The stablecoin public chain arms race: From Plasma, Arc to Tempo, who will dominate the $20 trillion digital payment future?
The golden age of stablecoin public chains has arrived.Author: Bernard, ChainCatcher
In the cryptocurrency market of 2025, stablecoins are becoming the real protagonists. As of August, the circulation of USDC has reached $65.2 billion, and the entire stablecoin market has surpassed $280 billion, with an annual trading volume of $27.6 trillion, exceeding the combined total of Visa and Mastercard.
Against this backdrop, an arms race around blockchain infrastructure dedicated to stablecoins is fully underway. Unlike general-purpose public chains, these emerging "stablecoin public chains" are specifically optimized for the issuance, payment, and settlement of stablecoins. They do not pursue the completeness of smart contracts but focus on making stablecoin transactions faster, cheaper, and more compliant. From fintech payment leader Stripe to stablecoin giants Tether and Circle, as well as various innovative projects like Codex, 1Money, and Converge, over ten teams are fiercely competing in this space.
Arc: Building the "iOS System" for Stablecoins
As the issuer of USDC, Circle officially launched the Arc public chain on August 12, 2025. Unlike other stablecoin public chains, Arc's unique value lies in Circle's dual identity advantage—being the world's second-largest stablecoin issuer and an "insider" in traditional finance (having completed an IPO and deeply tied to institutions like BlackRock). This identity gives Arc three key advantages:
- Natural Advantage of Compliance Genes: Circle has collaborated deeply with regulatory agencies like the SEC and FinCEN for many years. Arc is not just adding compliance features in a "patchwork" manner on the public chain; it is designed from the ground up to meet U.S. regulatory requirements—Arc is based on a permissioned PoA model, compliant with the EU's MiCA and the U.S. GENIUS Act framework. Additionally, Arc's account system supports native KYC/AML tagging, allowing institutional users to directly verify the compliance status of counterparties on-chain.
- Native USDC: Arc uses USDC as the gas token, which is not just a matter of "convenience." Traditional public chains require users to first purchase native tokens like ETH or SOL to transact, increasing friction costs and exchange rate risks. Arc allows enterprises to pay all on-chain fees directly with USDC, achieving a "what you see is what you get" cost accounting—CFOs see on-chain costs in dollar terms without complex token conversions. This is significant for publicly listed companies and financial institutions with strict financial compliance requirements.
- Performance: Circle acquired the Malachite consensus engine from Informal Systems—ensuring Byzantine fault tolerance while enabling dynamic adjustment of validating nodes. This means Arc can intelligently switch between "high-security mode" (20 nodes, 350 milliseconds of determinism) and "high-speed mode" (4 nodes, <100 milliseconds of determinism) based on network load.
Circle has been making "big moves" this year, launching the Arc public chain after completing its IPO and having USDC recognized as an official stablecoin in the U.S., showcasing Circle's ambition to build a "stablecoin operating system." Just as Apple controlled the mobile ecosystem through iOS, Circle aims to control the underlying rules of the stablecoin ecosystem through Arc. The built-in cross-chain transfer protocol (CCTP) and FX engine essentially construct a global stablecoin clearing network. In the future, regardless of which chain USDC is on, final settlement will need to go through Arc, allowing Circle to upgrade from a "stablecoin issuer" to a "global digital dollar clearing center."
Stable: Tether's Institutional Moat
Stable, as the "main force" personally operated by Tether, targets the most valuable segment of the USDT ecosystem—institutions. Exchanges need to handle billions of dollars in withdrawals daily, market makers need to quickly allocate funds across different platforms, and payment service providers need to offer stable settlement services to merchants. The needs of these institutional users differ significantly from those of retail users: they care more about transaction atomicity, privacy protection, and compliance audits rather than saving a few cents in fees.
Based on this, Stable has designed a unique "enterprise channel," which is not just a simple VIP fast track but a comprehensive solution tailored to institutional needs: batch trading packaging can process thousands of transfers at once, reducing operational costs; privacy trading features protect sensitive business information, meeting corporate confidentiality needs; compliance audit interfaces can automatically generate regulatory reports, simplifying compliance processes. These features may be irrelevant to individual users but are key factors for institutions deciding whether to migrate.
