Stablecoin issuers are moving towards “bankization”, Polkadot plans to launch a real Web3 stablecoin

Over the past 24 hours, the crypto industry has ushered in a new wave of action regarding stablecoins.

Circle announced the launch of a new public chain called Arc, an EVM Layer 1 designed for stablecoin finance and asset tokenization, using USDC as a native gas asset and equipped with a licensed institutional validator targeting global payments, foreign exchange settlement, and capital markets.

At around the same time, payment giant Stripe was revealed to be cooperating with Paradigm to develop the Tempo blockchain. Combined with the previously acquired stablecoin infrastructure company Bridge and wallet developer Privy, Stripe's stablecoin ecosystem is rapidly taking shape. Meanwhile, USDT issuer Tether is not idle, and is stepping up its own chain Plasma/Stable to further bind its dominant position on exchanges and the C-side.

What these giants have in common is that they are no longer satisfied with issuing tokens on the existing chain, but they must control the operating rules of the entire chain themselves, and bring everything from users to validator nodes within a manageable range.

If you want to find a point in time to explain the background of this wave of “self-built stablecoin chains,” the US “GENIUS Act” in July of this year is undoubtedly the key trigger. Signed by President Trump, the bill provides a clear legal framework for stablecoin issuance, settlement, and reserve management for the first time at the federal level.

For companies like Circle and Stripe that already operate under a license and have close relationships with financial institutions, it's an open “passport” — the foundation for compliance is in place, and all that's left is who can take the technical foundation of the stablecoin business into their own hands faster and more thoroughly. As a result, we have seen that they all speed up their own chain R&D, and strive to complete infrastructure layout before policy dividends are realized.

However, in several interviews at the recent Web3 Summit, Gavin Wood mentioned that stablecoin issuers are essentially already banks. Like USDC and USDT, they are now becoming more and more like banks, and they are the kind of centralized banks that are highly regulated.

Gavin Wood: USDT is an extremely regulated centralized bank! The more compliant, the more you deviate from the original intention?》

If Circle and Stripe build their own EVM chain, they're likely to become more centralized — not only at the governance level, but also control over transaction processing, validator selection, and compliance rules.

Company-led chains often prioritize regulatory compliance and operational efficiency before decentralization, which could mean:

• The certifier is licensed, and no one can participate;

• Enforce strict KYC/AML requirements for all users;

• Upgrades and rulemaking are driven by Circle's commercial priorities, and decision-making is highly focused;

• The contract-level freeze and blacklist mechanism allows assets to be “suspended” at any time.

Once most of the world's stablecoin settlements are monopolized by a few centralized institutions, the entire industry will face huge single-point risk and centralized governance problems. At that time, the so-called “chain” was more like an enterprise's own private ledger, only covered by blockchain.

So, while it may still be “EVM compatible,” the spiritual kernel will gradually move away from the open, permissionless design of Ethereum.

Some people think that so many giants are developing their own EVM chains to be good for Ethereum; the only benefit I see is that these giants will take away Ethereum's users and liquidity. These giants will only tell you that what is really valuable is EVM, not Ethereum or ETH.

Of course, we're not denying that this is good news. After all, the influx of institutions will still bring more liquidity to the entire crypto industry, but at the same time, it also harbors a “crisis” and the next opportunity — decentralized stablecoins.

Decentralized stablecoins generally refer to stablecoins that do not rely on a single centralized issuer, such as cryptographic collateral or algorithmic, in contrast to centralized stablecoins (such as USDT and USDC).

Currently, the overall stablecoin market is over $250 billion, but decentralized stablecoins account for a relatively small share and are mainly active in the DeFi sector.

1. Crypto-collateralized (Crypto-collateralized):

Other crypto assets (such as ETH) are locked in as overcollateral (usually 150% or more) through smart contracts to maintain a 1:1 anchor to the dollar. It relies on decentralized oracles to provide real-time price data and handle fluctuation risks through automated clearing mechanisms. This type of stablecoin emphasizes decentralization and transparency, but is sensitive to collateral fluctuations. Examples include DAI (MakerDAO), LUSD (Liquity), sUSD (Synthetix), etc.

2. Algorithmic:

It does not rely on complete reserves, but rather maintains anchoring through algorithms and market incentives (such as supply-elastic adjustments or dual-token models). Subtypes include re-basing (rebasing, such as automatically adjusting supply) and minting tax models (seigniorage, such as issuing bond tokens). Examples include Ampleforth (AMPL), Basis Cash, TerraUSD (UST, crashed), Frax (partial algorithm), etc.

This type of stablecoin is highly decentralized, yet vulnerable to market scares. UST's collapse in 2022 cost $40 billion, highlighting the fragility of the algorithm. Many projects have moved to a hybrid model to improve stability.

3. Hybrid (Hybrid):

Combine cryptographic collateral, hedging, yield, algorithmic elements, or incorporate real-world assets (RWA, such as short-term treasury bonds). The collateral ratio is adjusted dynamically and may generate benefits (such as an annualized 5% APY). Examples include Frax, USDD (Tron), USDY (Ondo USD Yield), GHO (Aave), USDE (Ethena), etc.

