Hotcoin Research | The Rise of Stablecoin-Centric Blockchains: Reshaping the Infrastructure of Digital Finance

I. Introduction

Recently, the stablecoin market has witnessed a clear “boom-and-bust” divergence. On one side, Ethena’s USDe briefly de-pegged to $0.65 during a flash crash, while Stream Finance’s xUSD suffered forced liquidation and plunged over 57%, reigniting concerns over the stability and trustworthiness of algorithmic and yield-bearing stablecoins. On the other side, major players, including Tether, Circle, Ethena, and Stripe have begun launching stablecoin-focused blockchains, reshaping the competitive landscape of digital payments.

In the past, stablecoin issuers such as Tether and Circle relied on external networks like Tron and Ethereum, paying substantial on-chain fees to process transactions. Now, by building their own networks or supporting specialized chains, they are effectively creating dedicated “highways” for settlement and distribution — capturing network value internally. These new infrastructures often allow gas fees to be paid directly in USDT or USDC, promise near-zero transaction costs, and integrate KYC and auditing modules at the protocol level — drawing significant attention across the industry. Stablecoins are no longer just digital assets; they are evolving into the core monetary infrastructure of on-chain finance.

This report examines the key characteristics and market implications of stablecoin-centric blockchains, analyzing leading projects such as Plasma, Stable, Arc, and Converge. It also evaluates how these networks may reshape issuance, circulation, settlement, and capital flows within the stablecoin economy. Finally, we explore the broader impacts on DeFi ecosystems, mainstream L1 networks, payment systems, interest-rate markets, and global regulation — helping investors understand the strategic logic and investment opportunities emerging from this next phase of stablecoin-driven innovation.

II. Overview of Stablecoin Blockchains

1. Key Characteristics

Stablecoin-centric blockchains are designed specifically for stablecoin issuance and transactional efficiency. Compared to general-purpose networks such as Ethereum or Solana, these chains make deliberate architectural tradeoffs to optimize for speed, cost, and regulatory compatibility.

• Stablecoin as the Native Gas Unit：Users pay network fees directly in stablecoins rather than volatile native tokens. For example, Arc uses USDC as its gas token, while Stable adopts USDT. This structure eliminates conversion costs and shields users from price volatility.
• High Throughput and Low Cost：These networks are optimized for high-frequency stablecoin transfers instead of complex smart contract execution. Most adopt modified PoS or BFT consensus mechanisms, achieving sub-second finality and thousands of transactions per second (TPS). Some even offer near-zero-fee transfers to promote mass adoption and micropayments.
• Built-In Compliance and Privacy Controls：To satisfy institutional and regulatory requirements, these blockchains integrate KYC/AML tagging, auditable accounts, and whitelist-based transaction controls at the protocol layer. For instance, Arc employs a permissioned PoA validator model with optional privacy modes, maintaining both transparency and regulatory auditability.
• Seamless Fiat On/Off Ramps：These ecosystems are tightly connected to traditional financial infrastructure. Stable supports native fiat settlement functions, while Arc integrates with Circle’s Cross-Chain Transfer Protocol (CCTP) and Global Payment Network (CPN) — forming a unified and compliant on-chain settlement framework bridging fiat and crypto liquidity.

2. Market Impact

The rise of stablecoin-centric blockchains is transforming the foundations of crypto infrastructure in multiple dimensions:

• Shift in Settlement Networks：Historically, Tron has dominated global USDT transfer volume due to its low transaction fees, while Ethereum has concentrated the majority of USDC liquidity. The emergence of stablecoin-native chains could divert settlement activity from both networks — reducing fee revenue for existing L1s and redistributing liquidity toward specialized payment chains.
• Reduced Dependency on Volatile Gas Tokens：As stablecoins become the native gas unit, user demand for volatile base tokens such as ETH or TRX may gradually decline. This shift strengthens stablecoins’ position as the de facto unit of account across the crypto economy, further integrating dollar-pegged assets into core network functions.
• New DeFi Growth Zones：Stablecoin-centric chains are likely to foster next-generation DeFi ecosystems centered around payments, lending, money markets, and yield products. In parallel, Ethereum may evolve into a higher-layer application and execution hub, connecting with stablecoin settlement layers for cross-network liquidity and composability.
• Emergence of On-Chain Interest-Rate Markets：With new yield-bearing stablecoins such as Ethena’s USDe and Circle’s USYC, stablecoin networks could drive the creation of transparent, programmable, on-chain interest-rate markets. These instruments may serve as the foundation for a new digital dollar economy, merging crypto-native yield with traditional financial rate structures.

