WHY CIRCLE AND STRIPE (AND MANY ORHERS) Are Launching their Own Blockchains

Or at least that’s How It Felt This Week, WHEN USDC (USDC) Issuer Circle AnnounCed ARC, ITS OWN SETTLEMENT NETWORK, SHORTLY AFTER PAYMENTS GIANT STRIPEALATA with Paradigm.

They Were the Latest in A Growing List. Startups Plasma and Stable Both Raised Funds Recently to Develop Dedicated CHAINS FOR USDT (USDT), The $ 160 Billion and Largest Stablecoin On the Market.

Tokenization Players Are Pilting in, Too.

Securitize is Building Converge with Ehena, Ondo Finance AnnunCed ITS UPCOMING IN-HAVSE CHAIN EARLIER THIS YEAR For Clearing and Setting Tokenized Stocks.

Stablecoins and Tokenized Real-World Assets Are Rapidly Growing Segments of the Crypto Economy, and Analysts Project Them to Swell Into Trililion Stablecoins are published to disrupt Cross-Border Payments, While Tokenization Allows Traditional Instruments Like Bonds, Funds and Stocks Trade AROUND-CONPCHENT EATH FASTHER SETLETSTLETLE FASTLE FASTLESTLESTLE Say.

Read More: Stablecoin Payments Projected to Top $ 1T Annuly by 2030, Market Maker Keyrock Says

WHY Build L1s?Today, The Vast Majority of the Tese Tokens Live and Settle on Public Blockchains Like Ethereum, Solana or Tron. These Neutral Networks Give Issuers Global Reach and Liquidity, But They Also Come With Certain Constraints for Asset Issuers.

“Building their Own L1 is about Control and Strategic Positioning, Not Just Technology,” Said Martin Burgherr, Chief Clients Officeer at Crypto Bank Sygnum.

Stablecoin Economics Are Shaped by Settlement Speed, Interoperability, and Regulatory Alignment, SO “OWNING The BASE LIETS FIRMS DIRECTLY EMBED ENAGINIC Fees, He Said.

There’s Also A Defensive Moive. “Today, Stablecoin Issuers Depend on Ethereum, TRON OR ORERS FOR SETTLEMENT,” BURGHherr Said. “That Reliance Means Exposure to External Fee Markets, Protocol Governance Decisions, and Technical Bottlenecks.”

Custom Chains Alow Companies to Issue their Own Gas Tokens, Control Transaction Costs and Keep Network Performance Isalated from Unrelated Activity What KIDWORK, SAID CLOG. EcoSystem Growth at Ava Labs.

IncreASINGly, She SAID, BLOCKCHAINS Are BComing the “Middle and Back Office” of A Company’s Operations, Powering Transactions Behind the Scenes While User-Facing Apps May Live Across Multiple Christ.

“The Idea of A Company OWNING AND CUSTOMIZING THEIR END-TO-End Blockchain Infrastructure i Increating Appaling,” She Said.

The Economics Can Be Even More Compelling than the Tech. “The Revenue Opportunity from Owning The Settlement Layer Will Dwarf Traditional Payment Processing Margins, SAID GUillaume Poncin, Chief Technology Officeer at Web3 Development PLATFMENT PLATFMENT PLATFMENT PLATFMENT PLATFMENT PLATFMENT PLATFMENT PLATMENT PLATORM

He Said the New Chains Can Offer Additional Control and the Austivity to Implement Know-Your-Customer (KyC) Checks and Other Innovations at the Protocol Level. While L1s Can Offer Full Customization, Rollups Are Faster to Deploy and Secure.

In EITHER CASE, PONCIN Noted, Compatibility with Ethereum Virtual Machine (EVM) Makes It Far Easier to Integrate With Other Blockchains and Speed Adoption.

How Could this Impact Existing L1s?It’s Way Too Early to Tell How The New Chains Will Impact the Incumbents, But Some Networks May Feel The Competition Sooner Thanks, Analysts Said.

Coinbase Analysts Led by David Duong Argued in a Friday Report that Circle’s Arc and Stripe’s Tempo Are Targeting High-Throughput, Low-Fee Payments, Which Isa. Meanwhile, Ethereum with It Institution-Heavy User Base Is Less Likely to be Disrupted in the Near Term, they wrote.

The Process for the Entrants to Win Over USers Could Take Years, Sygnum’s Burgherr Said.

“New Entrants Will Need Not Just Technology, But Also Years of Trust-Building to Shift The Detepest Liquidity and Highest-Value Payments Away from Incumbent Rails,” HE SAID. “Financial Institutions Prize Proven Security, Custody Integration, and Resiliency Under Real-World Stress.”

“That’s Who Ethereum Remains the Institute ‘Fort Knox,'” He Said.