1. Introduction

Recently, the stablecoin market has experienced a dramatic situation: on one hand, the USDe from Ethena plummeted to $0.65 due to a flash crash, and Stream Finance's xUSD faced liquidation, dropping over 57%, triggering a trust crisis in stablecoins; on the other hand, giants like Tether, Circle, Ethena, and Stripe have launched their own "stablecoin-specific public chains," stirring the entire crypto payment landscape. In the past, Tether and Circle had to pay high on-chain fees to networks like Tron and Ethereum, but now they choose to build their own networks or support dedicated public chains, effectively creating their own "highways" and terminal networks, keeping channel profits within their systems. These chains not only allow payments in USDT / USDC for Gas, promise "zero fees," and incorporate KYC and auditing modules, but also spark ongoing market discussions. Stablecoins seem to be evolving from a type of asset into the main character of a complete "on-chain currency infrastructure."

This article will systematically outline the characteristics of stablecoin chains, their impact on the crypto market, review the most notable stablecoin public chain projects currently, deeply analyze the ecological layout and data performance of representative projects like Plasma, Stable, Arc, and Converge, explore how stablecoin chains are reshaping the closed-loop logic of stablecoin issuance, circulation, and settlement, as well as their potential impacts and challenges on the DeFi ecosystem, mainstream public chains, payment networks, interest rate markets, and even global financial regulation. It aims to help investors see the logic, grasp the pulse, and find opportunities in this new competition where "chains are born for stablecoins."

2. Overview of Stablecoin Chains

1. Characteristics of Stablecoin Chains

In simple terms, stablecoin chains are blockchain networks specifically tailored for the issuance and trading of stablecoins. Compared to general-purpose chains like Ethereum and Solana, stablecoin public chains have made targeted trade-offs in their architecture:

• Stablecoins as core fuel: Stablecoin public chains typically use the stablecoin itself as Gas fees, rather than volatile tokens. For example, Circle's Arc uses USDC to pay on-chain fees, while Tether's Stable chain uses USDT for Gas. This allows users to avoid back-and-forth conversions, speeding up transactions and avoiding exchange rate risks.

• High performance and low cost: These chains do not pursue the complexity of general smart contracts but instead optimize for stablecoin transactions, aiming for faster confirmations and lower fees. The consensus mechanism often employs modified BFT or PoS solutions, achieving sub-second final confirmations with TPS reaching thousands, meeting large-scale payment demands. Some chains even offer zero fees or near-zero cost transfer experiences to attract users.

• Built-in compliance and privacy: To gain institutional and regulatory recognition, stablecoin chains incorporate KYC/AML tagging, auditable accounts, transaction whitelists, and other features at the base layer. For instance, the Arc chain adopts a permissioned PoA consensus, natively supporting real-name tagging of accounts, complying with EU MiCA and US stablecoin regulatory frameworks. It also offers an optional privacy mode, allowing institutions to protect transaction details while meeting regulatory scrutiny.

• Seamless fiat on/off ramps: Stablecoin public chains often have tight integration with traditional financial interfaces. For example, the Stable chain natively integrates fiat on/off ramp channels, allowing enterprise users to conveniently exchange and settle fiat currencies like USD with USDT on-chain. Circle's Arc is deeply linked with its own Circle Payment Network (CPN) and Cross-Chain Transfer Protocol (CCTP), aiming to create a global stablecoin clearing network's "operating system."

2. Impact of Stablecoin Chains on the Crypto Market

The rise of stablecoin public chains is quietly reshaping the landscape of the crypto market, bringing a series of impacts:

• Changes in stablecoin settlement patterns: For many years, the Tron network has carried the most USDT transactions globally due to low fees, being regarded as the de facto USDT clearing network. Ethereum has been the primary operating ground for stablecoins like USDC. However, with the emergence of dedicated chains like Plasma, Stable, and Arc, a large number of stablecoins may migrate from existing networks to these stablecoin networks. For Ethereum, this could reduce its stablecoin transaction volume and fee income, but it may also alleviate network congestion; for Tron, the impact is greater, as its survival relies on USDT transfer business, which may be diverted or even replaced by Tether's own chain.

• Changes in fee and fuel token demand: Stablecoin chains use stablecoins as Gas, impacting the existing public chain token economies. On the Arc and Stable chains, users do not need to purchase ETH or TRX to pay fees, which lowers transaction costs and entry barriers, but also reduces the demand for Gas tokens like ETH and TRX. All operations on the chain can be completed using stablecoins without the need for additional holdings, further solidifying the status of stablecoins as the universal unit of account in the crypto world.

