Stripe’s Stablecoin Dominance Challenged as Hyperliquid’s USDH Gains Traction

Another day, another dollar-pegged token shaking up the payments space—because apparently traditional banking wasn't complicated enough.

The New Contender

Hyperliquid's USDH stablecoin is making waves where Stripe once sailed smoothly. Built on decentralized infrastructure, USDH cuts through legacy payment rails and bypasses traditional banking bottlenecks. No middlemen, no delays—just pure settlement velocity.

Market Dynamics Shift

Payment processors now face real competition from agile crypto-native solutions. These platforms don't ask for permission—they just execute. While established players tout compliance, decentralized alternatives deliver results without the paperwork parade.

Finance's Ironic Twist

Banking giants spent decades building moats—only to watch crypto bridges render them obsolete overnight. The real competition isn't between stablecoins—it's between legacy systems clinging to paperwork and code that actually works.

Agora and MoonPay Push Back Against Stripe

Agora quickly responded with an alternative proposal. CEO Nick Van Eck said that Stripe should not issue USDH because it could create conflicts of interest. 

“If Hyperliquid relinquishes its canonical stablecoin to Stripe, a vertically integrated issuer with clear conflicts, what are we all even doing?” he asked. 

Van Eck also said Stripe’s Bridge does not have enough experience or tools to manage USDH, and warned that Stripe’s own Tempo blockchain project could take users away from Hyperliquid.

“How long until Stripe and Bridge start pushing users and perps from other financial applications directly to Tempo instead of Hyperliquid?” he added.

@moonpay will officially be joining the coalition to light up USDH across all of their rails on Day 1.

"@moonpay has more licenses and KYCed users than both Stripe and Bridge." – @KeithGrossman.

Access to tens of millions of new users for the Hyperliquid ecosystem on Day…

On Sunday, MoonPay joined Agora’s proposal. Keyth Grossman, MoonPay’s president, said their company would provide regulated payment rails to help launch USDH. 

He criticized the Native Markets plan, saying: “USDH deserves scale, credibility and alignment — not BS capture. That is this coalition, not Stripe.” Rob Hadick, a partner at Dragonfly.xyz, supported the coalition and called it the “unarguable best” proposal for issuing USDH.

👇 the slightly better proposal has now become the unarguable best

(Yes, I’ve invested in agora and rain because they are both incredible companies. That’s not a gotcha so stop trying to make it one) https://t.co/dIFGJTfpev

Other Competitors Join the Race

Meanwhile, Stablecoin issuer Paxos also entered the race with a proposal to launch USDH. The firm pledged to direct part of the interest earned from reserves to buy back Hyperliquid’s native HYPE token and distribute it to users, validators, and partner protocols. 

Frax also submitted a plan, saying it would return all earnings from USDH, backed by its frxUSD stablecoin, back to the Hyperliquid community. “We’re proposing something no one else will match: give everything back to the community,” their proposal said.

Hyperliquid now relies mostly on Circle’s USDC for trading and liquidity. In August alone, Hyperliquid handled $398 billion in perpetual derivatives and $20 billion in spot trades. Most of this used USDC.

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