Circle and Stripe Move Toward Overlapping Stablecoin Infrastructure

Original | Odaily Planet Daily (@OdailyChina)

Author | DingDang (@XiaMiPP)

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

Circle is responsible for mapping real-world U.S. dollars onto the blockchain to mint the stablecoin USDC; Stripe, through its global internet payment network, enables these digital dollars to flow in real-world commercial scenarios. One is responsible for creating money, the other for making it move. These two allies have been naturally complementary over the past several years.

But when you look at these two recent events together, they create a subtle feeling: these two companies seem to be slowly heading toward the same place.

On February 11, Stripe announced the launch of the x402 payment feature on Base. This feature enables developers to charge AI agents directly using USDC, transforming stablecoins from mere pricing tools on exchanges into payment mediums for machine-to-machine transactions in the AI Agent wave.

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

On one hand, Stripe is building new payment scenarios using USDC; on the other, it is developing its own stablecoin financial infrastructure.

The legacy stablecoin supply chain

If you break down the stablecoin world, the supply chain is actually not complicated.

At the bottom is the issuance layer. Institutions like Circle are responsible for mapping real-world USD reserves onto the blockchain and minting stablecoins such as USDC. Above that is the settlement layer, where blockchain networks handle accounting and clearing of funds. Moving upward is the payment layer, where internet payment infrastructure like Stripe integrates stablecoins into real commercial transactions, enabling on-chain funds to enter scenarios such as e-commerce, SaaS, and cross-border trade. At the top is the application layer, where various specific financial activities occur—from DeFi to AI agent payments.

When stablecoins were merely tools in the crypto market, participants in this industry chain each fulfilled their distinct roles: issuers handled minting, payment platforms handled collecting funds, blockchains handled settlement, and developers focused on use cases.

As early as 2014, Stripe was among the first mainstream payment processors to support Bitcoin payments. However, due to issues such as excessive Bitcoin price volatility, lengthy transaction confirmation times, and unpredictable fees, this initiative was reluctantly scaled back in 2018. Bitcoin proved to be more of a speculative asset than a practical currency for internet payments.

The emergence of stablecoins precisely filled this gap. USDC’s price stability, programmability, and on-chain settlement capabilities make it closer to Stripe’s ideal of a “native internet currency.” In 2022, Stripe re-entered the crypto space and chose 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, with its market cap briefly surpassing $55 billion.

Under this collaborative relationship, Circle provides the stable digital dollar, Stripe provides the global payment network, and together they have helped USDC evolve from a cryptocurrency trading tool into a market nearing $70 billion.

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

Meanwhile, the external regulatory environment has also undergone significant changes. With the formal implementation of the GENIUS Act, stablecoins—once a financial experiment operating in regulatory gray areas—are gradually being integrated into the legitimate financial system. Today, the stablecoin market has surpassed $300 billion in size. In the future, this market could evolve into a financial network with a scale in the trillions of dollars.

Stablecoins are no longer just internal tools of the crypto market; they are increasingly viewed as part of the next-generation financial infrastructure. When a market evolves from a crypto tool into financial infrastructure, the industry logic often changes accordingly.

When stablecoins become infrastructure

In any financial system, truly stable profits rarely come from a single环节, but from control over key nodes. Whoever controls the channels of capital flow can define the rules.

If a stablecoin is merely the underlying asset, while payment gateways, developer tools, and commercial use cases are all controlled by other platforms, the issuer’s potential earnings will be severely limited. In contrast, if control lies with the payment network or settlement system, value can be continuously captured at every stage of fund movement.

Therefore, as stablecoins begin to evolve from a type of crypto asset into financial infrastructure, an almost inevitable trend emerges: roles within the industry, previously dispersed across different layers, start attempting to extend upstream and downstream, incorporating more stages into their own systems.

This process is not unfamiliar in financial history. From banking systems to credit card networks, and then to internet payment platforms, mature financial systems often eventually go through a similar phase—transitioning from fragmented roles toward structural integration.

Today, this wave of industry consolidation is also beginning to sweep through the world of stablecoins.

If the stablecoin supply chain is viewed as a vertical structure, then over the past few years, Circle and Stripe have occupied opposite ends of this chain. Now, both are moving toward the center.

