Stablecoin issuers are building their own blockchains to snap up a bigger chunk of the massive transaction fees generated by the $277 billion market.“Launching a dedicated chain gives issuers more control over settlement and compliance, but it also opens the door to new revenue from fees and network activity,” Ben Reynolds, managing director of stablecoins at BitGo, a crypto custody company, told DL News.That would be great for those individual issuers, but it also poses a massive challenge for Ethereum and Tron, which have captured more than 80% of the stablecoin market.If issuers move off these blockchains, it could punch a hole in their fee revenue, especially as stablecoins are projected to account for 12% of global payments by 2030.And for Ethereum itself, the trend could dampen the expectation of its biggest proponents like Young Cho, CEO of StablecoinX, an Ethena treasury company, that it will become the financial substrate of the future. Tether, Circle and StripeTether is already working with startups like Plasma to create dedicated blockchains for its $167 billion USDT stablecoin. In August, Circle and fintech giant Stripe announced plans to create their own stablecoin blockchains.Tether and Circle are the two biggest stablecoin issuers, and they account for almost a quarter of the daily transaction fees across the entire DeFi sector, data from DefiLlama shows.To them, this is as much about controlling the infrastructure as it is about profit, according to Aishwary Gupta, global head of payments, exchanges and real-world assets at Polygon Labs.“It’s always said in the payment world, ‘he who controls the rails, controls everything,’’’ Gupta told DL News.Bad for Ethereum?Cho said these newer blockchains optimised for stablecoin-specific use cases like payments and yield could “fragment activity and reduce Ethereum’s centrality,” in the market.Ethena also has its purpose-built stablecoin blockchain called Converge but as an Ethereum layer 2 blockchain, Cho said it is interoperable with Ethereum.“The intent is not to undermine Ethereum, but to complement it by extending its reach and functionality in the stablecoin ecosystem,” Cho told DL News.Ethereum is the biggest DeFi chain, and with stablecoins a major part of the DeFi market, a large volume of stablecoin transactions happens on Ethereum. It even accounts for more than half of the stablecoin market, DefiLlama data shows. Tron, the next major blockchain for stablecoin settlements, accounts for barely half of Ethereum’s.Still, these seemingly separate stablecoin blockchains might converge to have some sort of interoperability among themselves, according to Thomas Cown, head of tokenisation at Galaxy Digital.“The rise of issuer-owned [or] operated blockchains could create competitive dynamics with the openness of fully public chains like Ethereum,” Cowan told DL News.Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please contact him at [email protected].Stablecoin issuers are building their own blockchains to snap up a bigger chunk of the massive transaction fees generated by the $277 billion market.“Launching a dedicated chain gives issuers more control over settlement and compliance, but it also opens the door to new revenue from fees and network activity,” Ben Reynolds, managing director of stablecoins at BitGo, a crypto custody company, told DL News.That would be great for those individual issuers, but it also poses a massive challenge for Ethereum and Tron, which have captured more than 80% of the stablecoin market.If issuers move off these blockchains, it could punch a hole in their fee revenue, especially as stablecoins are projected to account for 12% of global payments by 2030.And for Ethereum itself, the trend could dampen the expectation of its biggest proponents like Young Cho, CEO of StablecoinX, an Ethena treasury company, that it will become the financial substrate of the future. Tether, Circle and StripeTether is already working with startups like Plasma to create dedicated blockchains for its $167 billion USDT stablecoin. In August, Circle and fintech giant Stripe announced plans to create their own stablecoin blockchains.Tether and Circle are the two biggest stablecoin issuers, and they account for almost a quarter of the daily transaction fees across the entire DeFi sector, data from DefiLlama shows.To them, this is as much about controlling the infrastructure as it is about profit, according to Aishwary Gupta, global head of payments, exchanges and real-world assets at Polygon Labs.“It’s always said in the payment world, ‘he who controls the rails, controls everything,’’’ Gupta told DL News.Bad for Ethereum?Cho said these newer blockchains optimised for stablecoin-specific use cases like payments and yield could “fragment activity and reduce Ethereum’s centrality,” in the market.Ethena also has its purpose-built stablecoin blockchain called Converge but as an Ethereum layer 2 blockchain, Cho said it is interoperable with Ethereum.“The intent is not to undermine Ethereum, but to complement it by extending its reach and functionality in the stablecoin ecosystem,” Cho told DL News.Ethereum is the biggest DeFi chain, and with stablecoins a major part of the DeFi market, a large volume of stablecoin transactions happens on Ethereum. It even accounts for more than half of the stablecoin market, DefiLlama data shows. Tron, the next major blockchain for stablecoin settlements, accounts for barely half of Ethereum’s.Still, these seemingly separate stablecoin blockchains might converge to have some sort of interoperability among themselves, according to Thomas Cown, head of tokenisation at Galaxy Digital.“The rise of issuer-owned [or] operated blockchains could create competitive dynamics with the openness of fully public chains like Ethereum,” Cowan told DL News.Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please contact him at [email protected].