Why Circle, Stripe, and Tech Giants Are Betting Big on Proprietary Blockchains in 2025

The race for blockchain dominance just got hotter—and more centralized.

Silicon Valley’s elite are ditching Ethereum’s gas fees and Solana’s outages for chains they control. Circle’s USDC empire now prints its own rules. Stripe’s back—but this time, it’s bypassing Visa for a ledger only it can audit. Even PayPal’s lurking in the wings with a ‘trust us’ chain.

Here’s the dirty secret: every ‘decentralized’ corporate chain is just a database with tokenized PR. But when TradFi yields crater and VC money dries up? Suddenly, ‘owning the rails’ looks better than quarterly earnings.

Wall Street’s response? A shrug and a leveraged short. The real winners? Lawyers—patenting ‘permissioned DeFi’ while retail bags the gas fees.

Why build L1s?

Today, the vast majority of these tokens live and settle on public blockchains like Ethereum, solana or Tron. These neutral networks give issuers global reach and liquidity, but they also come with certain constraints for asset issuers.

"Building their own L1 is about control and strategic positioning, not just technology," said Martin Burgherr, chief clients officer at crypto bank Sygnum.

Stablecoin economics are shaped by settlement speed, interoperability, and regulatory alignment, so "owning the base layer" lets firms directly embed compliance, integrate foreign exchange engine and ensure predictable fees, he said.

There’s also a defensive motive. "Today, stablecoin issuers depend on Ethereum, TRON or others for settlement," Burgherr said. "That reliance means exposure to external fee markets, protocol governance decisions, and technical bottlenecks."

Custom chains allow companies to issue their own gas tokens, control transaction costs and keep network performance isolated from unrelated activity that may clog the network, said Morgan Krupetsky, VP of ecosystem growth at Ava Labs.

Increasingly, she said, blockchains are becoming the "middle and back office" of a company’s operations, powering transactions behind the scenes while user-facing apps may live across multiple chains.

“The idea of a company owning and customizing their end-to-end blockchain infrastructure is increasingly appealing,” she said.

The economics can be even more compelling than the tech. "The revenue opportunity from owning the settlement LAYER will dwarf traditional payment processing margins, said Guillaume Poncin, chief technology officer at web3 development platform Alchemy.

He said that the new chains can offer additional control and the ability to implement know-your-customer (KYC) checks and other innovations at the protocol level. While L1s can offer full customization, rollups are faster to deploy and secure.

In either case, Poncin noted, compatibility with ethereum Virtual Machine (EVM) makes it far easier to integrate with other blockchains and speed adoption.

How could this impact existing L1s?

It's way too early to tell how the new chains will impact the incumbents, but some networks may feel the competition sooner than others, analysts said.

Coinbase analysts led by David Duong argued in a Friday report that Circle's Arc and Stripe's Tempo are targeting high-throughput, low-fee payments, which is Solana's (SOL) sweet spot. Meanwhile, Ethereum with its institution-heavy user base is less likely to be disrupted in the near term, they wrote.

The process for the entrants to win over users could take years, Sygnum's Burgherr said.

"New entrants will need not just technology, but also years of trust-building to shift the deepest liquidity and highest-value payments away from incumbent rails," he said. "Financial institutions prize proven security, custody integration, and resilience under real-world stress."

"That's why Ethereum remains the institutional ‘Fort Knox,’" he said.