Author: Blue Fox Notes Some have asked whether Ethereum might collapse if stablecoin issuers like Circle (USDC) and Tether (USDT) were to build public blockchainsAuthor: Blue Fox Notes Some have asked whether Ethereum might collapse if stablecoin issuers like Circle (USDC) and Tether (USDT) were to build public blockchains

Don't worry, the public chains of USDC and USDT cannot shake Ethereum.

2026/02/27 20:12
4 min read

Author: Blue Fox Notes

Some have asked whether Ethereum might collapse if stablecoin issuers like Circle (USDC) and Tether (USDT) were to build public blockchains. I wasn't initially planning to respond to this, but several people have messaged me about it. So, I'll briefly discuss it.

Don't worry, the public chains of USDC and USDT cannot shake Ethereum.

In conclusion, Ethereum will not fail as a result. In fact, it will benefit overall.

In the future battle for stablecoins, the most important factor is the front-end distribution channels: Meta, MrBeast (Tom Lee's Bitmine has invested $200 million), Robinhood, Aave, Polymarket, Lighter, Uniswap, exchanges, wallets… Stablecoin issuers are not the strongest in the entire chain, and their L public chain does not naturally possess network effects.

Major players like Meta won't just support Circle's chain, but will support multiple chains; channels like MrBeast, which are expected to be deeply integrated with the Ethereum ecosystem in the future, will prioritize supporting Ethereum; Robinhood is also building its L2 network (Ethereum ecosystem) on Arbitrum, and may become an independent L2 in the future; Polymarket also plans to build an Ethereum L2...

The source of network effects lies where users are reached. As long as Ethereum L1/L2 fees are low enough and speeds are fast enough (at the same level), its security and decentralization advantages are unparalleled. Currently, Ethereum L1 is moving towards 10,000 TPS, and L2 is moving towards over one million TPS, so fees and speed will not be issues in the future.

Issuers building their own blockchains will not lead to a large-scale migration of traffic; on the contrary, it may eventually become Ethereum L2.

Arc is an L1 chain developed by Circle, supporting USDC as its native gas fee, sub-second settlement, and institutional-grade privacy/compliance. It is expected to launch later this year. Even so, USDC is still issued on multiple chains, including Ethereum and Solana, with the Ethereum ecosystem still holding the majority share. How it will develop after launch remains largely unknown. Tether's USDT also operates on multiple chains.

Each stablecoin issuer builds its own L1 chain, creating competitive pressure and making it difficult to run on each other's chains. The Ethereum ecosystem, however, is inclusive and will remain the most important chain for supporting different stablecoins.

Multi-chain issuance of stablecoins is the norm, meaning that even with the launch of ARC, it will only supplement existing systems, not replace them. Stablecoins will have their own institutional trading scenarios, but their ultimate market share will not entirely depend on the stablecoin issuer, but rather on the distribution channels and high-frequency application scenarios. For distribution channels, fees, speed, and security are all important, and Ethereum currently offers the best balance among these three. Distribution channels cannot and will not ignore Ethereum.

Currently, Ethereum dominates the stablecoin market share, and its share continues to grow.

The total market capitalization of stablecoins in February 2026 was approximately $3100-$3200 (Data from DefiLlama/TRM Labs), of which:

• Ethereum: 52-60% (~1530-1650), 40% growth by 2025 (from 115B to 153B). It has the largest share, handling more than half of stablecoin activity.

• Tron: 25-30% (~830-840), dominated by USDT, but growth is slowing (fees have risen to $0.50 per transaction).

• Solana: 4.5% (~130), USDC accounts for 77%, benefiting from low fees (<0.01 USD/transaction).

• Other: BNB Chain grew by 133% (in 2025), but its market share is small; L2 such as Arbitrum/Base account for approximately 100%, and the total Ethereum ecosystem (L1+L2) exceeds 70%.

Furthermore, by currency, USDT is around 1840 (59%), and USDC is around 750 (24%). USDC is growing faster (+6.39% in February 2026), but most of it is on Ethereum.

In terms of transaction volume, stablecoin transfers exceeded $10.5T in January 2026 (a record high), with Ethereum handling the majority of institutional/DeFi traffic (projected to exceed ~40T for the whole year), far surpassing PayPal (20T) and approaching Visa (15T). These all demonstrate network effects. Do you really think that users will naturally migrate to a stablecoin blockchain simply because it's being created?

Ethereum still boasts the largest developer ecosystem, the most thriving DeFi ecosystem, and stable operation without downtime, leading institutions to place their trading scenarios on centralized L1 chains that might otherwise experience downtime.

Ethereum's competitor has always been itself, not any other chain. As long as its fees/speed are no less than any other L1 chain, its advantages in security and decentralization will be unparalleled.

