The new battlefield for stablecoins: a global race for compliance and a battle for industry distribution

This week, the competition in stablecoins emerged on two clear fronts: a race for compliance between countries and a battle for distribution rights within the industry. Globally, stablecoins are being incorporated into financial infrastructure: China, Japan, and South Korea are accelerating the integration of their national currencies with stablecoins, while US regulation is shifting more directly towards enabling payment systems. Federal Reserve Governor Waller singled out "stablecoins, smart contracts, and AI" as the three pillars of payment innovation, warning banks that resistance will lead to marginalization. Meanwhile, another Fed Governor, Bowman, called for reducing barriers to "reputational risk" and even suggested that central bankers personally handle the coins, signaling that stablecoins have become a strategic tool for the US dollar. At the industry level, the focus is shifting from issuance to distribution. Circle faces pressure from channel costs, while the practices of Ripple, Bullish, and MetaMask demonstrate both direct institutional connections and white-label distribution. Distribution networks are becoming crucial in the second half of the stablecoin market. Market Overview and Growth Highlights: The total stablecoin market capitalization reached $277.866 billion (approximately US$277.87 billion), a weekly increase of $2.771 billion (approximately US$2.78 billion). USDT maintained its dominant position, accounting for 60.19% of the market share; USDC ranked second with a market capitalization of $67.456 billion (approximately US$67.46 billion), accounting for 24.28%.

Blockchain network distribution

Top three stablecoin networks by market capitalization:

1. Ethereum: $144.578b (US$144.58 billion)

2. Tron: $82.416b (US$82.4 billion)

3. BSC: $11.836b (US$11.84 billion)

Top 3 networks with the fastest weekly growth:

1. Movement: +79.71% (USDA accounts for Ink: +27.52% (USDT accounts for 92.95%) Algorand: +14.28% (USDC accounts for 96.63%) Data from DefiLlama US-China Race: Stablecoins Have Become a Strategic Pivot of the Global Financial Order Stablecoins are evolving from a fringe product of the crypto market to a strategic hub of international finance. This week's simultaneous acceleration in China and the United States clearly reveals this trend: China's State Council is reviewing a new roadmap for the internationalization of the RMB, with stablecoins listed as a core component to offset the dollar's leading position in this area. Hong Kong has taken the lead in implementing regulatory regulations, Shanghai is building an international operations center for the digital RMB, and senior officials may promote the use of RMB stablecoins for cross-border settlements within the framework of the Shanghai Cooperation Organization. These moves stem from the realities of the RMB's declining share of SWIFT global payments to 2.88%, while the US dollar's share stands at 47.19%, and exporters' reliance on US dollar stablecoins is increasing. Against this backdrop, RMB stablecoins are seen as a complementary tool to enhance the competitiveness of cross-border payments. The exploration of major Asian economies like Japan and South Korea also demonstrates that stablecoins are gradually being incorporated into regional financial infrastructure design. The United States is also undergoing a profound regulatory transformation. Federal Reserve Board Governors Christopher Waller and Michelle Bowman have both stated their views. Waller, speaking at the Wyoming Blockchain Symposium, stated that stablecoins, smart contracts, and artificial intelligence are the three pillars of future payment innovation, and emphasized the strategic value of stablecoins in improving payment efficiency and strengthening the international status of the US dollar. He warned that banks that resist new technologies will be marginalized. Bowman further suggested reducing regulatory barriers due to reputational risk, and even allowing central bankers to hold crypto assets to gain practical experience. This aligns with the compliance path established by the GENIUS Act, demonstrating that the United States is reshaping its institutional advantages through regulatory liberalization. The minutes of a July FOMC meeting for the first time identified stablecoins as a systemic issue, recognizing their value in payments and Treasury demand while also cautioning against their potential to undermine bank liabilities and monetary policy transmission. This aligns closely with the banking industry's concerns about deposit outflows, indicating that stablecoins have evolved from an industry lobbying issue to a strategic risk consideration for central banks. Going forward, the Federal Reserve will likely recognize the efficiency and competitive value of stablecoins while strengthening transparency and risk monitoring to reestablish a new balance between financial innovation and systemic stability. Against this backdrop, the prospects for the scale-up of stablecoins will be revalued. Standard Chartered estimates that the global stablecoin market capitalization could reach $2 trillion by 2028. If RMB-denominated stablecoins can enter international clearing networks, they will become a key extension of RMB internationalization. It's foreseeable that China and the United States are shaping the future digital currency order through different paths: the US relies on legislation and regulatory friendliness to maintain its institutional advantage, while China is driving breakthroughs through policy-driven initiatives and regional pilot programs. This strategic convergence suggests that stablecoins will transcend the realm of cryptocurrencies and become a core variable in reshaping international financial governance and monetary flows. The Second Half of Stablecoins: The Battle for Distribution With the gradual implementation of compliance frameworks (the US GENIUS Act and the Hong Kong Stablecoin Ordinance), standardization of the issuance process is progressing, and the focus of industry competition is shifting to distribution. Distribution is not only the interface between issuers and users, but also the most expensive and influential link. Whether relying on exchanges, payment networks, or DeFi incentives, large-scale distribution incurs high channel costs. Circle is a prime example. Its user reach relies on channels like Coinbase, which in return provides it with a massive circulation volume, but also comes at a steep price. In Q2 2025, Circle earned approximately $625 million in interest from its USDC reserves, over half of which went to Coinbase. With the addition of distributors like Binance, this structural dependence will only intensify, putting Circle's net income margin under pressure. However, two cases this week demonstrated a different possibility. Ripple embedded RLUSD directly into Gemini's operating capital, and Bullish raised $1.15 billion in its IPO, with over 50% of the proceeds coming in the form of stablecoins. This type of "top-down" institutional distribution bypasses retail channels, placing stablecoins directly into corporate finance and capital markets. This approach is more efficient and creates long-term value propositions—a much closer approach to the deep integration of stablecoins into the mainstream financial system than relying solely on payment or transaction circulation. When distribution capabilities become the core of competition, platforms with control over users and channels will naturally expand into the issuance side. MetaMask's mUSD is a prime example. By partnering with Stripe's Bridge, the platform outsourced issuance, reserve management, and compliance, while focusing on branding and user outreach. Users can not only deposit, exchange, and cross-chain mUSD with mUSD, but also spend at merchants worldwide using the MetaMask Card. Wallets have evolved from traffic gateways to "branded issuers," with Bridge playing the behind-the-scenes role of "white label issuer." This model has the potential to reshape the stablecoin landscape, with a small number of professional companies with licenses and technology handling issuance and compliance, while more platforms with strong brand and user relationships outsource their efforts to provide "stablecoin as a service" (STaaS). The future market may shift from a monopoly of a few giants to a coexistence of more mid-sized stablecoins. True differentiation will come from distribution networks and brand value, not just the reserve assets themselves.