Stable's three-phase development roadmap also reveals Tether's long-term thinking. The first phase quickly launches basic functions, using USDT as the gas token and achieving sub-second block times to seize market opportunities; the second phase will introduce block space guarantees for enterprise-level payments, supporting atomic transactions to ensure the atomicity and finality of large transfers; the third phase focuses on developer tools and ecosystem building, creating an ecological moat that turns institutional investments in Stable into sunk costs.
Tempo: The "Track Revolution" of Payment Giants
In addition to the two stablecoin giants Tether and Circle, fintech payment giant Stripe has also partnered with Paradigm to launch the Tempo public chain, becoming a "disruptor" in this competition. The Tempo public chain was officially announced on September 4, 2025, with a list of partners that is nothing short of luxurious: in the financial services sector, there are Visa, Deutsche Bank, and Standard Chartered; in the tech sector, OpenAI and Anthropic; and in e-commerce platforms, Shopify, DoorDash, and Coupang. These partners not only participated in the design process of the Tempo public chain but will also become the first users of the Tempo ecosystem.
In terms of technical architecture, Tempo's built-in AMM design allows users to pay gas fees with any stablecoin, with the system automatically completing the exchange in the background. This "neutrality" allows Tempo to avoid being tied to any stablecoin issuer and also prevents speculation on native tokens.
In October last year, Stripe acquired Bridge for $1.1 billion, a move that now appears to pave the way for Tempo. The stablecoin infrastructure provided by Bridge, combined with the wallet developer Privy acquired in June this year, along with the Tempo public chain, has allowed Stripe to build a complete vertically integrated system—from wallets to payments to settlements. Stripe's blueprint is to provide merchants with an end-to-end solution, completing the entire process from user payments to merchant receipts within Stripe's ecosystem, ensuring controllable costs and consistent experiences.
In the past, Stripe charged a processing fee of 0.3% on the networks of Visa and Mastercard, with most profits going to Visa and Mastercard; now, through Tempo, Stripe aims to become the "payment rail" itself, expanding its profit margins.
Plasma: Tether-Supported Stablecoin-Specific Chain
Plasma completed a $24 million financing round in February 2025, led by Framework Ventures, with participation from Bitfinex, Tether CEO Paolo Ardoino, Peter Thiel, and others. Currently, Plasma (XPL) has a public offering price of $0.05, with a target fundraising amount of $50 million, an estimated valuation of $500 million, and has raised a total of $74 million through five rounds of financing. The token generation event (TGE) is scheduled for September 25, 2025, with a listing price of $0.6. Its current market capitalization is approximately $1.36 billion, with a fully diluted valuation (FDV) of $7.6 billion.
Compared to Stable, Plasma is not an official public chain project directly operated by Tether, but due to strong support from Tether/Bitfinex-related capital, it is often regarded as one of the stablecoin public chain projects that Tether focuses on, targeting emerging markets and high-frequency small payment scenarios, emphasizing a zero-friction experience to attract retail and Web2 migration users.
Plasma CEO Paul Faecks revealed a key insight in an interview: "The three major scenarios of stablecoin savings, consumption, and global transfers actually have completely different product logics. Savings users want USDT to generate returns, consumption users care about zero-friction payment experiences, while cross-border transfer users are most concerned about compliance and inflow/outflow channels." The overall design of Plasma is based on this insight. Plasma innovatively adopts a dual-validator system—one group of validators is responsible for network security, while another group specifically handles zero gas fee transfers of USDT. This separation allows Plasma to provide a truly zero-cost experience for USDT transfers while ensuring security.
Another advantage of Plasma lies in its native support for Bitcoin. Through customized cooperation with Aave, users can directly use BTC as collateral to borrow USDT without going through centralized wrapped tokens like WBTC. Plasma's partners include DeFi protocols such as Ethena, Aave, Morpho, Curve, and Maker. However, Faecks clearly stated that although Plasma can run any Ethereum-compatible dApp, its goal is to target the "extraction" payment industry through USDT's zero-fee payment rail.
