Liquidity, Network Effects, and Circle's Edge

Discussion of whether dollar stables are winner‑take‑all, liquidity advantages, and Circle's integrated product, compliance posture, and banking connectivity versus competitors.

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Welcome to The Chopping Block – where crypto insiders Haseeb Qureshi, Tom Schmidt, Tarun Chitra, and Robert Leshner chop it up about the latest in crypto. This week, we’re joined by Gordon Liao, Chief Economist at Circle, to dissect the Stablecoin Wars. From Circle’s Arc and Stripe + Paradigm’s Tempo, to Solana’s native stablecoin push and Hyperliquid’s deal, we unpack why everyone suddenly wants their own chain or branded stablecoin. Is this the future of crypto’s monetary layer — or just a fragmentation nightmare? We dig into FX use cases, PMF for stablecoins, collective bargaining power of ecosystems, and whether “stablecoin-as-a-service” is the next killer primitive or a liquidity trap.

Show highlights

🔹 Arc vs. Tempo — Circle’s Arc and Stripe + Paradigm’s Tempo: stablecoin-native L1s with permissioned validator sets, stablecoin gas, privacy, and FX engines.

🔹 Will FX Ever Matter? — Gordon: $9T/day FX market is broken; onchain FX could slash costs. Tarun + Haseeb question whether non-USD stables will ever get real traction.

🔹 Solana’s Stablecoin Gambit — Mert & Solana cabal eyeing a native stable to “stop giving Circle all the yield” — can a chain coordinate its way to PMF?

🔹 Collective Bargaining Meta — Hyperliquid deal proves apps/chains can extract economics from issuers; could ecosystems unionize to demand rev share?

🔹 Money Velocity Problem — BUSD worked (until it was banned); Huobi’s KUSD died for lack of velocity; most native stables never circulate beyond mints/redemptions.

🔹 Stablecoin-as-a-Service Gold Rush — Everyone launching a wrapped stable: M^0, Paxos, Agora. Does this dilute liquidity and trust — or unlock new UX?

🔹 Trust & Brand Moat — Users can’t be forced to convert; Circle’s scale, bank rails, and liquidity network remain hard to replicate.

🔹 Network Effects ≠ Monopoly — Stablecoin market evolved into USDC/Tether duopoly with niche players (Athena); future may see more vertical-specific winners.

🔹 Reg + Yield Outlook — GENIUS Act may ban interest payments; as rates fall, mint/redeem fees may replace reserve yield as the main revenue source.

🔹 Stablecoin Future — Will Solana, Tempo, Arc, and others fragment liquidity — or finally bring the next billion users on-chain?

Hosts
⭐️Haseeb Qureshi, Managing Partner at Dragonfly

⭐️Tarun Chitra, Managing Partner at Robot Ventures

⭐️Tom Schmidt, General Partner at Dragonfly

Guest

⭐️Gordon Liao, Chief Economist & Head of Research at Circle

Disclosures

Timestamps

00:00 Intro

00:52 Gordon Liao from Circle

01:48 Stablecoin Chains: Arc vs. Tempo