Payment giant Stripe and stablecoin issuer Circle have simultaneously launched Layer 1, one mastering distribution capabilities and the other trying to upgrade stablecoins into a network. This is not just a race for speed, but a re-selection between 'open protocols' and 'branded rails.' (Background: Payment giant Stripe secretly developed a new chain 'Tempo,' integrating Bridge and Privy to streamline stablecoin payments.) (Context: When technology meets foreign exchange barriers: why is the growth of stablecoins difficult to break the 'traditional deadlock'?) This is not a competition of speed and functionality, but a re-selection between 'open protocols' and 'branded rails.' Two stablecoin Layer 1s in one day shook the entire crypto and fintech world. Stripe's 'Tempo' was revealed from its hidden state, while Circle officially announced 'Arc' within the rhythm of financial reports. On the surface, they both appear to be public chains optimized for payments. However, the underlying logic is completely different: one is a payment service provider mastering merchant and developer distribution capabilities, while the other is the issuer of USDC, attempting to upgrade a stablecoin into a network. L1 vs L2 First, let’s answer the most straightforward question: why not learn from Coinbase (Base), or plan their own L2 like Robinhood? If your advantage lies in distribution, in migrating a large base of users and merchants 'with one click' to the chain, then L2 is the most straightforward solution. Inheriting Ethereum's security and tool ecosystem allows for a quick launch while also benefiting from the economics of ordering. The rise of Base is not technically astounding; the key lies in Coinbase's traffic entry and application integration. This methodology has already been validated. So why are both Stripe and Circle talking about L1? Because 'payment chains' are becoming an independent track. A group of L1s centered around Tether (Stable and Plasma) is pushing a narrative: stablecoins need a native, payment-oriented base layer—stablecoins as gas, predictable fees, sub-second settlements—instead of forever being 'guests' residing on general public chains. The pressure on Circle is evident: if competitors' dollar stablecoins start binding their own settlement layers, USDC cannot forever be just 'a token'; it must also become 'that rail.' Understanding Circle Zooming in on Circle, their actions are not simply 'defensive.' Arc and Circle Payments Network (CPN) are both making coordinated efforts, resembling Visa's 'network of networks' strategy moved onto the chain. Open, EVM-compatible, USDC native, aimed at payments and foreign exchange, and also preparing for capital market scenarios. Its core lies in a strategic concession: if Circle chooses to give more front-end revenue to issuing/distributing partners, taking only a minimal network fee in exchange for stronger network externality. This is precisely the winning path of card organizations back then: lower commissions, first to popularize, gain trust, and lay down endpoints. In this context, 'Arc vs Stable/Plasma' is more critical than 'Circle vs Coinbase.' If the Tether system's payment chain establishes 'stablecoin native + low-friction payment experience' as the industry standard, Circle cannot just build a bridge to others' rails; it must possess a truly reliable track. Meanwhile, openness is not just a slogan: the distribution and threshold of notarized nodes, the public nature of developer tools, and the ease of cross-chain and withdrawal determine whether Arc is 'public infrastructure' or merely a branded proprietary channel in a new outfit. Otherwise, it will fall into the 'decentralization—scaling—re-centralization' vicious cycle. Understanding Stripe Returning to Stripe, whether Tempo is suitable for L1 depends on whether it is 'truly open.' If Tempo is fully public, minimizes permission, is EVM-compatible, and natively interoperable, Stripe can transform its distribution power into a cold-start engine for a public network. It is not about building a 'merchant garden,' but illuminating a public road that is fair to all participants. Conversely, if governance, validation, and bridging are closely tied to Stripe itself, the ecosystem will quickly generate concerns about dependency risks: what is an accessible 'shortcut' today may become an unavoidable 'toll booth' tomorrow. Visa has long provided the industry with a lesson: to establish universal trust, one must first enable interoperability, which can then generate brand value. Therefore, the judgment of 'who should do L1, who is more suited for L2' corresponds to the business model. For issuers like Circle, moving towards the network layer is inherently reasonable. USDC as gas, optional privacy, deterministic settlement, and built-in FX have appeal for cross-border B2B, platform-type merchants, and certain capital market workflows; competitive pressures also push it to quickly transform 'scale' into 'network power.' For PSPs like Stripe, having grasped 'the last mile,' a second layer is often the better solution. Carrying the burden of L1 governance and security can be reduced, enjoying the combinatorial benefits and developer goodwill of a second layer; unless Tempo incorporates 'openness' into its systems and technology from day one. Offense vs Defense There is a popular judgment in the market regarding the L1s of the two companies: Stripe is on the offense, Circle is on the defense. This intuition is correct but not complete. Stripe can indeed compress cold-start costs due to its distribution advantages, lighting up demand with a command; Circle, however, does not have control over the user end, with activities scattered across multiple chains and partners. But if we view Arc + CPN as the on-chain version of the 'Visa methodology,' Circle appears to be rewriting the rules of the game with a network strategy. It commodifies the peripheral elements and standardizes the core settlement layer. Even if significant front-end revenue is given to issuing parties, exchanges, or PSPs, it should yield a larger network presence. In this way, it does not need to chase the volume of Base but instead redefine its own chessboard. The real systemic risk is 'fragmentation disguised as progress.' If every major company builds a 'semi-open' payment chain, we will revert to the era of proprietary networks before the Internet. Interoperability would be strained through adapters, resulting in high costs and poor resilience. The standard for judgment should not be TPS, but: is it reliably open; is it easy to exit; is it equally friendly to 'non-cooperative partners'? The ability to scale without sacrificing the openness of protocols is the essence to escape the 'decentralization—scaling—re-centralization' vicious cycle. Moving to the execution level, I recommend a few 'hard metrics' for both companies. For Circle: launch the public test network on schedule; refine the process of serving real merchants with 'USDC as gas' to the point where it requires no training to use; publish transparent, externally participatory validation node standards; ensure CPN maintains multi-chain principles clearly, avoiding short-sighted incentives of 'steering traffic to its own chain.' For Stripe: either pivot to L2 like Celo or push Tempo's level of openness to the extreme: bring in external validators early, and separate client-side and...

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