• DeFi ecosystem and innovation: Stablecoin chains themselves will form a new DeFi ecosystem; for instance, projects like Aave and Pendle on Plasma have quickly accumulated TVL. Additionally, as chains like Arc and Converge are closer to compliant institutions, hybrid DeFi products may emerge in the future: part of the funding may come from regulated institutions, while another part comes from crypto-native users, jointly participating in a protocol. On the other hand, the DeFi status of the Ethereum mainnet may face pressure from being siphoned off. A multi-layered DeFi landscape may form in the future: the bottom layer cleared by stablecoin chains like Arc, the upper layer carrying complex applications on Ethereum, and settling through bridges with stablecoin chains. This architecture is expected to enhance overall efficiency, provided that secure and smooth interoperability between different chains is achieved.

• Stablecoin yields and interest rate markets: New types of stablecoins represented by Ethena's USDe offer endogenous yields to attract users, posing potential competitive pressure on non-interest-bearing stablecoins like USDT and USDC. Stablecoin chains have more room to design interest rate products; for example, Circle has launched USYC, which is linked to government bond rates, and Tether may launch accounts providing interest for institutions through the Stable chain, allowing for more flexible embedding of yield distribution mechanisms. This will somewhat change the inherent image of stablecoins as "zero interest," promoting the development of the on-chain dollar interest rate market.

3. Major Stablecoin Chain Analysis

Currently, the most notable new chains in the stablecoin public chain track include Tether's Plasma and Stable, Circle's Arc, Converge in collaboration with Ethena and Securitize, and Tempo led by Stripe.

1. Plasma: A USDT Network for Zero-Fee Payments

Source: https://www.plasma.to/

Background and Team: Plasma is not a project directly operated by Tether but has received strong support from Tether and Bitfinex. The team completed a $24 million funding round in February 2025, with investors including Framework Ventures and Tether CTO Paolo. It is positioned as the "highway for payments among stablecoins," particularly targeting emerging market users and high-frequency small transaction scenarios.

Key Features: Plasma's biggest selling point is zero-fee USDT transfers. Ordinary users do not need to pay Gas fees when transferring USDT on-chain, achieving a frictionless experience similar to traditional digital payment apps. To achieve this, Plasma introduces a Paymaster mechanism: the backend pays for Gas or covers costs through other revenues, thus exempting front-end users from fees. Additionally, Plasma supports multi-asset Gas payments, allowing users to pay Gas with USDT or even BTC, besides the native token XPL.

Launch Data Performance: The Plasma mainnet officially launched in September 2025, and within just a few weeks, the total locked value (TVL) in DeFi on the network briefly ranked among the top four in the industry, reaching $8.4 billion. However, it should be noted that a significant portion of Plasma's early TVL came from liquidity mining rather than real payment activities. Data shows that about 65% of USDT on Plasma is deposited into lending protocols like Aave for yield, with the on-chain stablecoin turnover rate far below that of networks like Tron. The price of the XPL token quickly fell after initial hype: within a month of launch, the price dropped by 70% from its peak. This reflects that Plasma currently mainly plays the role of a "high-yield farm," and real payment circulation application scenarios have not yet fully emerged.

2. Stable: Tether's Institutional USDT Main Chain

Source: https://www.stable.xyz/

Background and Positioning: Stable is a new public chain personally led by Tether and its sister company Bitfinex, regarded as one of the most important future infrastructures for the USDT ecosystem. The vision of the Stable chain is to create a high-performance, scalable, and compliance-friendly dedicated network for USDT, serving institutional-level scenarios such as exchanges, market makers, and large merchants, aiming to upgrade USDT from a simple stablecoin to an enterprise-level digital cash solution.

Functional Features: The Stable chain natively uses USDT to pay Gas fees while introducing a dual-token mechanism—gasUSDT and USDT0: gasUSDT is the fuel token used for billing on the chain, while USDT0 is a "fully chain universal" USDT pegged 1:1 with standard USDT. Peer-to-peer transfers of USDT0 are completely gas-free, further lowering the usage threshold. Stable also designs dedicated enterprise block space to ensure that large institutional transactions can receive priority packaging and stable confirmation times even during network congestion. Future plans also include confidential transfers (using zero-knowledge proofs to hide transaction amounts while retaining auditability) to meet the dual needs of privacy and compliance for enterprises.

