Stripe is facing pushback in its bid to issue Hyperliquid’s planned USDH stablecoin, as a coalition of crypto firms, including MoonPay, Agora and Rain lined up competing proposals alongside Paxos and Frax.
In a Friday Discord message, the Hyperliquid team announced it wants to create a “Hyperliquid-first, Hyperliquid-aligned, and compliant USD stablecoin” with the USDH ticker. This was followed by the Native Markets teams submitting the first proposal, which would see Stripe’s stablecoin payment processor, Bridge, issue USDH.
Native Market’s proposal promised to contribute “a meaningful share of its reserve proceeds” to Hyperliquid’s Assistance Fund treasury, mint directly on the ecosystem and be regulatory compliant. Still, Agora co-founder and CEO Nick Van Eck submitted an alternative proposal, arguing against the Stripe-linked alternative:
“If Hyperliquid relinquishes its canonical stablecoin to Stripe, a vertically integrated issuer with clear conflicts, what are we all even doing?” asked Van Eck. He added that Agora “strongly urges caution against the utilization of Stripe (Bridge) as an issuer.”
Related: China cracks down on stablecoin promotions, research and seminars
Van Eck claimed that Bridge has insufficient financial infrastructure and product experience and also pointed to Stripe’s announcement of plans for its own Tempo blockchain as a potential conflict of interest. “Stripe is committed to driving activity to this ecosystem,” he said, asking:
“How long until Stripe and Bridge start pushing users and perps from other financial applications directly to Tempo instead of Hyperliquid?”
On Sunday, MoonPay president and board member Keyth Grossman announced that the payment processor is joining Agora’s proposal to issue USDH for Hyperliquid and “provide the regulated payment rails to power this initiative.” Just like Van Eck, he harshly criticized the Native Markets proposal. “USDH deserves scale, credibility and alignment — not BS capture. That is this coalition, not Stripe,” he said.
Rob Hadick, general partner at venture capital firm Dragonfly.xyz, shared his enthusiasm. In a Sunday X post, he wrote that the addition of MoonPay to the coalition made this the “unarguable best” proposal for USDH issuance.
Aside from the Stripe-linked proposal, the coalition must compete with stablecoin issuer Paxos. On Sunday, the firm also submitted a proposal to launch USDH, promising to direct a percentage of the interest earned from USDH reserves to buy back Hyperliquid’s native token, HYPE, and redistribute it to users, validators and partner protocols.
Another competing proposal is the one by the Frax blockchain, which promises to give all earnings of USDH — backed by its frxUSD — back to the community. “We’re proposing something no one else will match: give everything back to the community,” the proposal stated.
Related: Animoca and Standard Chartered form stablecoin venture in Hong Kong
The competition underscores growing activity in the stablecoin sector as regulators and financial institutions step in. HSBC and ICBC are reportedly preparing to apply for stablecoin licenses in Hong Kong, where a new framework took effect Aug. 1.
Adoption is also moving fast, with Kazakhstan’s financial regulators recently allowing license and supervision fees to be paid in US dollar-pegged stablecoins.
The US state of Wyoming also plans to launch the Frontier Stable Token (FRNT), a stablecoin authorized by the local government. 1Money, a company building a layer-1 blockchain for stablecoin payments, recently announced that it has secured as many as 34 US money transmitter licenses, alongside a Bermuda license.
Earlier this month, European Central Bank President Christine Lagarde called for EU lawmakers to address gaps in stablecoin regulation. “[The US government’s policies] could potentially result not just in further losses of fees and data, but also in euro deposits being moved to the United States,” said ECB executive board member Piero Cipollone in April.
