The circulation of stablecoins has doubled to $300 billion within 18 months and now handles higher volumes than Visa and Mastercard combined. USDC peaked in November 2025.
Circle launched Arc's public testnet, attracting notable investors such as Goldman Sachs, BlackRock, and Visa. Stripe is developing Tempo along with Paradigm. Plasma raised 373 million dollars to fund Tether infrastructure.
One thing is clear: the struggle to win the battles for stablecoins has become increasingly intense.
However, beneath the surface, the infrastructure is in disarray.
USDC exists on more than a dozen blockchains, all having their own consensus mechanism, fee structure, and technical constraints. For example, in the case of CFOs trying to use stablecoins for cross-border payments, "one dollar" on paper is fragmented across different technical domains.
A Treasury team receiving stablecoins from a supplier must decide whether to stick with Ethereum, which has unpredictable costs, or choose a cheaper yet untested chain.
Why Circle and Stripe Are Building Their Own Blockchains
In August 2025, Circle announced Arc as a reaction to fragmentation. The 60-billion issuer knew that it could not win the infrastructure battle without controlling the rails. Arc is a dollar-based platform powered by the USDC token, a predictable fee, and an FX engine that institutional clients can utilize for settlements.
Days later, following the launch of Circle, Stripe leaked Tempo through a job posting that was quickly deleted. The payments giant is creating this blockchain with Paradigm to serve its merchant network.
In October 2025, Mastercard reportedly acquired the crypto assets of ZeroHash for $2 billion. Back in February, Stripe acquired Bridge for $1 billion. Coinbase had negotiated the acquisition of a stablecoin infrastructure company, BVNK, valued at $2 billion. The list is long.
The pattern is evident: all large fintechs have come to realize that having a base layer enables them to incorporate compliance, manage their transaction costs, and separate their performance, as well as the level of congestion they face in the general chains.
The Problem Nobody's Solving
As much as Circle and Stripe are building their own blockchains, the problem of fragmentation is making it worse, rather than alleviating. The distribution of stablecoin supply is concentrated around two major networks, with Ethereum comprising 55% and Tron 28%. Currently, layer 2 solutions handle more than 16% of USDC transfers, thereby relieving congestion on the main-net but creating increasingly isolated liquidity pools.
In the case of emerging blockchains, it is almost impossible to procure liquidity in the stablecoins. Circle does not simply issue native USDC support; the issuer assesses the security, compliance, and framework support, and institutional custody support, and the probability of an exchange listing the native stablecoin variant of the blockchain. Most of the chains do not pass these rigorous examinations.
Even in cases where these conditions are met, exchange adoption still constitutes the major bottleneck. In August 2025, Coinbase re-invested in Aave, Morpho, Kamino, and Jupiter by launching a Stablecoin Bootstrap Fund, which added capital to the existing USDC and EURC liquidity. The fund had been dormant for four years. Its revival signals how desperate the industry is to solve the liquidity fragmentation problem.
The bootstrap trap is easy: no exchanges will list a stablecoin unless there is plausible demand; no users will adopt a stablecoin without exchange listings. This means that a majority of blockchains die before they start.
A Test Case in Coordinated Exchange Adoption
In late November 2025, the ranking of Token Terminal disclosed that XDC Network, an enterprise blockchain specializing in trade finance, was the second-fastest-growing USDC implementation in the world in a 30-day period. Within its initial month of integration, the network recorded $30 million in USDC adoption.
That's modest, considering the USDC hit $76 billion in total circulation—most blockchains struggle to reach even $1 million. The difference came from timing: multiple exchanges activated native USDC support nearly simultaneously rather than sequentially. Bybit, KuCoin, MEXC, Bitrue, Gate.io, and others went live within weeks of each other.
This type of coordination provided instant on-ramps, as well as off-ramps. Traders could deposit USDC to exchanges, trade, and withdraw to the XDC Network without wrapped tokens and bridge contracts. The Cross-Chain Transfer Protocol of Circle allowed burn-and-mint transfers, thus eliminating wrapped-token risks of bridge-based solutions.
The network offered several benefits, including infinitesimal transaction fees, a finality of three seconds following its 2024 upgrade, and compliance infrastructure (aligned with ISO 20022 and MiCA participation) that provided regulatory assurance to institutions. Since its launch in 2019, XDC has been designed as a trade finance system and has 261 operational validator nodes as well as partnerships with Deutsche Telekom and SBI Holdings today.
Whether this momentum sustains depends on execution. Enterprise sales cycles are slow, and $30 million represents 0.04% of USDC supply. However, the trend is informative: a coordinated adoption of the exchange can break the bootstrap trap, which, as a rule, ruthlessly eradicates the new blockchain deployments of stablecoins.
The Pattern Emerging Across Enterprise Blockchains
XDC is not the only blockchain to seek to disrupt the Ethereum Tron duopoly's stablecoin adoption. In 2025, Algorand reported a 72% week-over-week increase in the number of active wallets, which is at least partly due to the issuance of stablecoins using its ASA token standard. Circle considers greater USDC implementation on Algorand.
Hedera, whose control committee contains representatives of Google, IBM, and Boeing, is working on enterprise applications over supply chain management and carbon credits that require settlement in stablecoins. Cosmos's 2025 IBC Eureka upgrade enabled blockchains to communicate via light clients, allowing for direct transfers of dollar tokens between Ethereum, Cosmos chains, and others without custodial bridges.
But the majority of efforts fail due to their focus on stablecoin adoption being a technological issue rather than a coordination issue. Small fees and quick transactions are useless when exchanges do not support the stablecoin, and customers cannot transfer capital in and out of the network.
Why the Plumbing Problem Matters More Than the Technology
By 2030, it is estimated that the stablecoin circulation will range between $ 1.9 trillion and $ 4 trillion. In 2025, the United States passed universal regulations on stablecoins. It is estimated that stablecoins may comprise 10 per cent of the U.S. money supply. However, regulatory clarity does not resolve the issue of distribution inequity because stablecoins continue to flow into existing pathways with existing liquidity.
That growth won't be evenly distributed. Dominant networks will keep most of it because they already have network effects. Major issuers are building proprietary chains with massive merchant networks and compliance built in. When these processes sub-second transactions with predictable fees, they'll have technical advantages that most existing chains can't match.
In the case of enterprise-oriented blockchains, the key issue should be whether they will fix the coordination problem or not before proprietary chains are released. When coordinated exchange adoption becomes the standard playbook, the competitive dynamics will change. In the event that it is a temporary aberration, the trap of bootstrap will still be unsolved.
And here is a word for thought:
Will proprietary blockchains built by issuers provide more stablecoin infrastructure dominance than network vertical models that address coordination issues?
The former is now being wagered off in billions. The latter is being tested on a few networks.
For the first time, it's not clear whether owning the technology matters more than solving the plumbing problem.
The race has just started!