Major Companies Like Circle and Stripe Are Creating Their Own Blockchains: Here's Why

The launch of new blockchains for stablecoins seems to be a daily occurrence, with Circle recently announcing Arc, its own settlement network, shortly after payments giant Stripe unveiled Tempo, developed in collaboration with Paradigm. They join a growing list of companies, including startups Plasma and Stable, which have secured funding to develop dedicated chains for USDT, the largest stablecoin on the market. Tokenization players, such as Securitize, Ondo Finance, and Dinari, are also investing in their own in-house chains. The stablecoin and tokenized real-world assets markets are experiencing rapid growth, with analysts predicting they will become trillion-dollar asset classes in the near future. Stablecoins are poised to disrupt cross-border payments, while tokenization enables traditional instruments like bonds, funds, and stocks to trade around the clock with faster settlements on blockchain rails. The majority of these tokens currently live and settle on public blockchains like Ethereum, Solana, or Tron, which provide global reach and liquidity but also come with constraints for asset issuers. Building their own layer-1 blockchains allows companies to gain control and strategic positioning, embed compliance, integrate foreign exchange engines, and ensure predictable fees. This move also helps companies reduce their dependence on external blockchains, avoiding exposure to external fee markets, protocol governance decisions, and technical bottlenecks. Custom chains enable companies to issue their own gas tokens, control transaction costs, and maintain network performance isolated from unrelated activity. As blockchains become the 'middle and back office' of a company's operations, powering transactions behind the scenes, the idea of a company owning and customizing its end-to-end blockchain infrastructure is becoming increasingly appealing. The revenue opportunity from owning the settlement layer is expected to surpass traditional payment processing margins. The new chains can offer additional control and the ability to implement know-your-customer (KYC) checks and other innovations at the protocol level. While it's too early to tell how the new chains will impact existing layer-1 blockchains, some networks may feel the competition sooner than others. Analysts argue that Circle's Arc and Stripe's Tempo are targeting high-throughput, low-fee payments, which could potentially disrupt Solana, while Ethereum, with its institution-heavy user base, is less likely to be disrupted in the near term.