III. Key Stablecoin-Focused Blockchain Projects

The current wave of stablecoin-centric innovation is led by Plasma, Stable, Arc, Converge, and Stripe-backed Tempo — each introducing unique architectures and settlement frameworks aimed at redefining how stablecoins are issued, transferred, and integrated across the digital economy..

1. Plasma | A USDT Network Built for Zero-Fee Payments

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

Background and Team

Plasma is not directly operated by Tether, but the project enjoys strong backing from both Tether and Bitfinex. In February 2025, the team raised USD 24 million in funding, with participation from Framework Ventures and Tether CTO Paolo Ardoino. Positioned as a high-throughput “payment highway”, Plasma targets emerging markets and high-frequency micro-transactions, aiming to make stablecoin transfers as seamless as mobile payments.

Key Features

Plasma’s core value proposition lies in zero-fee USDT transfers. Users can send USDT without paying gas fees, creating a frictionless payment experience similar to consumer fintech apps. This is achieved through a Paymaster model, where the network or designated relayers absorb gas costs on behalf of users. Additionally, the network supports multi-asset gas payments, allowing fees to be settled in XPL, USDT, or BTC.

Early Network Data

The Plasma mainnet launched in September 2025, quickly surpassing USD 8.4 billion in TVL and briefly ranking among the top four networks by liquidity. However, much of this growth was driven by yield farming incentives rather than organic payment demand. Roughly 65% of USDT deposits were allocated to lending protocols such as Aave. The native token XPL has since declined by over 70% from its initial peak, indicating that the network remains in a subsidy-driven bootstrapping phase, with real transactional adoption yet to materialize.

2. Stable | Tether’s Institutional-Grade USDT Settlement Layer

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

Background and Positioning

Stable is developed directly by Tether and Bitfinex, serving as a core infrastructure pillar of the future USDT ecosystem. The network is purpose-built for institutional and enterprise settlement scenarios, catering to exchanges, liquidity providers, and large-scale merchants. Its goal is to evolve USDT from a simple transfer token into a fully fledged, enterprise-grade digital cash system.

Core Mechanism

Stable uses USDT as its native gas asset and introduces a dual-token architecture:

• gasUSDT — used exclusively for transaction fee accounting
• USDT0 — a chain-wide transferable unit pegged 1:1 to standard USDT

Transfers of USDT₀ can be conducted gas-free, significantly lowering operational thresholds for institutional users. The network also reserves dedicated blockspace for verified entities, ensuring predictable settlement even during periods of high network activity. Support for confidential transfers using zero-knowledge proofs is in development, combining privacy protection with regulatory auditability.

Current Progress

The first pre-deposit phase of Stable on October 23 drew attention due to concentrated pre-allocations by large holders (estimated at USD 825 million). A second phase, scheduled for November 6, targets institutional liquidity providers and corporate participants. On November 4, the network launched its public testnet, offering RPC endpoints, a USDT faucet, a block explorer, and native settlement modules. The testnet aims to accelerate ecosystem application development and ensure mainnet readiness.

Strategic Relationship with Plasma

Although both Plasma and Stable are centered around USDT, they target different market segments:

• Plasma focuses on retail payments and global user distribution
• Stable is designed for high-volume institutional settlement

Together, the two networks could establish a dual-tier USDT clearing architecture, combining mass adoption with enterprise-grade infrastructure — effectively extending Tether’s dominance across both retail and institutional payment rails.

3. Arc | Circle’s Compliance-Centric Stablecoin Settlement Network

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

Background and Strategic Intent

In August 2025, Circle unveiled Arc, a native Layer 1 blockchain positioned as the unified settlement and interoperability layer for USDC. Arc is envisioned as the “operating system” for on-chain digital dollars, consolidating Circle’s key infrastructures — Cross-Chain Transfer Protocol (CCTP), Circle Payment Network (CPN), and yield-bearing USYC products — into a cohesive, enterprise-ready architecture.

Regulatory Alignment

Arc is built with full alignment to emerging regulatory frameworks, including the EU MiCA and the U.S. GENIUS Act. Its account model integrates native KYC and AML tagging alongside optional privacy controls that remain regulator-auditable. The network’s design prioritizes interoperability, aiming to serve as a cross-chain clearing hub rather than a closed ecosystem — bridging compliant liquidity across multiple chains and jurisdictions.

