The Next Battle of Stablecoins: The Showdown of Stablecoin Networks

In the second half of 2025, the stablecoin industry entered a new phase.

Over the past few years, companies like Tether and Circle have been key players in the stablecoin race, but their identity has always remained with the issuer. The design and operation of the underlying network have been entrusted to public blockchains such as Ethereum, Tron, and Solana. While the stablecoin issuance scale has been growing, users have always had to rely on other systems to transact.

In recent months, this landscape has begun to change. Circle introduced Arc, Tether almost simultaneously released Plasma and Stable, and Stripe, together with Paradigm, launched Tempo. Three stablecoin public chains focused on payments and settlement have emerged, indicating that issuers are no longer satisfied with just issuing the coin; they want to control the network itself as well.

Such concerted actions are hard to explain as mere coincidences.

Why Build Their Own Public Chains?

Early stablecoins were almost all built on public blockchains like Ethereum, Tron, and Solana. However, today, more and more issuers are choosing to build dedicated chains to firmly control both issuance and settlement.

The most direct reason lies in value distribution. The fees "taken away" by the underlying network are far larger than imagined.

Tether processes over $1 trillion in transactions every month, but a majority of the fees are taken by the public blockchain. On the Tron network, each USDT transfer requires about 13-27 TRX as a fee, equivalent to approximately $3-6 at the current price. Considering the significant transaction volume of USDT on Tron, this is a substantial revenue. If we calculate based on Tron network handling hundreds of millions of dollars in USDT transactions daily, the fee alone could bring the Tron network hundreds of millions of dollars in revenue annually.

USDT is the most active smart contract on the TRON network, Image Source: Cryptopolitan

Although Tether's own profits are also exorbitant, they mainly come from the interest rate spread and investment income, unrelated to the volume of USDT transactions. For each additional USDT transaction, Tether receives zero direct revenue; all the fees go to the public chain's pocket.

The situation is similar for Circle. Every transaction of USDC on the Ethereum network requires ETH to be paid as Gas fee. At the current transaction fee level of Ethereum, if USDC could achieve the transaction volume of USDT, just the fee alone could bring billions of dollars in yearly revenue to the Ethereum network. However, as the issuer of USDC, Circle doesn't get a penny from these transactions.

What's even more frustrating for these companies is that the larger the transaction volume, the more revenue is missed out on. USDT's monthly transaction volume has grown from a few hundred billion dollars in 2023 to now over 1 trillion dollars, yet Tether has always received zero revenue from these transactions.

This "visible but unreachable" situation is the core driver behind their decision to build their own public chains.

Furthermore, the technical limitations of existing public chains have also been accumulating. Ethereum has high fees and slow speeds, making microtransactions impractical; Tron has low costs but its security and decentralization are questioned; Solana is fast but not sufficiently stable. For a payment service operating around the clock throughout the year, these issues are hard to bear.

User experience is also a hurdle. Regular users need to prepare different native tokens and use different wallets when switching between different chains. Cross-chain transfers are more complex, costly, and pose security risks. On the regulatory front, transaction monitoring, anti-money laundering, and other functions on existing public chains mostly rely on external solutions, with limited effectiveness. In terms of competition, differentiation has become a necessity; Circle aims to provide faster settlement and built-in compliance modules through Arc, while Stripe hopes to achieve programmable payments and automated settlement through Tempo.

When the contradictions of value distribution, technical constraints, user experience, regulatory compliance, and competition are combined, building a standalone chain becomes the inevitable choice.

The Endgame of the Giants

Facing these challenges and opportunities, different companies have chosen different technological paths and business strategies.

Stripe Tempo: The Neutral Platform's Technical Choice

Tempo is a dedicated payment chain co-incubated by Stripe and Paradigm. Its biggest difference from traditional public chains is that it does not issue its own native token but instead directly accepts mainstream stablecoins like USDC and USDT as Gas. This decision is both a stance and an ambition.

Image Source: X

This design may seem simple, but the underlying technical challenges are significant. Traditional blockchains use a single native token as a fee, making the system design relatively straightforward. Tempo needs to support multiple stablecoins as fees, which requires implementing a complex token management and exchange rate calculation mechanism at the protocol level.

