As Stablecoins Gain Prominence, Old Partners Circle and Stripe Vie for Territory

Original | Odaily (@OdailyChina)

Author | DingDang (@XiaMiPP)

Within the stablecoin industry chain, Circle and Stripe were once a pair of partners with a very clear division of labor.

Circle was responsible for mapping real-world US dollars onto the blockchain, minting them into the stablecoin USDC; Stripe, through its global internet payment network, enabled these digital dollars to flow within real-world commercial scenarios. One was responsible for producing the money, the other for making it circulate. This alliance was almost naturally complementary over the past few years.

However, two recent events, when viewed together, evoke a subtle feeling: these two companies seem to be slowly converging towards the same space.

On February 11th, Stripe announced the launch of x402 payment functionality on Base. This feature allows developers to charge AI agents directly using USDC. Stablecoins are no longer just pricing tools within exchanges; in the wave of AI Agents, they are becoming the payment medium for transactions between machines.

In the same week, Bridge, Stripe's stablecoin infrastructure company, received preliminary approval for a trust bank charter from the U.S. Office of the Comptroller of the Currency (OCC). This means Bridge could potentially begin advancing businesses such as stablecoin issuance, custody, and reserve management as a regulated financial institution.

On one side, Stripe is building new payment scenarios with USDC; on the other, it is constructing its own stablecoin financial infrastructure.

The Stablecoin Industry Chain of the Old Era

If we deconstruct the stablecoin world, the industry chain is not particularly complex.

The bottom layer is the issuance layer. Institutions like Circle are responsible for mapping real-world US dollar reserves onto the blockchain, minting them into stablecoins like USDC. The next layer up is the settlement layer, where blockchain networks handle fund accounting and clearing. Continuing upward is the payment layer. Internet payment infrastructure like Stripe embeds stablecoins into real commercial transactions, enabling on-chain funds to enter scenarios like e-commerce, SaaS, or cross-border trade. At the top is the application layer. All sorts of specific financial activities happen here, from DeFi to AI Agent payments.

When stablecoins were merely tools for the crypto market, participants in this industry chain had clear, separate roles: issuers were responsible for "minting coins," payment platforms for "collecting money," blockchains for settlement, and developers focused on application scenarios.

As early as 2014, Stripe was among the first mainstream payment processors to support Bitcoin payments. However, due to issues like excessive Bitcoin price volatility, long transaction confirmation times, and unpredictable fees, this business venture was unfortunately scaled back in 2018. Bitcoin resembled a speculative asset more than a currency suitable for internet payments.

The emergence of stablecoins precisely filled this gap. USDC's price stability, programmability, and on-chain settlement capabilities made it closer to Stripe's ideal of an "internet-native currency." In 2022, Stripe re-entered the crypto space, choosing to support USDC payments. This move not only reintroduced stablecoins into the mainstream payment system but also objectively accelerated the rapid growth of USDC's circulation scale, with its market capitalization once exceeding $55 billion.

Under this synergistic relationship, Circle provided stable digital dollars, and Stripe provided a global payment network, jointly propelling USDC from a crypto trading tool to a market approaching $70 billion in scale.

On-chain data also confirms the scale effect brought by this synergy. According to Artemis data, in January, the volume of on-chain USDC transactions exceeded 8.4 trillion, while the total volume of on-chain stablecoin market transactions was 10 trillion. This means that in terms of transaction volume, USDC accounted for 84% of the total market share.

Simultaneously, the external regulatory environment underwent significant changes. With the formal enactment of the GENIUS Act, stablecoins—once a financial experiment operating in a regulatory gray area—are gradually being incorporated into the legitimate financial system. Today, the stablecoin market size has surpassed $300 billion. In the future, the scale this market carries could be a trillion-dollar-level financial network.

Stablecoins are no longer just internal tools for the crypto market but are beginning to be seen as part of the next generation of financial infrastructure. When a market evolves from a crypto tool to financial infrastructure, the industrial logic often changes accordingly.

When Stablecoins Become Infrastructure

In any financial system, truly stable profits often do not come from a single link but from control over key nodes. Whoever controls the channels of fund flow gets to define the rules.

If stablecoins are merely the underlying asset, while payment gateways, developer tools, and commercial scenarios are all controlled by other platforms, the actual profits issuers can ultimately obtain are quite limited. Conversely, if one controls the payment network or settlement system, they can continuously extract value from every step of the fund flow.

Therefore, as stablecoins begin to evolve from a crypto asset into financial infrastructure, an almost inevitable trend emerges: originally dispersed industrial roles across different layers start attempting to extend into upstream and downstream segments, bringing more links into their own systems.

This process is not unfamiliar in financial history. From banking systems to credit card networks, to internet payment platforms, mature financial systems often eventually undergo a similar stage—transitioning from role dispersion towards structural integration.