It is worth noting that Plasma explicitly excludes features like NFTs, meme coins, and airdrops, focusing on deep integration with traditional payment companies. For example, among Plasma's first partners, Yellow Card covers 20 African countries with over 1.5 million monthly active users; WalaPay connects remittance networks in labor-exporting countries like the Philippines and Indonesia; Maple Finance provides on-chain credit services for enterprises.
Converge: Bridging DeFi and Traditional Finance
Converge was jointly developed by Ethena Labs and Securitize, officially announced on March 17, 2025. Compared to other stablecoin public chains, Converge attempts to solve a core issue: how to allow traditional financial institutions to safely and compliantly participate in DeFi?
Converge's greatest innovation lies in its "three-layer parallel" architecture design. The first layer is a completely permissionless DeFi layer, where anyone can freely use USDe to participate in various DeFi protocols without KYC; the second layer is a permissioned TradFi layer, where institutions can conduct compliant transactions using iUSDe and USDtb after KYC verification; the third layer is Securitize's tokenized asset layer, including credit leverage, fixed income products, and equity trading. These three layers run in parallel on the same chain, sharing liquidity while remaining independent.
In the transformation of the ENA token, Converge upgrades ENA to a staking token for validating nodes (sENA), creating an economic closed loop: validators stake ENA to earn network security rewards while sharing protocol fees. This not only enhances ENA's value capture capability but also transforms core participants in the Ethena ecosystem into stakeholders in Converge.
Converge's deeper strategic intent is to redefine "the use of chains." Ethena founder Guy Young categorizes blockchains into two types: speculative settlement and asset storage settlement. He believes that the latter presents far greater opportunities in the next decade. This understanding drives Converge's design philosophy to become the settlement layer for global assets, where traditional government bonds, corporate bonds, and stocks can exist in tokenized form and participate in DeFi, making this chain a key infrastructure connecting $100 trillion of traditional assets with crypto innovations.
Codex: Ethereum L2 Focused on Fiat Exchange
Codex announced the completion of a $15.8 million seed round in April 2025, with Dragonfly Capital investing approximately $14 million, along with participation from the venture capital arms of Coinbase and Circle. Codex was co-founded by former core members of Optimism Haonan Li, Victor Yaw from the Malaysian Samling Group family, and former Meta product manager Momo Ong.
Haonan Li stated in an interview with Fortune Crypto: "In our view, TPS and latency are not the real bottlenecks for stablecoin adoption. The real bottlenecks lie at the boundary between fiat and cryptocurrency." Based on this judgment, Codex chose to build L2 on Optimism, focusing on the fiat exchange issue of stablecoins rather than merely enhancing blockchain performance. Codex's products include the launched "Swap Avenue," which supports transferring stablecoins across multiple chains like Solana, Polygon, Ethereum, and Tron, with transaction fees uniformly paid in USDC. Currently, market makers like Wintermute are using this service. Codex also plans to launch T+0 instant fiat settlement features and support regional stablecoins (such as tokens backed by francs and shillings).
In terms of market strategy, Codex is focusing on Southeast Asia and Africa. These regions have high costs and slow speeds for cross-border payments, making them natural scenarios for stablecoin applications. Codex has launched institutional-level services in the Philippines and plans to expand to Singapore, the UK, Dubai, and Hong Kong. Particularly in the African market, Codex sees huge opportunities; Chainalysis data shows that Sub-Saharan Africa received approximately $125 billion in on-chain value between 2023 and 2024. Codex has partnered with Canza Finance in Nigeria and plans to integrate with the custody platform Blockradar, setting a goal to capture a quarter of the enterprise stablecoin traffic in Africa within a year.
It is noteworthy that when Stripe and Paradigm announced the launch of Tempo in September 2025, Haonan Li tweeted that these new chains were "an attack on Ethereum." Vitalik retweeted and commented, "Glad to see Codex joining the fight as L2, clearly considering synergy with Ethereum L1 from day one."
