Software devours the world, Stablecoins devour blockchain.
This time it's not Coinbase's Base or Robinhood L2, Circle and Stripe almost simultaneously choose to build their own stablecoin Layer 1, completely breaking free from existing public chains' constraints, reconstructing from the bottom-level mechanism to Gas tokens entirely around stablecoins.
Banks lose their deer, stablecoins chase together.
On the surface, Circle's Arc and Stripe's Tempo directly compete with Tron and Ethereum, but actually target the global clearing power of the "post-central bank - banking system", as the Visa and SWIFT systems supporting legal tender can no longer meet stablecoins' global mobility needs.
[The rest of the translation follows the same professional and precise approach, maintaining the original structure and technical terminology]Subsequently, there is familiar EVM compatibility, MEV protection, FX engine, and trading optimization. It can be said that with the support of Cosmos, launching a Hyperliquid-level product is technically unhindered, and if it's L2, the difficulty would not exceed deploying a Docker instance.
In Arc's plan, cryptographic technologies such as TEE/ZK/FHE/MPC will be integrated. It can be said that today's technological diffusion makes the startup cost of public chains almost constant. What's difficult is ecological expansion, building distribution channels and terminal networks. Visa took 50 years, the USDT/Tron alliance took 8 years, and Tether created USDT 11 years ago.
Time is the biggest enemy of stablecoin Layer 1, so stablecoins chose a strategy of separating saying and doing:
• Doing: Retail use → Distribution channels → Institutional adoption
• Saying: Institutional compliance → Public popularization
Whether Tempo or Converge, both target institutional adoption. Arc is even more focused on the global compliance path. Compliance + institutions is the Go-to-Market strategy provided by stablecoin Layer 1, but this is not the whole story. Stablecoin Layer 1 will promote in a more "Crypto" way.
Plasma and Converge will collaborate with Pendle. Circle is subtly pushing 24/7 conversion of yield stablecoins USYC and USDC. Tempo, with Paradigm founder Matt Huang as CEO, is also fundamentally aiming to be more blockchain-oriented, rather than Fintech-oriented.
Institutional adoption has always been a compliance measure. Just as Meta claims to protect user privacy, in real business, users must come first before driving institutional adoption. Don't forget that USDT's earliest and largest user base has always been ordinary people in Asia, Africa, and Latin America, and now it has entered the institutional perspective.
Distribution channels have never been an institutional strength. Ground marketing armies are the underlying color of the internet.
Image description: Stablecoin Layer 1 Comparison
Image source: @zuoyeweb3
Emerging stablecoin Layer 1 projects either have raised significant funds or are backed by big trees. Under Genius Act and MiCA regulations, they basically cannot pay interest to users or acquire customers through this method. However, USDe reached the $10 billion mark within a month by relying on circular lending.
The gap between on-chain yield distribution and user conversion leaves market space for interest-bearing stablecoins. USDe manages on-chain, while USDtb becomes a compliant stablecoin under Genius Act with Anchorage's cooperation.
Yield can greatly promote user adoption, which is a fatal temptation. Beyond the boundaries set by rules is a good arena for each player to show their skills.
Conclusion
Before stablecoin Layer 1, TRC-20 USDT was the de facto global USDT clearing network. USDT is the only stablecoin with real users, so Tether doesn't need to share profits with exchanges. USDC is just its compliant substitute, like Coinbase is Binance's Nasdaq mapping.
Stablecoin Layer 1 is challenging Visa and Ethereum. The global monetary circulation system is fundamentally being reshaped. Global US dollar adoption rate is declining, but stablecoin Layer 1 has already targeted forex trading. The market is always right, and stablecoins desire to do more.
More than 10 years after blockchain's birth, seeing innovation in the public chain field is already enough to be delightful. Perhaps, the most fortunate thing is that Web3 is not Fintech 2.0, DeFi is changing CeFi|TradiFi, and stablecoins are changing banks (deposits/cross-border payments).
Hope that stablecoin Layer 1 remains an heir to blockchain's core principles.
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