Stablecoin L1s and L2s have become the industry’s hot narrative.
From Plasma to Arc, and from Stable and Converge to Tempo, global fintechs and top stablecoin issuers—including Tether, Circle, Coinbase, Stripe, and Ethena Labs—are shifting off general-purpose chains to build dedicated settlement layers. Many are rolling out their own chains or L2s.
This article walks through the rationale, risks, and possible market structure—and what it means for users and the ecosystem.
1. The Elephant in the Room: Stablecoins
Stablecoins power payments, cross-border transfers, and DeFi collateral—quietly reshaping on-chain and global money flows. Since DeFi Summer 2020, native use cases unlocked durable demand: composability and 24/7 liquidity turned stablecoins from simple trading chits into base-layer liquidity rails for crypto.
As of September 30, circulating stablecoins topped ~$300B, with USDT ~$174.6B and USDC ~$73.5B. Over five years, the market added >$280B—about 15× prior net growth—inviting inevitable regulatory scrutiny given the collateral footprint and the potential to reshape payment rails.
Source: Coingecko
Post-2020/21 issuance and 2022–2025 mainstreaming, stablecoins have entered a new phase. Their role will expand both in crypto-native finance and in deeper integration with global finance.
Against this backdrop, issuers are no longer content to play supporting roles on Ethereum or Tron—they’re building their own chains (e.g., Tether: Plasma and Stable; Circle: Arc and Noble; Ethena Labs: Converge).
Why this is a natural next step
- Margins & network effects. Dedicated settlement chains capture transaction and gas fees, feeding issuer economics at scale.
- Risk & compliance. Reduce dependency on external L1s (e.g., Ethereum, Tron), spread technical/compliance risk, and offer predictable execution and fees for institutions.
- Strategic positioning. Pairing a stablecoin with its own chain creates contenders for a digital-dollar settlement layer—potential core financial infrastructure.
2. Who’s Building?
This is why issuers are building.
Issuers and payment players are moving from general-purpose chains to vertical, payments-first stacks optimized end-to-end for settlement scale—throughput, latency, and gas design. Common thread: high performance, low fees, stablecoin-native payments.
Tether — Plasma (and Stable L1)
- Plasma targets zero-fee USDT transfers, very high throughput, and a minimal-trust Bitcoin bridge—tuned for large-scale, cross-border USDT movement.
- Tether follows a multi-chain strategy: beyond Ethereum/Tron, it launched Stable L1 with Bitfinex and supports USDT-paid gas—diversifying risk and increasing control.
Circle — Noble and Arc
- Noble brings USDC and other stables to IBC-connected appchains—an early path into the Cosmos ecosystem.
- Arc is Circle’s USDC-native chain for stablecoin finance: USDC as gas, support for yield-bearing USYC, and a built-in RFQ-style FX engine for institutional conversions. Arc is purpose-built for enterprise payments, FX, and treasury, not maximal decentralization.
Others include Converge (institutional focus) and Tempo (Stripe’s merchant rails). This wave falls into three paths:
- Dedicated settlement L1s (e.g., Plasma, Stable, Arc, Tempo): full control of stack, economics, and compliance for maximum performance and customization.
- L2s on established L1s (e.g., deeper Arc/Base alignment; Converge): inherit security and developer mindshare while controlling throughput and gas economics at L2.
- Cross-chain aggregation & account abstraction: unify UX at the wallet layer and hide multi-chain complexity.
Meanwhile, competition is already reshaping pricing on general-purpose chains. On August 29, Tron cut on-chain transfer fees by ~60% to address rising USDT costs—signaling pressure from issuer-run settlement stacks. Historical data shows Tron transfer fees rose from <$0.50 (pre-2021) to >$4.50, and even after the cut, a typical USDT transfer often lands around $1.9–$4.5.
3. Settlement Layers: General-Purpose Chains vs. Stablecoin Chains
As USDT and USDC scale their own stacks, they will challenge Ethereum, Tron, and others for payments and settlement share. Functionally, this is a split between high-frequency financial settlement and general-purpose compute—a shift driven by lived market constraints.
Historical gas data shows Tron transfer fees rose from <$0.50 (pre-2021) to >$4.50, and even after the ~60% energy price cut, USDT transfers often cost ~$1.9–$4.5.
On Ethereum mainnet, volatile gas has long hindered high-frequency, low-value payments. L2s (e.g., Arbitrum, Optimism) and newer L1s (e.g., Aptos, Sui) improved the picture, but issuer-run chains can go further by fixing gas predictability and maximizing throughput—surgical solutions to general-purpose chains’ pain points.
That said, building a stablecoin chain isn’t a free lunch. Still, taking on both issuance and settlement raises two core challenges:
- Security & decentralization. Performance often trades off decentralization—long-term security and censorship resistance remain open questions.
- Ecosystem gravity. Without destinations (apps), a fast highway (chain) caps its long-term value.
For users, more chains can mean more fragmentation across accounts and networks—raising the bar for wallet infrastructure to aggregate in real time. imToken now supports Plasma accounts to simplify multi-chain management—one place to hold and move assets across chains while benefiting from L2-class performance.
Closing Thoughts
Long term, stablecoin payments won’t clear primarily over Visa/Mastercard rails. The end state of crypto payments is self-custodied transactions initiated from user wallets and settled directly on blockchains.
That means stablecoins aren’t just dollar substitutes—they’re settlement-layer reshapers. Rather than supporting actors on Ethereum or Tron, issuers are building chains to own clearing and settlement. With the build-their-own-chain wave and new account models advancing together, a trillion-dollar crypto backbone is likely to form faster than most expect.
The race has already started.