Circle Internet’s highly successful IPO earlier this year put a spotlight on the growing stablecoin market and illustrated how profitable the stablecoin issuance business can be. Despite the success of stablecoins so far, the industry is still in its nascent stages and the stablecoin market is expected to grow to $3.7 trillion by 2030. To scale to such numbers the networks facilitating stablecoin transfers need to be more efficient which is the reason why Circle decided to build its own layer-1 chain. Fintech giant Stripe is also building its own layer-1 chain called Tempo to tackle the same issue. Another new and prominent player in the same is Plasma, a layer-1 chain purpose built for stablecoin transfers with the backing of Tether, the issuer of USDT, the leading USD stablecoin issuer globally.

In our May newsletter, we wrote about stablecoins and the regulatory developments that paved the way for secular growth. Since then, outstanding stablecoin supply has increased from $246bn to $300bn, with Tether’s USDT still commanding the lion’s share of the market at 59%. This is followed by Circle’s USDC with 24% market share with Ethena’s USDe a distant third at 4%. As can be seen below, most of this stablecoin activity is on the Ethereum network although the Tron Network has gained significant market share over the last few years due to its lower transmission cost. However, as Tron’s network usage has grown, so have its fees and that is suboptimal for the scaling of stablecoin adoption beyond the current supply. In addition, its user interface is also outdated making it clunky for onboarding new users.

Ethereum is the dominant chain for stablecoin supply

Source: DeFilama

To address the deficiencies of existing networks such as Ethereum and Tron which were as general purpose chains, companies such as Circle and Stripe plan to build their own stablecoin optimized chains. Circle’s announced its new chain Arc in August this year. Arc is an EVM-compatible Layer-1 blockchain. Arc will use USDC as its native gas token, allowing users to pay transaction fees directly with the stablecoin, which enhances usability and integration within the stablecoin ecosystem. The blockchain is designed to support enterprise-level applications, offering sub-second settlement times and features like opt-in privacy controls, making it suitable for regulated financial services. Arc is built to be fully interoperable with existing partner blockchains, ensuring that it can integrate seamlessly into the broader digital finance landscape.

Stripe is one of the largest payment processing company in the world. Stripe also recently acquired Bridge for $1.1 billion, marking its largest acquisition to date. This deal, first announced in October 2024, positions Stripe to expand its presence in the stablecoin market and enhance its financial infrastructure offerings. Bridge focuses on making it easier for businesses to accept stablecoin payments without having to directly deal in digital tokens. Stripe and blockchain venture firm Paradigm is also teaming up to build Tempo, a stablecoin payments optimized layer1 chain. Tempo has raised $500 million in fresh funding in a Series A round valuing the startup at $5 billion, representing one of the highest valued blockchain venture rounds over the past few years. Its design partners include OpenAI, Shopify and Visa.

Plasma is another new stablecoin optimized blockchain backed by Tether. It includes features like zero-fee USDT transfers, custom gas tokens, and confidential but compliant transactions. These capabilities are designed to support high-volume, global money movement. The network is also engineered for performance, with the ability to process thousands of transactions per second. Plasma uses a protocol-level paymaster to sponsor gas for USDT transfers. This eliminates the need for users to hold native tokens and enables frictionless payments that are ideal for remittances, micropayments, and global commerce. Plasma will include a trust-minimized Bitcoin bridge, allowing BTC to flow into the network securely. Over time, additional features will be introduced to support a growing application ecosystem and further optimize for stablecoin use cases.

PlasmaOne, their crypto neobank offering, is the distribution arm which aims to offer superior cashback and yield compared to traditional bank accounts. It will offer 4% cashback and 10% yield, and function exactly like a Visa card. The app will also serve as the frontend to the entire ecosystem of on chain applications. Essentially, an all-in-one finance app with best-in-class rewards and self-custody. EtherFi Cash is the biggest competitor within this vertical, and in less than 6 months, has amassed a cumulative 31,000 cards with a combined spend volume of over $68m, currently increasing by a further $1m each day. Similarly it offers 3% cashback and 10% yield but is covered in its entirety by Scroll, who subsidises it with $SCR tokens. Plasma will fund their cashback in its native token $XPL which could be expensive from a treasury standpoint and also presents potentially misaligned incentives to users who would need to sell in order to spend.

Plasma’s purpose-built chain compares favorably to Tron Network

Source: Spartan Capital

On July 17 2025, Plasma launched their public sale using Echo’s Sonar platform, looking to raise $50 million at a $500 million fully diluted valuation (FDV). The sale was highly oversubscribed from the beginning and had the deposit limit increased multiple times from $250 million to $1 billion after filling quickly each time. The sale was so heavily oversubscribed that depositors were eventually allocated 5% of their deposit amount. Even so, after accounting for dilution and deposit duration, the sale was a resounding success for participants as Plasma’s FDV soared to over $16 billion shortly after listing on September 25, before retracing and ending the month at $10.2 billion.