The Chopping Block: Stablecoin-as-a-Service: The Next Big Crypto Gold Rush? - Ep. 906
🎯 Summary
[{“key_takeaways”=>[“The rise of verticalized ‘stablecoin chains’ like Circle’s Arc and Tempo (Paradigm/Stripe) signals a new focus on stablecoin-native infrastructure, moving beyond general-purpose L1s.”, “Tempo is launching as a payments-first L1 with a permissioned validator set including major enterprises, claiming it will decentralize over time.”, “Arc differentiates itself through three core features: stablecoin-native fees (USDC), sub-second deterministic finality, and built-in privacy controls for institutions.”, “Despite widespread discussion, non-USD stablecoins have historically failed to gain traction, with the market remaining overwhelmingly dominated by USD-denominated stablecoins (99%).”, “The push for FX capabilities in new chains like Arc and Tempo is framed as necessary for future tokenized real-world assets, even if current stablecoin adoption is primarily for USD savings outside the US.”, “The recent USDC bakeoff dynamics, exemplified by Hyperliquid securing a native USDC deal, highlight a new era where ecosystems can collectively bargain with stablecoin issuers for better terms.”], “overview”=>”This episode of The Chopping Block dives into the emerging trend of ‘Stablecoin-as-a-Service’ via specialized Layer 1 blockchains, focusing on the competition between Circle’s Arc and the newly announced Tempo (backed by Paradigm and Stripe). The discussion explores the core features differentiating these new chains, such as native stablecoin fees, finality, and privacy, while also debating the persistent, yet historically underutilized, role of non-USD stablecoins in global finance.”, “themes”=>[“Stablecoin-Native Layer 1 Blockchains (Arc vs. Tempo)”, “Competitive Landscape and Institutional Adoption”, “The Role and Future of Foreign Exchange (FX) Stablecoins”, “Regulatory Considerations and Permissioned Validators”, “Ecosystem Bargaining Power with Stablecoin Issuers”]}]
🏢 Companies Mentioned
💬 Key Insights
"There's almost this notion that I think is fairly new about maybe there should be collective bargaining, not just in a single application like Hyperliquid, but an entire ecosystem [for stablecoin issuance]."
"We are starting out as permissioned validator set as well. Most likely, I mean, we are committed to most likely it will still be a permissioned validator set even after, you know, wait, but also stay will have a transition to Proof of Stake at some point. Even after Proof of Stake, most likely will still remain to be a permissioned validator set because we think that's what at least our understanding of the current regulatory environment is what is needed for institutions for mass adoption because you want to make sure that North Korea is not one of the validators, for instance."
"sub-second deterministic finality. Now, deterministic is actually quite important if you're talking to regulating institutions that require that sort of certainty instead of just economic finality or probability is finality."
"Arc is not a standalone blockchain. It brings with it the full suite of Circle platform products: USDC, ERC, USYC, and also the interoperability across chains through CCTP and Gateway and Circle mint connectivity to Fiat."
"But once you have local tokenized assets, local tokenized credit that's trading on-chain in a massive scale, you have to have the growth of corresponding local stablecoin that grows with it."
"building up in privacy that would allow institutions, enterprises to selectively hide, for instance, balances and transfers initially, and perhaps later on even addresses, but that's comply to the rules and laws that are that regulators have."