Now, this wind of industrial integration is also beginning to blow through the world of stablecoins.

If we view the stablecoin industry chain as a vertical structure, then over the past few years, Circle and Stripe stood at opposite ends of this chain. Now, they are both moving towards the center.

Circle: Not Wanting to Be Just a "Money Printer"

Within the on-chain ecosystem, the circulation efficiency and usage frequency of USDC have long been impossible to ignore. In the latest stablecoin flow report, USDC's velocity of circulation is almost 5 times that of USDT.

However, relying solely on issuing stablecoins is not an exceptionally imaginative business model in itself.

The main revenue sources for stablecoin issuers are roughly divided into two parts: first, the interest income generated by reserve assets, and second, the fees associated with the issuance and redemption of stablecoins. But as the stablecoin scale expands, this revenue often still needs to be shared with ecosystem partners. For example, as one of the most important distribution channels for USDC, Coinbase receives nearly $1 billion in profit sharing from the USDC system annually. This means that even though issuers bear the core "minting" role in the stablecoin system, their actual disposable profit space is still constrained by the ecosystem structure.

This also explains why, over the past two years, Circle's strategy has clearly begun extending towards the application layer: it is no longer satisfied with merely issuing stablecoins but is attempting to build a complete stablecoin payment network.

Based on current public information, Circle's layout at the application layer roughly follows three steps.

First, the enterprise-focused L1 blockchain Arc. It plays a "coordination layer" role at the application level, helping developers build applications for payments, settlement, etc. Arc launched its testnet in October 2025, has attracted 100+ companies to participate, processed over 166 million transactions, with its mainnet planned for launch within 2026.

Second, with USDC at the core, using the Cross-Chain Transfer Protocol (CCTP) and gateway tools to solve liquidity fragmentation. At the application layer, it helps enterprises unify USDC from multiple chains onto Arc and CPN, enabling seamless distribution and application building.

Third, and the core application-layer product for Circle, is CPN (Circle Payments Network). Launched in May 2025, it is an "open standard" payment coordination network designed for programmable, compliant, and auditable payments. So far, 55 financial institutions have registered, with another 74 undergoing qualification review.

This layout shows that Circle is evolving from a pure stablecoin issuer to gradually building a complete set of application infrastructure capable of carrying fund flows.

Stripe: The "Checkout Counter" Also Wants to Control the Track

Stripe, on the other hand, sits at the opposite end of the stablecoin system. As one of the world's most important internet payment infrastructures, Stripe controls massive merchant gateways. In 2025, the total payment volume processed on the Stripe platform reached $1.9 trillion, a year-on-year increase of 34%, equivalent to approximately 1.6% of global GDP. From Shopify to Amazon, the payment systems of numerous internet merchants are built on Stripe's infrastructure. In a sense, Stripe does not produce currency, but it controls the entry points for currency flow.

But if in the future, stablecoin issuers and blockchain networks jointly control the settlement layer, payment platforms might be compressed into mere technical service providers.

This is also why Stripe has systematically begun laying out across the industry chain's upstream and downstream in recent years.

In February 2025, Stripe completed the acquisition of the stablecoin infrastructure platform Bridge for $1.1 billion. Finally, on February 12th of this year, Bridge received conditional approval from the OCC, which is the most critical piece for Stripe's infrastructure ambitions.

Simultaneously, Stripe co-incubated the L1 public chain Tempo with Paradigm, aiming to build a settlement chain specifically for internet finance. The public testnet went live in December 2025, with the mainnet planned for launch within 2026.

Additionally, in 2025, Stripe acquired wallet infrastructure company Privy, providing users with embedded wallets and identity systems, thereby lowering the barrier for users to enter the on-chain financial system.

When these moves are viewed together, a very clear trend emerges: Stripe is extending downwards from the payment gateway, attempting to control the underlying tracks on which stablecoins run.

Two Companies Meeting in the Middle of the Industry Chain

Circle is extending from the issuance layer towards the application layer, while Stripe is descending from the payment layer towards infrastructure. As both paths move towards the center of the industry chain, the originally clear boundaries inevitably begin to overlap.

Against the backdrop of the ongoing reshaping of the stablecoin industrial structure, this serves more as a reminder: the competition for stablecoins is no longer just about "who issues more tokens." The truly important question for the future might be—who controls the tracks of stablecoin flow.

As issuance, settlement, payment, and application are gradually reintegrated, competition in the stablecoin world will also shift from "asset scale" to "financial network." And on this new track, Circle and Stripe, once highly complementary allies, have already begun to meet in the middle of the industry chain.

The story of stablecoins is also transforming from a crypto industry experiment into a reconstruction of financial networks.

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