Tempo's technical architecture is also optimized for payment scenarios. The improved consensus mechanism can achieve confirmation in sub-seconds while maintaining extremely low costs. It also includes built-in payment primitives that developers can directly call to build applications for conditional payments, scheduled payments, multi-party payments, and other complex use cases.

Tempo has built a robust ecosystem alliance. The initial design partners span across key sectors such as artificial intelligence (Anthropic, OpenAI), e-commerce (Shopify, Coupang, DoorDash), financial services (Deutsche Bank, Standard Chartered, Visa, Revolut), and more. This list alone is a signal that Stripe aims to establish Tempo as a cross-industry foundational infrastructure.

Circle Arc: Vertically Integrated Deep Customization

In August 2025, Circle launched Arc, a public blockchain specifically designed for stablecoin finance. In contrast to Stripe's neutral stance, Arc represents a thorough vertical integration strategy.

Image Source: Circle

Arc uses USDC as the native Gas fee token, meaning all transactions on the Arc chain require payment in USDC, directly increasing the demand for and use cases of USDC. This design allows Circle to benefit from every transaction on the network, achieving a closed-loop of value.

Arc also incorporates an institutional-grade FX engine capable of fast exchange between different currency stablecoins, aiming to achieve sub-second transaction finality. These features are designed to meet the practical needs of institutional clients, demonstrating Circle's profound understanding of the target market.

By owning its public chain, Circle provides a more efficient and controlled environment for USDC operations. More importantly, it can build a closed-loop financial ecosystem around USDC, locking the value firmly within its own system.

Tether's Dual-Chain Strategy: An Aggressive Comprehensive Approach

As the world's largest stablecoin issuer, Tether simultaneously launched the Plasma and Stable projects in 2025, showcasing a more aggressive vertical integration stance than its competitors.

Image Source: Bankless

Plasma is a Layer 1 blockchain supported by Tether's affiliate Bitfinex, designed specifically for stablecoin transactions. Its major selling point is providing zero-fee transfers for USDT. This setup directly challenges the Tron network, which has long dominated the circulation of USDT. In July 2025, Plasma raised $373 million in a token sale, demonstrating strong market interest in this public chain.

Compared to Plasma, Stable has a more thorough goal. Tether refers to it as the "exclusive home of USDT," adopting a dual-chain parallel architecture where a main chain handles core settlement while Plasma serves as a sidechain processing high-volume microtransactions and micropayments, settling regularly on the main chain. In this network, USDT serves as both a medium of exchange and a fee token, eliminating the need for users to hold additional tokens to pay gas fees, significantly lowering the barrier to entry.

To enhance flexibility further, Stable has introduced multiple variants of USDT. The standard USDT is used for daily transactions, USDT0 serves as a cross-chain bridging token, and gasUSDT is used for network fee payments. All three maintain a 1:1 value peg, allowing users to exchange seamlessly at zero cost, thereby ensuring a consistent user experience across various scenarios.

In terms of consensus mechanism, Stable has adopted a customized StableBFT. This mechanism is built on the CometBFT engine (an improved version of Tendermint) and falls under the delegated proof-of-stake system. StableBFT separates "transaction propagation" from "consensus propagation," aiming to address congestion issues during high traffic periods and provide a more stable network environment for large-scale payments.

Through the dual-chain combination of Plasma and Stable, Tether has not only addressed the existing network's limitations in terms of fees and stability but has also attempted to build a comprehensive closed-loop ecosystem for USDT encompassing transactions, fees, and cross-chain functionalities.

Tech Giants' Infrastructure Ambitions

Google is also reaching out, setting its sights on the underlying infrastructure of stablecoins through Google Cloud Unified Ledger (GCUL). GCUL is an enterprise-grade blockchain platform designed specifically to facilitate the issuance, management, and trading support of stablecoins for banks and financial institutions.

Comparison of GCUL with Tempo and Arc, Image Source: Fintech America

Its core advantage lies in its deep integration with Google Cloud's existing enterprise services. Financial institutions can quickly launch stablecoin products on GCUL without having to build the infrastructure from scratch. For banks accustomed to using Google Cloud services, this is an almost seamless digital asset solution.

