I began viewing payment companies not as technology businesses but as infrastructure operators managing capital flows. The metaphor of “water flowing through channels” suddenly made perfect sense.

In this model:

• Whoever controls the channels makes money. This isn’t poetic. It’s literal. The entity controlling the fiat-to-crypto conversion point captures spread value.
• Volume flows through based on channel capacity and pressure. More regulatory certainty, more banking relationships, more compliance certainty = more water flows.
• Profitability isn’t about product features. It’s about sustainable risk tolerance. A company earning 2% on $100 million in compliant volume is more valuable than one earning 5% on $10 million in gray-area volume—because the second one hasn’t yet experienced the losses that will eventually arrive.

What appears to be “profit” in many payment operations is actually a risk premium, not a capability premium. The business is profitable today because nothing catastrophic has happened yet. This is not a sustainable structure.

The payment companies that accumulate genuine long-term value are those that can survive stress testing across multiple dimensions:

• Compliance challenges
• Regulatory shifts
• Fraud incidents
• Black swan liquidity events
• Banking relationship disruption

Most emerging teams haven’t faced these stressors. They haven’t built the organizational muscle to absorb them.

The Structural Mismatch: Assets Your Team Doesn’t Possess

At this point, I had to confront an uncomfortable truth: payment is an excellent business, but only for teams with specific resource endowments.

The payment industry genuinely presents structural opportunities. Consider:

The macro trend is real. Global supply chains aren’t consolidating—they’re fragmenting and interconnecting. Cross-border service trade is accelerating. Remote teams are becoming globally distributed. These trends continuously generate settlement friction that traditional rails don’t efficiently solve.

Web3 can genuinely improve efficiency. Not through “cheaper fees” (that’s a red herring), but through:

• Significant improvement in settlement velocity (critical when you’re managing thousands of daily micro-settlements)
• Transparency in the liquidation process (crucial for audit trails in regulated industries)
• 24/7 settlement capability across currency zones (eliminates the T+2 delay problem)

The opportunity is substantial and multi-decade. This isn’t a 3-year market. This is a 10+ year infrastructure reconstruction across global finance.

But here’s what I couldn’t overcome: success in this domain requires industry-level assets. These aren’t competitive advantages you can build. They’re foundational resources you either possess or you don’t:

• Long-term, trust-based banking relationships (built over decades, often unavailable to internet-native teams)
• Mature compliance infrastructure with proven regulatory track records
• Risk management systems stress-tested across actual crisis scenarios
• Accumulated regulatory credit (the ability to have difficult conversations with regulators and have them trust you)

My team has product innovation capabilities. We don’t have these institutional assets. Building them would require abandoning product development for 5-10 years while accumulating credibility through boring, operational competence.

That’s not a business strategy. That’s a bet against our structural advantages.

Why Web3 Payments Will Be Unsexy, Backend-Driven, and Not a Consumer Revolution

This is perhaps the most important realization: the actual scaling of Web3 payments won’t happen on the user-facing layer. It won’t explode because consumers wake up and start actively using blockchain-based wallets.

It will happen silently, in the back-end systems of enterprises.

The likely path: Keep the front-end Web2. Reconstruct the back-end on Web3.

Large enterprises will gradually migrate their treasury management, reconciliation systems, cross-border settlement paths, and fund pool structures to blockchain infrastructure. Their end users won’t notice anything has changed. The UX remains identical. The backend becomes more efficient, more transparent, more compliant.

This is the “hidden upgrade” pattern. And it requires something completely different from what startups typically optimize for:

Not market education. System stability. Not user adoption. Compliance certainty. Not viral growth. Operational reliability.

The geographic distribution of opportunity is equally important: Asia-Pacific payment rails are already mature. The real structural growth will occur in regions with:

• Severely fragmented payment infrastructure (Latin America, Africa, Middle East, South Asia)
• High friction in existing settlement systems
• Strong user and merchant incentives to migrate

But these same regions carry:

• Complex regulatory variation
• High operational demands
• Deep localization requirements
• Relationship-dependent business models

They demand exactly the infrastructure assets I don’t possess.

From Water Collection to Water Observation: The Pivot

When I made the decision to step back from payment development, I didn’t experience it as a failure. It felt more like reaching the natural endpoint of a learning arc.

I didn’t leave the ecosystem. I simply repositioned my lens.

Instead of standing at the water’s edge, trying to collect and redirect flows, I’m now standing beside it, observing where the capital ultimately flows and what needs emerge once it arrives.

This shift was prompted by another realization: payment solves a problem, but it’s not the final problem.

Payment addresses liquidity—whether money can move and how quickly. But what truly determines long-term value creation isn’t liquidity itself. It’s what happens after the money arrives. Where it’s stored. How it’s managed. What risks it carries.

Look at fintech’s evolution in China over the past two decades. The companies that created genuine scale and defensibility weren’t the ones who “optimized payment.” Yu’ebao, Tiantian Fund, and Tianhong became dominant because they stood behind the payment layer, managing the flows that had already been established.

Payment was the gateway. Asset management was the fortress.

The same pattern is emerging on-chain.

A growing class of on-chain assets has appeared: lending protocols, short-duration RWAs (real-world assets), neutral strategies, yield-generating portfolios. These function like on-chain money market funds, short-term bond allocations, stable value reservoirs.

The problem isn’t “whether assets exist.” The problem is that most participants don’t understand what risks they carry. They lack entry points to properly evaluate, compare, and distinguish between these assets.

As capital continues migrating on-chain, this information gap will become the constraint—not the payment infrastructure itself.

This realization shaped my next direction: instead of competing for control over payment channels, I want to build clarity around what happens after payment. To map the landscape of on-chain assets, identify their risk profiles, and provide transparent evaluation frameworks.

Different waterway. Same ecosystem. Different value creation model.

The Non-Conclusion

I’m sharing this not to draw definitive conclusions about Web3 payments or to advise others toward or away from the sector. The industry genuinely contains structural opportunities.

I’m sharing it to explain one person’s specific decision: why someone who understood both the opportunity and the barriers chose to step back.

If you’re a team considering payment infrastructure development, the key question isn’t “Do I understand the product technology?” It’s “Do I possess the institutional assets this industry requires?”

If you don’t have them, no amount of product innovation will overcome that structural deficit. If you do have them, you’re likely in a position where you don’t need my observations anyway.

For those interested in participating in the evolving Web3 finance ecosystem, the lesson is simpler: the real leverage points aren’t always where the noise is loudest. Sometimes they’re in the quieter problems that emerge once the previous layer has been solved.

That’s where my focus has shifted. And that shift itself might be the most important lesson I learned from six months in Putian, Yiwu, Mexico, and beyond.