   Market Adoption

   Gemini and Ripple have reached a credit cooperation, and the part exceeding the initial amount will be settled in RLUSD stablecoin

   Key Points

   • Cryptocurrency exchange Gemini disclosed in its IPO prospectus that it had signed a $75 million credit line agreement with Ripple Labs, which can be expanded to $150 million after meeting certain conditions;

   • When the borrowing exceeds the initial $75 million, Gemini can make a borrowing request in the form of Ripple's US dollar stablecoin RLUSD, making RLUSD a settlement option for major US trading platforms;

   • The credit agreement was effective on July 10 Signed on August 15, 2019, the agreement is primarily used to finance credit card receivables. As of August 15, Gemini had not yet utilized the line of credit.

   Why It Matters

   • This agreement marks a critical shift in the expansion of stablecoins from a payment medium to a credit infrastructure. By partnering with a major exchange with an upcoming IPO, Ripple not only embeds RLUSD into Gemini's core business but also creates high-frequency, high-value use cases for its stablecoin, directly challenging the market dominance of USDT and USDC. Following Trump's signing of the GENIUS Act, the crypto industry has accelerated its mainstream adoption. This strategic collaboration between financial institutions demonstrates the unique advantages of stablecoins as a credit tool: immediacy, programmability, and globalization, injecting innovation into traditional finance. Despite Gemini's net loss of $282.5 million in the first half of the year, this partnership underscores the importance of stablecoins as critical infrastructure connecting traditional finance and the crypto ecosystem.