Google's strategy appears particularly restrained; it does not directly engage in stablecoin issuance or payment competition but positions itself as a seller of shovels, providing underlying technology to all players. This choice means that no matter which stablecoin ultimately prevails, Google will reap the rewards.

These dedicated public chains not only replicate the functions of existing blockchains but also make a leap in several key dimensions. Stablecoins originally eliminated the role of banks and have now freed themselves from reliance on public chains like Ethereum and Tron, truly holding the transaction channel in their hands.

They unleash greater programmability; stablecoins are essentially a set of smart contracts. Stripe CEO Patrick Collison once said that programmable payments will give rise to entirely new business models, such as "agent payments" tailored to AI agents. On the new chain, developers can directly invoke built-in payment primitives to assemble complex applications like conditional payments, scheduled payments, and multi-party settlements.

They have also compressed settlement times to near-instantaneous levels. Public chains like Arc aim to reduce confirmation times to sub-second levels. For high-frequency trading, supply chain finance, or even small-value payments in messaging apps, this "what you see is what you get" speed is revolutionary.

Furthermore, they have natively considered interoperability in their architecture. Cross-chain bridges and atomic swaps are no longer additional patches but integral parts of the system. Stablecoins on different chains can freely circulate, as if direct channels were established between the global banking systems.

The Year of Stablecoin Public Blockchains

The emergence of stablecoin public blockchains is essentially a rewriting of the value chain. In the past, profits that were taken layer by layer in the payment system by banks, card networks, and clearing institutions are now flowing to new participants.

Circle and Tether, through the issuance of stablecoins, have gained control of a massive interest-free fund, which is invested in secure assets such as U.S. Treasuries, bringing in billions of dollars in interest annually. In the second quarter of 2024, Tether's profit reached $4.9 billion, almost entirely from this "seigniorage" revenue.

With their own public chains, the ways to capture value have become more diverse. Transaction fees are just the surface; the real potential lies in value-added services. Tempo can tailor payment solutions for corporate clients, and Arc can provide institutional-level functionality in compliance and forex settlement. The premium on these services far exceeds the value of a single transaction.

There is even greater room for imagination at the application layer. When payments become programmable, new business models emerge. Automated payroll, conditional payments, supply chain finance—they not only improve efficiency but also create value that has never existed before.

But for traditional financial institutions, stablecoins are shaking their foundations. Payment intermediation is a significant source of revenue for banks, and the widespread adoption of stablecoins may make this business less necessary. The short-term impact is limited, but in the long run, banks must redefine their roles.

This value restructuring is not just a simple business competition; it also carries the shadow of geopolitics. The global circulation of dollar-pegged stablecoins is essentially an extension of dollar hegemony into the digital age. Reactions from various countries have already arrived, and the future competition will involve not only a single public chain and a company but also a struggle between different countries and monetary systems.

The rise of stablecoins is not just a technological upgrade or a replacement of a business model. What it has triggered is the most profound structural reconfiguration of the global financial infrastructure since double-entry bookkeeping and the modern banking system.

From a longer-term perspective, what stablecoins have triggered may be the most profound restructuring of the global financial infrastructure since double-entry bookkeeping and the modern banking system.

Historically, every fundamental infrastructure change has brought about a leap in the business landscape. The Venetian merchants' bills of exchange made intercity trade possible, the Rothschilds' international banking network drove global capital flows, and the systems of Visa and SWIFT accelerated payments to the second level.

These transformations have reduced costs, expanded markets, and unleashed new growth momentum. Stablecoins are the latest node on this evolutionary continuum.

Its long-term impact will be reflected on multiple levels.

Financial inclusion is first amplified, as anyone with just a smartphone can access the global network without a bank account. The efficiency of cross-border settlements will also be rewritten, as near-instantaneous clearing can significantly improve fund flows in supply chains and trade.

Even more profound change lies in its ability to catalyze digital-native business models. Payment will no longer just be about the transfer of funds, but can also be programmed and composed like data, thus expanding the boundaries of business innovation.

By 2025, with the emergence of various stablecoin public blockchains, stablecoins have truly stepped out of the crypto world and into the mainstream stages of finance and commerce. We are currently at this juncture, witnessing the formation of a more open and efficient global payment network.

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