Fintech Titans Circling the Concept of Creating Their Own Blockchains: Exploring the Motives and Ambitions Behind Circle, Stripe, and Other Next-Generation Financial Behemoths

In the ever-evolving world of cryptocurrency, a significant shift is underway as startups like Plasma and Stable, Ondo Finance, and Securitize, among others, are raising funds to build dedicated chains for Tether's USDT, the largest stablecoin in the market. This move signals the maturation of stablecoins and tokenized assets into trillion-dollar markets, poised to underpin global payments and financial markets.

One such new network is Arc, Circle's in-house settlement chain for the USDC stablecoin. Announced with its public testnet scheduled to launch in autumn 2024, Arc marks the beginning of a new Layer-1 blockchain around that time. Ethereum, long regarded as the "Fort Knox" of crypto infrastructure, should take notice of this rise of proprietary blockchains.

Stripe has also joined the fray with Tempo, a settlement chain built in partnership with Paradigm. These moves by Circle and Stripe to build their own settlement chains are seen as inevitable, as they aim to capture more of the economics, embed compliance, and shape the rules of settlement. Whoever controls the settlement rails will control the economics, the compliance layer, and the user experience of digital money.

The broader crypto industry is facing a question: do we still believe in shared public infrastructure, or are we headed toward a future where every major issuer runs its own walled garden? The rise of proprietary blockchains indicates a shift in philosophy, with companies viewing themselves as infrastructure providers capable of shaping the rules of settlement rather than adapting to someone else's.

Companies like Circle and Stripe, by owning their settlement chains, aim to control the rules, embed compliance, design predictable fee structures, and guarantee performance. Operating settlement layers could potentially generate revenue that dwarfs traditional payments margins.

However, trust and liquidity will be key factors in determining whether these new, purpose-built networks co-exist alongside existing ones or chip away at their dominance. Dinari's network with Avalanche to clear tokenized stocks is one such example of this emerging trend.

The answer to this question will shape not just the fate of Ethereum or Solana, but the architecture of the next financial system itself. As we navigate this transition, it's clear that the crypto industry is entering a new era, one where control and ownership of infrastructure are paramount.

Fintech Titans Circling the Concept of Creating Their Own Blockchains: Exploring the Motives and Ambitions Behind Circle, Stripe, and Other Next-Generation Financial Behemoths