   Crypto exchange Bullish raised $1.15 billion through IPO, with over 50% of the funds settled in stablecoins

   Quick Overview

   • Crypto exchange Bullish completed its IPO on August 14, with over 50% of the financing completed in the form of stablecoins, raising a total of $1.15 billion;

   • The IPO used 8 different stablecoins for settlement, which were mainly minted on the Solana network and hosted by Coinbase, realizing multi-currency and multi-regional fund raising;

   • In this IPO, traditional investment bank Jefferies transformed into a "crypto delivery agent", coordinating the minting and delivery of stablecoins, and working with Circle and Paxos

   Why It Matters

   • This marks the emergence of stablecoins as a critical component of capital market infrastructure, directly challenging the traditional T+2 settlement model. The Bullish IPO integrates the strengths of high-performance public blockchains, compliant exchanges, and stablecoin issuers, demonstrating the collaborative capabilities of the crypto ecosystem. With legislation like the GENIUS Act providing a regulatory foundation for stablecoins, this innovative fundraising model signals a redefinition of the role of traditional financial intermediaries, potentially accelerating the migration of core capital market functions to on-chain.

   MetaMask expands its territory to integrate the TRON blockchain and accelerate its cross-chain development strategy

   Key Points at a Glance

   • MetaMask, the world's largest self-custodial wallet, announced a strategic partnership with TRON DAO, which will allow users to directly access and use the TRON ecosystem;

   • This is another cross-chain expansion of MetaMask after the integration of Solana and Sei. The team also announced earlier that it will add Bitcoin support in the third quarter of 2025;

   • As the main public chain for stablecoin payments, TRON processes nearly 9 million transactions per day, settles over US$22 billion in value, and is the blockchain network with the largest USDT transaction volume in the world.

   Why it’s important

   • This marks MetaMask’s transformation from an Ethereum native wallet to a true “Web3 portal,” enhancing user experience and market competitiveness by supporting both EVM and non-EVM chains. TRON’s widespread adoption in Asia, South America, Africa, and Europe presents global user growth opportunities for MetaMask. The collaboration between the two parties will strengthen blockchain ecosystem interoperability and promote the implementation of practical application scenarios. MetaMask currently has over 100 million annual active users and is considering issuing a native token. The integration of TRON is a key step in its cross-chain strategy and will further consolidate its leadership in the Web3 wallet market.

   Velera launches Digital Asset Lab, betting on stablecoins to become a new growth point for credit unions

   Quick Overview

   • Credit union service organization Velera launches Digital Asset Lab to help credit unions seize the initiative in the field of stablecoins and digital assets;

   • The lab will focus on developing joint ventures to solve problems such as distributed ledger infrastructure, blockchain network interoperability and core banking system integration;

   • The first platform partner is the digital asset banking network Metallicus. The two parties will jointly explore how to use versatile blockchain infrastructure to provide secure and compliant solutions for US credit unions.

   Why It Matters

   • Traditional financial institutions are rapidly entering the stablecoin space to avoid the same fate as startups in the fintech era, where they were overtaken by startups. As stablecoins and tokenized assets become mainstream, controlling their custody services is tantamount to holding the keys to the vault of a new global currency. By proactively developing custody services, banks and credit unions can establish toll booths for trillions of dollars in blockchain transactions while also controlling the design of new financial infrastructure. This move demonstrates that the financial industry's recognition of the potential of stablecoins is shifting from speculative assets to payment and store-of-value tools, which will accelerate the integration of stablecoins into the traditional financial system.

   Whop launches PSP payment aggregation platform, with fee reduced to 2.7%, supporting global bank and stablecoin settlement

   Key Points

   • Whop announced its independence from Stripe, building a payment orchestration system to connect to multiple PSPs (such as Adyen and Checkout.com), enabling intelligent transaction routing, improving authorization rates and reducing fees to 2.7% + 30 cents;

   • Whop's GMV has reached an annualized run rate of US$1.2 billion, serving 28,000 creators in more than 170 countries, supporting crypto settlements such as Bitcoin and stablecoins, and starting sales without tedious KYC;

   • Whop Having completed a total of $80 million in Series A and B funding, with a valuation of $800 million, investors include Peter Thiel and Insight Partners. The company is expanding from a digital product marketplace to a full-stack payment infrastructure provider.

   Why It Matters

   • Whop's independent payment system marks the acceleration of the trend toward "decoupling" payment infrastructure. By building a payment orchestration layer, Whop intelligently selects the optimal payment routing based on transaction type, country, and currency, eliminating reliance on a single provider. Cryptocurrency payment options and streamlined KYC processes provide underserved regions with a solution that bypasses traditional financial intermediaries, significantly lowering the barrier to entry for global merchants to participate in the digital economy.