This type of stablecoin is more flexible and suitable for cross-chain applications, but the regulations are complicated (such as USDY restricting US users). In 2025, hybrid growth was rapid, driven by RWA trends.

According to 2025 data, the overall stablecoin market capitalization is approximately $259.15 billion, of which dollar-anchored stablecoins account for 99%. Decentralized stablecoins have a small market share (about 5-10%), mainly due to the liquidity advantages of centralized stablecoins (such as USDT accounts for 60-70% and USDC accounts for 25%).

Together, Tether and Circle account for approximately 90% + of the market supply.

The decentralized stablecoins Sky (DAI) and Ethena (USdE) are the main decentralized stablecoin projects in the top ten, but there is a big gap in market capitalization compared to leading fiat-backed stablecoins. But decentralized stablecoins account for a higher share of DeFi, driving innovation such as lending and derivatives.

In addition, traditional finance and payment giants such as PayPal and World Liberty Financial are also squeezing into the stablecoin issuance circuit.

The stablecoin supply grew 39% in 2025, with monthly trading volume reaching $1.5 trillion. Decentralized stablecoins such as USdE grew 84%, benefiting from clear regulations (such as EU MiCA regulations) and cross-chain interoperability. However, the share of algorithms declined due to risky events.

In terms of platform distribution, Ethereum accounts for over 55% and Tron 34%. Solana and Base are growing to support more decentralized distribution.

• Ethereum has an absolute advantage in the total market value of stablecoins and total transfers ($1.6 trillion in monthly transaction volume), but the number of holders is relatively small, indicating that Ethereum is more of an institutional and high-value transaction usage scenario.

• Tron is far ahead in terms of number of holders and number of transfers (66.59 million holders), but the total transaction volume is lower than Ethereum, meaning it is more popular for micropayments and cross-border remittances.

• Base's number of transfers over the past 30 days (74.4 million) is close to Tron, and the total amount of transfers ($1.24 trillion) is close to Ethereum, indicating its rapid rise on the stablecoin transfer circuit

Additionally, some reports predict that the market could reach $2-3.7 trillion by 2030, and the share of decentralization could rise to 10-15%, mainly driven by DeFi and RWA.

Yes, if you noticed Gavin Wood's speech at the Web3 Summit some time ago, you should already know that Polkadot will also issue a native stablecoin and ensure complete decentralization.

Gavin said this will be one of the directions he is driving — building a true Web3 stablecoin.

• It must be decentralized and must not have a centralized issuer;

• It must be sound, and it must have economically reasonable and demonstrable mechanisms to maintain its value;

• It must be capital efficient; many so-called decentralized stablecoins are very low in terms of capital efficiency;

• It must be inclusive, expandable, and universal.

Currently, most of the widely used stablecoins are centralized; they are just the shell of Web2.

Although there is currently no further information about this stablecoin, judging from the information released by Gavin at the Web3 Summit, DOT will participate in this project as part of the collateral and will launch it through a treasury proposal.

So, will this native stablecoin be HOLLAR?

If you are closely following the evolution of Polkadot's ecosystem, then you should know that HOLLAR is a decentralized, overcollateralized stablecoin announced by Hydration (formerly HydraDX) in March of this year. It is anchored to the US dollar (1 HOLLAR = 1 USD) and is used in trading, lending, and payment scenarios. HOLLAR is native to Hydration and Polkadot.

It's based on the smart contract mechanism that powers the AAVE stablecoin GHO, which allows anyone to mint HOLLAR after providing collateral. Its current design is:

• Deep integration with capital-efficient AMM, cooperating with on-chain routers to find the most efficient transaction path and provide excellent liquidity;

• The interest income generated will flow into the Hydration treasury to form a sustainable revenue stream;

• Complete governance control is achieved by the Hydration community through OpenGov, Web3's most advanced governance mechanism;

• Prioritize on-chain clearing to improve stability and reduce risk;

• Provide liquidity incentives for casting HOLLAR.

Currently, the latest information is that Hydration is completing final preparations for HOLLAR to go live on the test network.

However, there is no official confirmation as to whether the stablecoin Gavin is referring to is HOLLAR.

Regardless of the answer, this means that Polkadot will enter the decentralized stablecoin market, bringing truly decentralized value anchoring assets to Web3. Follow PolkaWorld and we'll continue to follow up on this development.

It is foreseeable that centralized stablecoin chains and decentralized stablecoin networks will coexist, but they represent two very different values. The former pursues compliance, controllability and operational efficiency at the expense of openness and censorship resistance; the latter pursues financial sovereignty and public attributes, and may require exploring more balance in terms of performance and compliance.

The implementation of US stablecoin legislation will undoubtedly accelerate this process of differentiation. Giants will use it to build “bank-based” chains, while public chain projects such as Ethereum and Polkadot will try to preserve the original intention of decentralization.

For users, which path you choose will determine whether you are a serviced customer or a truly autonomous participant in the future on-chain world.