Ecosystem and Adoption

The Arc testnet has already attracted over 100 institutional participants, including BlackRock, Visa, and HSBC. With continued progress, Arc could evolve into the primary regulated digital dollar clearing layer, reinforcing USDC’s dominance in institutional and compliance-focused markets while redefining the infrastructure of programmable digital cash.

4. Converge | A Hybrid Chain Bridging TradFi and DeFi

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

Background and Vision

Co-launched by Ethena and Securitize in 2025, Converge seeks to bridge the gap between regulated financial institutions and decentralized finance, providing a compliant infrastructure through which traditional players can securely access DeFi markets. The project’s vision is to create a unified environment where institutional and retail capital coexist within the same liquidity framework — without compromising on compliance or transparency.

Three-Layer Parallel Architecture

Converge’s core innovation lies in its three-layer parallel structure, designed to balance openness, compliance, and asset diversity:

• DeFi Layer (Open Layer): A permissionless environment open to all users without KYC requirements. Participants can freely utilize USDe and other assets for decentralized trading, lending, and yield generation — similar to traditional public blockchains.
• TradFi Layer (Permissioned Layer): Tailored for regulated institutions that must complete KYC/AML verification. This layer supports institutional-grade assets such as iUSDe and USDtb — the latter issued in collaboration with Anchorage and compliant with U.S. stablecoin regulations. Liquidity between the TradFi and DeFi layers is interoperable, enabling institutional capital to engage with open-market liquidity in a controlled manner.
• RWA Layer (Asset Layer): Managed by Securitize, this layer supports the issuance and trading of tokenized real-world assets (RWAs) — including bonds, equities, and notes — restricted to KYC-verified participants. It operates in parallel with the other layers while sharing the same settlement infrastructure, enabling unified liquidity across the system.

This multi-layer structure enables shared liquidity while maintaining regulatory separation between institutional and retail markets — offering a blueprint for compliant, scalable on-chain capital markets.

Current Status

Converge remains in internal testing, with its trajectory dependent on institutional adoption and regulatory clarity. Nonetheless, its hybrid architecture represents one of the most viable frameworks for merging TradFi-grade compliance with DeFi liquidity, potentially shaping the next generation of integrated digital financial systems.

5. Tempo | A Payment Network Supported by Stripe

Source: https://tempo.xyz/

Background and Positioning

Tempo, developed in collaboration with Stripe and Paradigm, is designed as an embedded stablecoin payment network for global merchants. The chain focuses on frictionless stablecoin payment processing, integrating directly with Stripe’s existing infrastructure. Notably, Tempo does not issue a native token — network fees are paid in major stablecoins such as USDC and USDT, minimizing regulatory exposure and technical complexity.

Technical Integration

Tempo is built to support ISO 20022-compliant messaging standards, ensuring interoperability with traditional banking systems, AML frameworks, and regulatory reporting tools. Its advisory board and design partners include Visa, Deutsche Bank, Shopify, Standard Chartered, and OpenAI, highlighting its ambition to blend financial-grade compliance with AI-enhanced payment automation.

Current Progress

Tempo is currently in private testing, with pilot integrations underway across select Stripe merchant networks. Upon full deployment, it could enable millions of merchants within the Stripe ecosystem to accept and settle stablecoin payments at near-zero transaction fees. If successful, Tempo may emerge as a structural challenger to legacy payment systems, positioning stablecoins at the core of next-generation digital commerce infrastructure.

IV. Opportunities and Challenges for Stablecoin-Centric Blockchains

While market momentum is strong, it remains essential to objectively evaluate the opportunities and risks facing this emerging class of stablecoin-focused networks.

Opportunities

• A Massive Market Beyond Traditional Finance：Stablecoin settlement networks target the global payments and clearing market, valued at over $20 trillion. Capturing even a small fraction could generate substantial long-term revenue. This opportunity is especially significant for cross-border remittances and emerging-market payment rails, where stablecoin chains can deliver dramatically lower transaction costs and faster settlement times.
• Upgraded Revenue Models for Stablecoin Issuers：Traditionally, stablecoin issuers earned revenue mainly from reserve yields and limited transaction fee sharing. By operating their own settlement networks, issuers can unlock new income streams — including transaction fees, liquidity routing spreads, and enterprise settlement services. For instance, if Arc becomes the primary USDC settlement layer, Circle could earn sustainable, volume-based micro-fees that surpass traditional reserve income models.
• Standard-Setting and Technological Leadership：This sector is still in its formative stage, and the technical and regulatory standards for global digital money are not yet established. A leading stablecoin chain could define the interoperability, compliance, and settlement protocols underpinning future digital financial systems — ultimately shaping market dominance and geopolitical influence in the era of programmable money.
• Bridging Traditional and Decentralized Finance：Projects such as Converge illustrate a viable model for regulated institutions to access DeFi liquidity while maintaining compliance, KYC, and custodian-grade controls. If successfully scaled, this approach could enable tokenized securities, bonds, and money-market instruments to circulate natively on-chain, merging TradFi structure with DeFi efficiency.
• Improved User Experience and Mainstream Accessibility：Stablecoin chains streamline user experience: gas fees paid in stablecoins, simplified wallet UX, instant settlement, and reduced dependence on bridges or wrapped assets. Such optimizations make blockchain transactions resemble internet-style payments, lowering the adoption barrier and accelerating mainstream financial integration.

