Increased centralization around stablecoin issuers and other fintech companies has defined much of the crypto market in recent years. And Circle has now furthered this trend by securing a $222 million raise for its blockchain infrastructure project, Arc. The funding came through a presale of the ARC token at a $3 billion fully diluted valuation. Circle already issues the second-largest stablecoin by market cap, USDC, but now seeks to consolidate more of the underlying technology around its dollar-pegged token. The goal is to cut costs, lower transaction fees, boost revenue streams, and enhance functionality for users, all while cutting other crypto networks, namely Ethereum, out of the equation.
Circle’s recent token offering drew participation from a wide group of institutional backers. a16z crypto led with a $75 million commitment, followed by BlackRock, Apollo Funds, Intercontinental Exchange, SBI Group, Standard Chartered Ventures, ARK Invest, and others.
Arc functions as a public Layer 1 blockchain built specifically for institutional finance. It uses USDC itself as the native gas token rather than relying on ether or other crypto-native assets. The network offers sub-second finality, opt-in privacy features, and full compatibility with the Ethereum Virtual Machine (EVM). Testing began in October, and the whitepaper describes the ARC token as a native coordination asset that handles governance, validator security, and overall network operations. If successful, Arc would allow Circle to capture more of the infrastructure that USDC currently depends on, reducing its exposure to traditional crypto settlement options on Ethereum and Solana.
Circle also faces direct competition from the issuer of the largest stablecoin, as Tether made a parallel move late last year by launching StableChain. The mainnet went live in December 2025 alongside a native STABLE token used for governance staking and validator incentives. Like Arc, the network centers entirely on stablecoin transactions (in this case, Tether’s USDT) to support high-volume, predictable real-world settlements. Much like Circle, Tether aims to position USDT as the default base currency across blockchain financial activity.
Even companies outside the stablecoin business have pursued their own proprietary blockchains. Coinbase operates Base, an Ethereum Layer 2 that stands out as the most advanced in terms of adoption and development among similar efforts. The network funnels users from Coinbase’s exchange toward on-chain activity, promotes USDC as the primary currency, and abstracts away much of the complexity around gas fees. Notably, Coinbase maintains an investment in Circle and played a role in USDC’s original launch. Additionally, Kraken and Robinhood both have their own blockchain projects, with Robinhood focusing on the tokenization of stocks in an effort to enable features such as global access and 24/7 trading. The New York Stock Exchange also has its own tokenization effort in development.
While stablecoins first gained traction on Ethereum, where they became the main fuel for decentralized finance (DeFi) growth and liquidity, the expenses tied to full decentralization may not justify themselves when distributing centrally issued assets like USDC or USDT. Issuers can seemingly achieve the regulatory advantages of blockchain technology without needing genuine decentralization in today’s regulatory environment, which critics have said lacks integrity or is outright corrupt. This calculation could explain why stablecoin companies and fintech platforms are now spinning up their own chains rather than continuing to build exclusively on existing public networks. And stablecoin issuers hold a critical moat in the form of the banking infrastructure that backs their dollar-based tokens, which lets them direct end users toward their preferred infrastructure.
At the same time that stablecoins are eating the crypto market, bitcoin continues to serve as the most trusted form of truly decentralized digital cash. Ethereum, therefore, occupies an awkward middle ground. It appears too centralized to challenge Bitcoin on the decentralization front, yet too decentralized to match the efficiency and control offered by Circle, Coinbase, or Tether. Of course, Ethereum supporters maintain that the network delivers the optimal balance and will ultimately capture the vast majority of crypto activity across all segments. In some ways, it can be viewed as an “all or nothing” gamble.
The split between Bitcoin and stablecoins has become the central fault line dividing the crypto industry into two camps. One side consists of decentralization-focused cypherpunks who prioritize Bitcoin’s original vision of peer-to-peer electronic cash free from trusted intermediaries. The other comprises adoption-driven fintech entrepreneurs who see stablecoins as the practical path to mainstream integration. That said, opportunities for cooperation also exist. Tether, for example, holds bitcoin as part of the reserves backing its USDT stablecoin. Such arrangements highlight how synergies between these two factions can still exist going forward.
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