Progress and Controversy: On October 23, the first phase of the Stable pre-deposit activity faced controversy due to "front-running" issues, with $825 million in pre-deposits being emptied in seconds, and whales had reportedly entered early with $700 million before the official announcement. The second phase of the pre-deposit activity will start on November 6, accepting qualified deposits of up to $500 million. On November 4, Stable announced the official launch of its public testnet. Currently, the testnet has opened multiple functions for developers, including public RPC endpoints for network interaction, a faucet for testing USDT, a block explorer for tracking contracts and on-chain activities, and a system module supporting native USDT transfers and fee settlements. Stable stated that this testnet will lay the foundation for future mainnet deployment and ecological application development.

Tether supports both Plasma and Stable chains, which revolve around USDT but have different focuses. Plasma is developed by an external team, using Rust language and innovative consensus, pursuing broad coverage of the global retail market and zero-fee payments. Stable, on the other hand, is directly managed by the official team, emphasizing services for large institutions and providing customized enterprise features to meet the high-performance and predictability needs of exchanges and merchants. In the future, Plasma and Stable may form a complementary relationship: Plasma focusing on scattered public payments, while Stable consolidates the institutional settlement field, jointly reinforcing USDT's dominant position.

3. Arc: Circle's Compliant Stablecoin Network

Source: https://www.arc.network/

Background and Strategy: In August 2025, the US compliance stablecoin issuance giant Circle announced the launch of its self-developed open-source L1 public chain, Arc. The vision of Arc is to create the "iOS system" for stablecoins: by controlling the underlying chain, the issuance, cross-chain, and settlement of stablecoins like USDC will all be completed on its own network, thus upgrading to a global digital dollar clearing center. After the launch of Arc, Circle can further integrate its cross-border payment network (CPN), cross-chain protocol (CCTP), yield stablecoin (USYC), and other products with Arc to build a closed loop.

Functional and Ecological Vision: Arc was designed with European and American regulatory requirements in mind: it complies with EU MiCA regulations and follows the framework of the GENIUS Act. The account system on the Arc chain has built-in KYC/AML tagging functions, providing an optional privacy mode while being auditable for regulators. The core design of Arc is to become a cross-chain stablecoin clearing layer, aiming to connect the flow of funds across multiple chains and currencies. At the application level, Arc is not just a base layer network but also aims to incubate a stablecoin native application ecosystem.

Progress and Prospects: Currently, Arc has launched its testnet, with over 100 participating institutions, including BlackRock, Visa, HSBC, and other financial institutions and tech companies. In the future, Arc may have the most potential to become the "officially recognized stablecoin chain." If Arc succeeds, it will elevate the competition of stablecoins from the application layer to the settlement layer, consolidating USDC's latecomer advantage over USDT in the compliance field.

4. Converge: An Institutional Chain Connecting TradFi and DeFi

Source: https://www.convergeonchain.xyz/

Background and Vision: Converge was jointly launched by Ethena and the tokenization platform Securitize in 2025. Converge targets the pain point of "how institutions can safely and compliantly participate in DeFi," aiming to bridge traditional finance (TradFi) and decentralized finance (DeFi), creating a hybrid chain that is both open and compliant.

Three-Layer Parallel Architecture: The biggest innovation of Converge is the proposal of a "three-layer parallel" on-chain architecture:

• DeFi Layer (Public Layer): Completely permissionless and open, anyone can use stablecoins like USDe to participate in decentralized trading, lending, and other protocols without KYC. This layer operates similarly to ordinary public chains, maintaining the openness of crypto-native systems.

• TradFi Layer (Permissioned Layer): For licensed institutions, participants must complete KYC/AML verification before use. This layer provides compliant versions of assets parallel to the DeFi layer, such as iUSDe (institutional version of USDe) and USDtb. USDtb is reportedly a compliant dollar token issued in cooperation with the regulated custodian Anchorage, meeting the requirements of the US stablecoin legislation. Both layers share liquidity, ensuring that institutional funds can interact with open market funds.

• Asset Layer (RWA Layer): Provided by Securitize, this layer issues and trades KYC-verified security tokens on-chain, including bonds, stocks, notes, and various real-world assets. This layer operates parallel to the previous two layers, utilizing shared underlying settlement. However, only institutions that have passed compliance verification can operate in this layer.