Circle: Doesn't want to be just a "money printer"

In the on-chain ecosystem, the circulation efficiency and usage frequency of USDC can no longer be ignored. According to the latest stablecoin flow report, USDC's velocity is nearly five times that of USDT.

However, simply issuing stablecoins is not, in itself, a particularly imaginative business model.

The primary revenue sources for stablecoin issuers are broadly divided into two parts: interest income generated by reserve assets, and fees associated with the issuance and redemption of stablecoins. However, as stablecoin volumes continue to grow, these revenues are often shared with ecosystem partners. For example, Coinbase, one of the most important distribution channels for USDC, receives nearly $1 billion in profit sharing from the USDC ecosystem each year. This means that even though issuers hold the most critical role in the stablecoin system—the minting process—their actual disposable revenue is still constrained by the ecosystem structure.

This also explains why, over the past two years, Circle’s strategy has clearly expanded toward the application layer: it is no longer content with merely issuing stablecoins, but is aiming to build a complete stablecoin payment network.

Based on currently available public information, Circle’s application-level strategy appears to follow a three-step approach.

Step one: Arc, an L1 blockchain designed for enterprises, acts as a coordination layer at the application level to help developers build applications such as payments and settlements. Arc launched its testnet in October 2025 and has attracted over 100 companies, processing more than 166 million transactions; its mainnet is planned for launch within 2026.

Step two: Address liquidity fragmentation by using USDC as the core, through cross-chain transfer protocols (CCTP) and gateway tools. At the application layer, help businesses consolidate USDC from multiple chains into Arc and CPN for seamless distribution and application building.

Step three, and Circle’s core application-layer product, CPN (Circle Payments Network), launched in May 2025, is an “open standard” payment orchestration network designed for programmable, compliant, and auditable payments. To date, 55 financial institutions have registered, with an additional 74 under qualification review.

This layout enables Circle to gradually build up a comprehensive application infrastructure capable of supporting capital flows, moving beyond being just a stablecoin issuer.

Stripe: The "checkout" also wants to take control of the轨道

Stripe sits at the other end of the stablecoin ecosystem. As one of the world’s most important internet payment infrastructures, Stripe controls a massive merchant gateway. In 2025, the total payment volume processed on Stripe’s platform reached $1.9 trillion, a 34% year-over-year increase, equivalent to approximately 1.6% of global GDP. The payment systems of countless internet merchants—from Shopify to Amazon—are built on Stripe’s infrastructure. In a sense, Stripe does not create money, but it controls the gateway through which money flows.

However, if stablecoin issuers and blockchain networks jointly control the settlement layer, payment platforms may be reduced to mere technology service providers.

This is also why Stripe has begun systematically expanding into the upstream and downstream sectors of the industry in recent years.

In February 2025, Stripe completed its acquisition of the stablecoin infrastructure platform Bridge for $1.1 billion. Finally, on February 12 of this year, Bridge received conditional approval from the OCC, a crucial step for Stripe’s infrastructure plans.

Meanwhile, Stripe has partnered with Paradigm to co-develop the L1 blockchain Tempo, aiming to build a settlement chain specifically designed for internet finance. The public testnet launched in December 2025, with the mainnet scheduled to go live within 2026.

In addition, Stripe acquired the wallet infrastructure company Privy in 2025 to provide users with embedded wallets and identity systems, lowering the barrier to entry for on-chain finance.

When viewed together, these actions reveal a clear trend: Stripe is extending downstream from the payment gateway, aiming to control the underlying infrastructure of stablecoins.

The two companies meet in the middle of the supply chain.

Circle is expanding from the issuance layer toward the application layer, while Stripe is moving from the payment layer down toward the infrastructure layer. As both paths converge toward the center of the value chain, the previously clear boundaries are beginning to inevitably overlap.

Against the backdrop of a reshaping stablecoin industry structure, it serves as a reminder: competition among stablecoins is no longer just about “who issues more tokens.” The more important question for the future may be—who controls the pathways of stablecoin liquidity.

As issuance, settlement, payment, and applications gradually reintegrate, competition in the stablecoin world is shifting from "asset size" to "financial networks." On this new frontier, Circle and Stripe—once highly complementary allies—have begun to meet in the middle of the value chain.

The story of stablecoins is evolving from an experiment in the crypto industry into a reconstruction of the financial network.