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Stripe & Circle Join L1 Parade

Olivia Capozzalo & Camila Russo
August 12, 2025

gm, Defiers!

Today’s big story:

  • In the past 24 hours, both Stripe and Circle revealed that they’re launching a Layer 1 blockchain — what happens now?

In other news:

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Today’s Big Story

Stripe, Circle and the Long, Unnecessary Layer 1 Parade

In less than 24 hours we’ve learned at least two new stablecoins-focused Layer 1s are in the works: First came news that payments giant Stripe is building Tempo. Now Circle, the issuer of USDC, has announced it’s launching a dedicated Layer 1 as well.

This is another sign that the biggest names in fintech and crypto are doubling down on the bet that stablecoins will be the backbone of global payments. But to be honest, my first reaction to the news was:

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And I was not alone.



@collision@patrickc I call Ethereum the "Grand Central station of crypto" because... Interconnection and protocol compatibility is a strength, yes, and also interconnection is fundamental to the internet and human electronic experience.



"I'm building a new island on the internet" sounds





— Sir Jeff Garzik (@jgarzik)
2:11 PM • Aug 12, 2025



If everyone is launching their own L1 I have to hop between, why shouldn't I just use a bank?





— Austin Campbell (@CampbellJAustin)
12:12 PM • Aug 12, 2025

The Stripe news broke first. A now-deleted job listing and a Fortune report citing people familiar, suggest the company is developing Tempo in partnership with Paradigm. It will reportedly be EVM-compatible, use Solidity, and is being built by a small team in stealth.

Stripe has already been assembling the parts of a stablecoin machine — acquiring Bridge, a stablecoin infrastructure startup, and Privy, a wallet provider. Tempo would complete the stack, giving Stripe full vertical integration from issuance and custody to settlement rails.

Circle’s announcement came right after. Its new chain, Arc, is also aimed squarely at payments, and will make USDC the native settlement asset. Circle says this will allow “global scale, near-instant transfers, and native programmability” for merchants and developers using USDC. Like Stripe, Circle already controls a key piece of the stablecoin puzzle. Owning the base layer would give it end-to-end control of performance, compliance, and economics.

Why build an L1?

The case is straightforward:

  • Full control over governance, fee models, and upgrade cycles.
  • Ability to set a stablecoin as the native gas token, removing the need for users to hold a volatile crypto asset for fees.
  • Low-latency finality tuned for payments.
  • Compliance baked in at the protocol level.

But the counterarguments are equally clear:

  • Ethereum’s rollup ecosystem already lets you spin up a dedicated L2 with custom gas tokens, compliance hooks, and fast finality, all while inheriting Ethereum’s security and liquidity. The Avalanche ecosystem achieves the same degree of customization with its Avalanche L1s.
  • Payments thrive on network effects. Fragmenting stablecoin liquidity across new L1s risks creating isolated islands.
  • Bootstrapping a developer ecosystem for a brand-new L1 is a long, uphill slog, even for companies with deep pockets.

And the “payments L1” niche is suddenly getting crowded. In the past year, Tether is planning to launch Stable, a USDT-native chain which raised $28 million in a seed round, and Plasma, backed by Tether’s sister company, Bitfinex, secured $24 million for fee-free stablecoin transfers.

Now Stripe and Circle, with built-in merchant networks and brand power, are muscling in. The differentiation here isn’t so much technology as it is distribution.

So why not just build on Ethereum as an L2? This is my own speculation, but the obvious answer is the potential financial upside. L1 tokens have historically commanded far higher valuations than L2 governance tokens. Sometimes L2s have no token at all.

With Paradigm backing Stripe’s Tempo and Circle inevitably designing its chain economics, it’s hard not to see the token play. An L1’s native asset can be staked, used for gas, and positioned as the “reserve asset of the world’s largest blockchain payment network.” In a frothy market, that narrative writes itself. For Stripe and Circle, it’s infrastructure control. For their investors and owners, it’s an early-stage asset with potentially billions in valuation upside.

None of this diminishes the adoption angle. If Stripe and Circle succeed, millions of users could be transacting in stablecoins without even realizing they’re touching blockchain.

But let’s be honest: that could likely be more easily achieved by plugging into existing ecosystems. The world doesn’t need another Layer 1. The investors holding its token, however, might.

With love,

Cami, founder of The Defiant

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