Protoplasts represent a homogeneous population of single cells without a cell wall, which offers novel understandings of various aspects of physiology, biochemistry, genetics, and developmental biology. The potential of protoplasts to perform cross-species hybridization, create novel traits, generate phenotypes through somaclonal variations, and serve as a synthetic biology platform for seaweed research is mostly unexplored. In response to the escalating demands for seaweeds across numerous industries, the main roadblock persists due to the lack of a sustainable supply of biomass as raw material. The seaweed-based circular bioeconomy now relies largely on new breakthroughs related to cultivation strategies. Developing elite germplasm with industrial superior traits, such as pest and disease resistance, and climate change resilience is the way forward for establishing a sustainable seaweed value chain. The establishment of a viable protoplast system can significantly contribute to propelling seaweed cultivation and bioeconomy realization. These single-cell systems can be implemented as seed stock and drivers for elite germplasm development. This review focuses on the status of protoplast research in seaweeds and its success, including the hybrids being created through protoplast fusion. Furthermore, this review deals with the prospective potential of the protoplast system for understanding various important aspects of seaweeds in the era of synthetic biology.