1Money: A Pure Payment Network with No Governance Tokens
1Money was founded by former Binance.US CEO Brian Shroder, announcing over $20 million in seed round financing in January 2025, with investors including F-Prime Capital, Galaxy Ventures, Hack VC, Tribe Capital, and more than 20 other institutions.
Brian Shroder's core viewpoint is, "We can be the cheapest because we don't have our own token. So we don't need to transfer gas fees to support the price of speculative assets… Now we can truly have fixed-rate gas fees." This strategy of having no native token and governance token contrasts with Stable—while Stable also does not issue governance tokens, it still retains USDT as a dedicated gas token, whereas 1Money allows users to pay fees directly with the stablecoin they are trading.
Another choice for 1Money is not to support smart contracts. Shroder believes that settlement times ranging from a few seconds to 30 minutes "do not work for Starbucks," as "they won't wait for transaction confirmation to give you your coffee." This positioning makes 1Money more like a pure payment network rather than a general-purpose blockchain platform. Compared to other public chains, 1Money has chosen a minimalist route—1Money completely abandons the complexity of Web3—no "tokenomics," no complex governance layers, no staking, and no proof of work.
In terms of compliance, 1Money has obtained 34 U.S. money transmission licenses and a Bermuda BMA Class F license. The team includes former Binance Global Operations Senior Vice President Matthew Shroder (Brian's brother) as President, former OKX Deputy General Counsel Chris Lalan as CLO, former Binance Deputy CCO Kristen Hecht as CCO, and former Ripple CISO Brett Enclade as CISO.
A Competitive Landscape, But Not a Winner-Takes-All Outcome
The current competition among stablecoin public chains is forming multiple factions, but the classification is not simply a binary opposition of "traditional vs. crypto":
- Vertical Integration of Stablecoin Giants: Circle (Arc) and Tether (Stable) directly control the entire chain from issuance to settlement, benefiting from existing liquidity—Tether and Circle already account for 86% of the stablecoin market cap. Arc leverages Circle's compliance advantages to attract institutions, while Stable relies on USDT's dominance in Asia and emerging markets.
- Dimensional Reduction Attack by Payment Giants: Stripe (Tempo) enters the fray with a mature merchant network and payment experience. Stripe processes hundreds of billions of dollars in global payments, and once Tempo goes live, it can immediately integrate into its merchant system without needing to educate the market.
- Differentiated Breakthroughs through Native Innovation: Plasma targets emerging markets and high-frequency small payment scenarios, Codex focuses on fiat exchange boundaries, 1Money emphasizes payment without governance tokens, and Converge connects DeFi with TradFi. They lack an existing user base and must find niche markets overlooked by giants.
This diversified landscape indicates that the stablecoin public chain market is unlikely to see a winner-takes-all scenario; different projects can serve different needs. Just as various protocols and standards coexist in the internet era, the future of stablecoin public chains will also be characterized by multiple chains coexisting and interconnecting.
However, a deeper contradiction lies in the positioning dilemma of stablecoin public chains. All stablecoin public chains are competing for the same market, but stablecoins are essentially commodities rather than platforms and can substitute for each other. When users can transfer USDT from Arc to Tempo and then to Solana in seconds, where are the "moats" of the public chains? Do we really need so many stablecoin public chains? Ethereum has hosted 57% of the stablecoin supply, while Tron and Solana have divided most of the remaining share, and the gas fees for these "old chains" have also dropped to low levels. What can the new stablecoin public chains offer us? How can they persuade users and merchants to migrate?
The competition among stablecoin public chains appears to be a battle of technology and business models, but at its core, it is a redistribution of financial power. When Tether earns $13 billion a year with only 150 employees, the old money cannot sit idly by; when 90% of financial institutions claim they are ready to adopt stablecoins, SWIFT's position is already precarious. Circle aims to replace SWIFT with the CCTP protocol, Tether wants to become the Visa or Mastercard of Web3, and Stripe seeks to bring its traditional financial advantages onto the chain, becoming "the platform's platform"—as stablecoin transactions become increasingly simple, fast, and secure, the boundaries between traditional finance and digital finance will also blur. A truly global, instantaneous, low-cost payment network will become a reality. And now, we stand at the starting point of this new era.
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