Challenges

• Network Effects and Cold-Start Friction：Payment networks thrive on mutual adoption between merchants and users. Projects like Arc and Stable must onboard banks, exchanges, and institutional partners; Plasma must convert speculative liquidity into real transactional usage; and Tempo must persuade existing Stripe merchants to adopt stablecoin settlement. Building sustainable two-sided adoption remains one of the toughest early-stage hurdles.
• Regulatory Uncertainty and Trust Perception：Despite their focus on compliance, regulatory skepticism may persist — especially toward Tether-affiliated ecosystems. Even Arc, which aligns with institutional frameworks, could face political or jurisdictional headwinds. Furthermore, validator centralization in early-stage stablecoin networks may raise concerns over transparency and decentralization.
• Expanding Security Risk Surface：New base-layer architectures and cross-chain interoperability mechanisms increase potential attack vectors. A single high-impact breach — through bridge exploits, validator compromise, or compliance-layer data leaks — could severely damage confidence among both retail and institutional participants.
• Sustainability Across Market Cycles：Many stablecoin networks rely on incentive-driven liquidity bootstrapping. When token rewards diminish or market sentiment weakens, activity and liquidity may migrate elsewhere. Long-term sustainability will depend on real payment demand and enterprise adoption, not temporary yield incentives.
• Homogenization and Fragmented Competition：The proliferation of similar stablecoin networks risks liquidity fragmentation and developer dilution. Competing versions of “USDT-chains” and “USDC-chains” could create a disjointed settlement environment, delaying standardization until market consolidation determines clear leaders.

V. Outlook and Conclusion

Despite near-term challenges, stablecoin-centric blockchains mark a significant evolutionary step in the digital finance landscape — aligned with the broader trends of currency digitalization and settlement-layer modernization. Over the next 3–5 years, several structural shifts are likely to unfold:

• Market Consolidation into a Few Dominant Settlement Networks

Just as Visa and Mastercard established dual dominance in card-based payments, the stablecoin space may consolidate around two or three core settlement networks. Circle’s Arc could emerge as the primary regulated digital dollar layer, while Tether-backed Stable and Plasma dominate retail and global dollar-denominated payment flows. Secondary networks may pivot toward specialized use cases or integrate into broader blockchain ecosystems.

• Deeper Participation from Traditional Financial Institutions

As regulatory clarity improves, banks, payment providers, and custodians are expected to operate validator nodes, issue regulated assets, or build settlement applications directly on stablecoin networks. The line between crypto infrastructure and traditional financial rails will continue to blur, accelerating convergence between the two systems.

• A More Robust and Transparent Stablecoin Framework

With native features such as real-time auditing, programmable issuance controls, configurable privacy, and on-chain liquidity routing, stablecoin networks could transform stablecoins into secure, transparent, and fully auditable digital cash instruments. Cross-stablecoin conversions may become seamless, enhancing overall market resilience and reducing systemic contagion risk.

• The Early Formation of a Global Digital Currency Network

As sovereign CBDCs mature, they may interoperate with stablecoin settlement layers instead of building isolated systems. The resulting hybrid monetary architecture — combining CBDCs, commercial stablecoins, and blockchain-based clearing networks — could form the backbone of future global value exchange.

Ultimately, the rise of stablecoin blockchains signals a transition from speculative narratives to real economic infrastructure. Stablecoins are evolving from passive stores of value into active settlement engines powering the next generation of financial systems. As issuers construct their own “digital highways” for money, blockchain technology is entering a phase defined by stability, efficiency, and institutional integration.

Where this new digital monetary system ultimately leads remains open — but the direction is clear.

The future of blockchain will be shaped not by speculative tokens, but by the infrastructure behind digital dollars.

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