Ethereum's future, besides stablecoins, also includes asset tokenization, DeFi, and the AI ​​agent economy. These are all major trends, and the L1 chain built by stablecoin issuers is not enough to kill Ethereum.

By the way, how is Tether, the largest stablecoin issuer, supporting the Plasma chain?

Market Opportunity
Notcoin Logo
Notcoin Price(NOT)
$0.0003731
$0.0003731$0.0003731
-1.08%
USD
Notcoin (NOT) Live Price Chart
Disclaimer: The articles reposted on this site are sourced from public platforms and are provided for informational purposes only. They do not necessarily reflect the views of MEXC. All rights remain with the original authors. If you believe any content infringes on third-party rights, please contact crypto.news@mexc.com for removal. MEXC makes no guarantees regarding the accuracy, completeness, or timeliness of the content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC.

You May Also Like

South Korea NTS Seed Phrase Leak: 4.8M$ PRTG Stolen

South Korea NTS Seed Phrase Leak: 4.8M$ PRTG Stolen

The post South Korea NTS Seed Phrase Leak: 4.8M$ PRTG Stolen appeared on BitcoinEthereumNews.com. South Korea NTS’s Crypto Wallet Security Blunder South Korea’s
Share
BitcoinEthereumNews2026/02/27 22:53
Why Is Crypto Crashing in 2026? Bitcoin ETFs Flip to Net Sellers While Smart Money Quietly Loads Pepeto at Six Zeros

Why Is Crypto Crashing in 2026? Bitcoin ETFs Flip to Net Sellers While Smart Money Quietly Loads Pepeto at Six Zeros

The answer to why crypto is crashing is hiding in plain sight. On the surface, Bitcoin ETFs just recorded two consecutive weeks of outflows totaling $1.7 billion
Share
Captainaltcoin2026/02/27 23:45
Whales Dump 200 Million XRP in Just 2 Weeks – Is XRP’s Price on the Verge of Collapse?

Whales Dump 200 Million XRP in Just 2 Weeks – Is XRP’s Price on the Verge of Collapse?

Whales offload 200 million XRP leaving market uncertainty behind. XRP faces potential collapse as whales drive major price shifts. Is XRP’s future in danger after massive sell-off by whales? XRP’s price has been under intense pressure recently as whales reportedly offloaded a staggering 200 million XRP over the past two weeks. This massive sell-off has raised alarms across the cryptocurrency community, as many wonder if the market is on the brink of collapse or just undergoing a temporary correction. According to crypto analyst Ali (@ali_charts), this surge in whale activity correlates directly with the price fluctuations seen in the past few weeks. XRP experienced a sharp spike in late July and early August, but the price quickly reversed as whales began to sell their holdings in large quantities. The increased volume during this period highlights the intensity of the sell-off, leaving many traders to question the future of XRP’s value. Whales have offloaded around 200 million $XRP in the last two weeks! pic.twitter.com/MiSQPpDwZM — Ali (@ali_charts) September 17, 2025 Also Read: Shiba Inu’s Price Is at a Tipping Point: Will It Break or Crash Soon? Can XRP Recover or Is a Bigger Decline Ahead? As the market absorbs the effects of the whale offload, technical indicators suggest that XRP may be facing a period of consolidation. The Relative Strength Index (RSI), currently sitting at 53.05, signals a neutral market stance, indicating that XRP could move in either direction. This leaves traders uncertain whether the XRP will break above its current resistance levels or continue to fall as more whales sell off their holdings. Source: Tradingview Additionally, the Bollinger Bands, suggest that XRP is nearing the upper limits of its range. This often points to a potential slowdown or pullback in price, further raising concerns about the future direction of the XRP. With the price currently around $3.02, many are questioning whether XRP can regain its footing or if it will continue to decline. The Aftermath of Whale Activity: Is XRP’s Future in Danger? Despite the large sell-off, XRP is not yet showing signs of total collapse. However, the market remains fragile, and the price is likely to remain volatile in the coming days. With whales continuing to influence price movements, many investors are watching closely to see if this trend will reverse or intensify. The coming weeks will be critical for determining whether XRP can stabilize or face further declines. The combination of whale offloading and technical indicators suggest that XRP’s price is at a crossroads. Traders and investors alike are waiting for clear signals to determine if the XRP will bounce back or continue its downward trajectory. Also Read: Metaplanet’s Bold Move: $15M U.S. Subsidiary to Supercharge Bitcoin Strategy The post Whales Dump 200 Million XRP in Just 2 Weeks – Is XRP’s Price on the Verge of Collapse? appeared first on 36Crypto.
Share
Coinstats2025/09/17 23:42