The three-layer architecture operates independently yet shares liquidity, ensuring that both retail and institutional users can trade within the same ecosystem while meeting different regulatory requirements. This design is considered the true differentiator of Converge, making it a hybrid chain serving both retail DeFi and institutional TradFi.

Progress and Outlook: As of now, Converge is still in the internal testing phase. The success of Converge largely depends on the degree of institutional acceptance. However, it is undeniable that Converge offers an intriguing vision—a layered on-chain financial market where ordinary investors and Wall Street institutions can meet their needs while sharing liquidity. If this model proves viable, it will have a profound impact on stablecoins and the entire crypto market.

5. Tempo: A Payment Network Supported by Stripe

Source: https://tempo.xyz/

Background and Positioning: Tempo, launched by Stripe in collaboration with Paradigm, is a blockchain focused on payments. The logic behind Tempo is simple: Stripe has a vast number of merchants and end-users, and providing a stablecoin settlement network would significantly reduce global payment costs. The biggest feature of Tempo is its "no-token" design; it has not issued any native tokens, and network fees can be paid with any mainstream stablecoin. This makes Tempo's economic model closer to traditional payment systems.

Technology and Collaboration: To facilitate financial institutions' access, Tempo integrates the ISO 20022 standard payment message format, allowing the information accompanying on-chain transfers to be recognized by traditional systems like banks. This is crucial for meeting anti-money laundering and auditing requirements and indicates that Tempo has considered compatibility with the banking system from the outset. During development, Tempo invited a number of heavyweight partners as design consultants, including OpenAI, Visa, Deutsche Bank, Shopify, Standard Chartered, and others.

Progress and Prospects: Tempo is currently in the private testnet phase, with Paradigm co-founder Matt Huang serving as Tempo's CEO. Tempo's advantages lie in its no-token, all-stablecoin model, which reduces regulatory resistance, as it will not be seen as issuing security tokens and is easier to gain merchant acceptance. If Tempo launches smoothly, it will allow merchants on the Stripe network to receive payments in stablecoins at nearly zero cost, which would be a huge shock to the traditional payment landscape.

4. Opportunities and Challenges for Stablecoin Chains

While the wave is surging, we also need to calmly examine the opportunities and challenges faced by stablecoin public chains:

Opportunities:

• Surpassing the incremental market of traditional finance: Stablecoin public chains target the $20 trillion global payment clearing market. Even capturing a small portion of it would be a massive increment. Especially in areas like cross-border remittances and payments in emerging markets, stablecoin chains are expected to provide unprecedented low-cost solutions.

• Upgrading the issuer's revenue model: For stablecoin companies, past income mainly came from reserve interest and a small amount of fee sharing. By mastering public chains, they can derive new income sources from on-chain transaction fees, cross-border exchange rate differences, etc. For example, if Circle's Arc succeeds, it will extract tiny but massive fees from global USDC clearing, with total revenue expected to surpass simple interest income.

• Technological innovation and standard setting: Stablecoin chains are in their infancy, presenting an opportunity for teams to stake their claims and set industry standards. If a particular solution gains widespread recognition, it could become the foundational standard for future digital payments. This would not only benefit the expansion of related project ecosystems but also enhance the country's voice in the digital finance field.

• Integrating traditional finance: Initiatives like Converge have opened new ideas for bringing traditional assets on-chain. Once RWA circulates successfully on-chain, it may trigger financial institutions to follow suit, moving more bonds, fund shares, etc., onto on-chain settlements, exponentially increasing market scale and influence.

• Enhanced user experience: The benefits that stablecoin chains bring to ordinary users are tangible: no Gas fees for transfers, sending USDC via mobile wallets becomes as simple as sending WeChat red envelopes; cross-chain transfers can be done with one click without needing cross-chain bridges; along with improvements like account abstraction and privacy addresses, using blockchain will feel more like internet applications. These improvements will help attract more users from outside the crypto space to accept crypto technology, lowering the barriers to large-scale adoption.

Challenges:

• Network effects and cold starts: Payment networks need sufficient merchant support and user adoption. Arc and Stable need to integrate systems with numerous partners; Tempo requires Stripe to guide its millions of merchants over; Plasma, despite a large user base, faces the significant challenge of how to truly get these USDT used for consumption rather than just for rewards.

• Regulation and trust: Although these chains claim to be more compliant, regulators may not be convinced. Especially for Tether's chains, Tether has faced scrutiny in the past, and building its own chain may trigger more stringent reviews. While Arc has strong compliance, if Circle becomes embroiled in political or legal disputes, assets on the Arc network may also be affected. Additionally, most stablecoin chains have highly centralized verification nodes in the early stages, often controlled by companies, which may raise concerns among traditional crypto users about decentralization and security.

• Security risks: New public chains mean new attack surfaces. Many chains, especially those using cross-chain mechanisms or connecting with traditional systems, can easily become targets for hackers. Any major security incident (such as bridge hacks or compliance layer data leaks) could destroy user and institutional confidence. Moreover, some chains sacrifice decentralization for performance, which poses inherent security concerns. Balancing security and efficiency will test the team's capabilities.

• Market volatility and sustainability: These chains have gained significant attention this year, but the crypto market changes rapidly. If a bear market or interest rate environment changes, the growth of stablecoins may slow, on-chain incentives may decrease, and users could rapidly leave. For example, the price drop of XPL as an incentive token led to a swift outflow of Plasma's TVL. This indicates that relying solely on subsidies is not a long-term strategy; real usage scenarios must be established within the subsidy window, or hot money will shift to the next "farm."

• Homogeneous competition: Currently, over a dozen projects have entered this track, inevitably leading to overlapping functions and internal competition. For instance, both Plasma and Stable are USDT chains, while Arc and Tempo directly compete in cross-border payments, with traditional institutions like Visa and SWIFT also experimenting with blockchain payments. If the market is divided among too many versions, it could lead to a new fragmentation of the stablecoin ecosystem.

5. Outlook and Conclusion

Despite the numerous challenges, the direction represented by stablecoin public chains is undoubtedly promising. It aligns with a major trend: the digitization of currency and the on-chain nature of payments. Just like the early internet's various network standards disputes, it will ultimately move towards integration and unification. It is expected that in the next three to five years, we will see the following potential developments:

• A few chains monopolizing the market: After market validation and resource competition, perhaps only a few stablecoin chains will gain mainstream recognition. It is likely that a main chain will form within a dollar system: with Circle's camp (Arc) leading compliant dollar settlements and Tether's camp (Stable/Plasma) dominating general market dollar payments, both coexisting yet with different focuses. Other projects will either be integrated into the ecosystem or shift to niche areas (like Codex focusing on on/off ramps). This pattern resembles the dual oligopoly of Visa and Mastercard, occupying different markets and customer groups.

• Deep participation of traditional institutions: As regulations become clearer, banks and payment companies will no longer observe from the sidelines but will directly become nodes or partners. We may see major banks like JPMorgan operating validation nodes for Arc, and Visa deploying service nodes on Tempo. This will further blur the lines between blockchain and traditional finance, with stablecoin chains becoming part of mainstream financial infrastructure.

• A more robust stablecoin system: The infrastructure improvements of stablecoin chains will enhance the stability of stablecoins. For example, more on-chain real-time audits, reserve proofs, and automatic supply adjustments through smart contracts will make future de-pegging events less common. Additionally, different stablecoins may achieve rapid interchange through a unified clearing layer, alleviating the risks of individual stablecoins. If any one stablecoin encounters issues, funds can be switched to safer stablecoins at low cost, thus avoiding a vicious cycle.

• The embryonic form of a global digital currency network: Once CBDCs from various sovereign nations mature, they may directly connect to these stablecoin chains. Because compared to building a new international interoperability network, it is more efficient to utilize existing mature links while controlling permissions at the access layer. Ultimately, a new monetary system may emerge, co-constructed by CBDCs, commercial stablecoins, and stablecoin chains: central banks responsible for issuing base money, commercial entities issuing stablecoins pegged to CBDCs circulating on-chain, while blockchain undertakes the underlying ledger function. By then, "stablecoin public chains" will no longer be a novel term but will become an organic part of the financial infrastructure of various countries.

In summary, the rise of stablecoin public chains indicates that crypto technology is gradually shifting from speculative trading to serving the real economy and public payment needs. Stablecoin public chains carry the hope of large-scale blockchain applications while facing the challenge of balancing traditional finance and decentralized ideals. As stablecoins begin to build their own networks, the blockchain industry is entering a new stage dominated by stable value. When the highway for digital dollars is truly built, it may mark the moment when crypto integrates into mainstream finance. Let us wait and see where this digital payment revolution will head.

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