   Regulatory compliance

   The United States establishes a unified stablecoin regulatory framework, and the GENIUS Act empowers the review committee to evaluate state rules

   Quick overview

   • The U.S. Stablecoin Certification Review Committee has begun evaluating whether the state stablecoin frameworks are "substantially similar" to the federal issuance system. The committee is led by the Secretary of the Treasury and its members include the Chairman of the Federal Reserve and the Chairman of the FDIC;

   • The committee must unanimously approve the state regulatory frameworks, which is a key step in simplifying state stablecoin regulation under the GENIUS Act;

   • Gavin Meyers, Financial Services Regulatory Partner, Pierson Ferdinand LLP The bill is expected to reduce the current regulatory chaos across states.

   Why It Matters

   • The United States is reviewing state stablecoin regulations at the federal level to establish unified national regulatory standards. This progress will provide a clear compliance path for stablecoin issuers, reduce regulatory costs for multi-state operations, and mitigate the risk of regulatory arbitrage. With the rapid growth of the global stablecoin market, this US regulatory coordination mechanism has exemplary significance for the development of a global stablecoin regulatory framework and will further promote the compliant application of stablecoins in areas such as payments and cross-border trade.

   Tether and Circle executives will meet with South Korean banking giants, and stablecoin development momentum is strong

   Quick Points

   • According to South Korean media reports, executives from stablecoin issuers Circle and Tether will meet with executives from major South Korean banks including Shinhan Financial Group CEO Kim Ok-dong and Hana Financial Group CEO Ham Young-joo this week;

   • The talks will discuss the potential for distribution and use of US dollar stablecoins in South Korea, as well as the possibility of issuing a local stablecoin backed by the Korean won;

   • Although South Korea's ruling and opposition parties hold different positions on stablecoin regulation, South Korean internet giant Kakao has registered a trademark for issuing a Korean won stablecoin, and the Bank of Korea is also considering linking deposit tokens to a public blockchain.

   Why it matters

   • This development signals that global stablecoin giants are actively expanding into the Asian market, particularly South Korea, a market that has historically had strict restrictions on foreign financial institutions. South Korea plans to introduce a stablecoin legal framework in October of this year, and the cooperation between large financial institutions and stablecoin issuers will accelerate the development of South Korea's stablecoin ecosystem. Rajiv Sawhney, head of international portfolio management at Wave Digital Assets International, said that joint ventures or cooperation between Circle or Tether and South Korean banks will help them maintain market share in the competition among local fintech companies issuing Korean won stablecoins. This trend reflects the global development of stablecoins as a cross-border payment tool and the increasing acceptance of stablecoin technology by traditional financial institutions.

   The U.S. Crypto Market Structure Act faces a key vote, and Congressman Scott says the result is pending

   Quick Overview of Key Points

   • Senate Banking Committee Chairman Tim Scott said that the upcoming Crypto Market Structure Act may receive less Democratic support than the previously passed Stablecoin GENIUS Act, with the most optimistic estimate being that only 12-18 Democrats will support it;

   • Scott bluntly stated that Senator Elizabeth Warren is the key force hindering Democratic members from supporting the bill. She warned that the bill will not only affect cryptocurrencies, but will also subvert the entire U.S. financial regulatory system;

   • Based on the current distribution of seats in the Senate, the bill needs at least 7 Democrats to join all 53 Republicans to pass, even if the CLARITY The bill faces the same challenges.

   Why It Matters

   • This crypto market structure bill has even more far-reaching implications than the already signed GENIUS Stablecoin Act, creating a legal space for the crypto industry by amending New Deal-era financial regulations. Warren's strong opposition has made the bill's prospects uncertain, claiming it would "provide a highway for traditional securities to escape SEC oversight," fundamentally overturning nearly a century of capital market regulatory framework. This legislative battle not only concerns the future of the crypto industry but also involves a fundamental debate about the US financial regulatory system, making it another key battleground for the Trump administration in promoting crypto-friendly policies.

   Robinhood enters the sports prediction market and cooperates with Kalshi to cover NFL and NCAA events

   Quick Points

   • Robinhood announced that it will cooperate with Kalshi through its derivatives department to launch a US professional and college football prediction market, allowing users to trade and bet on game results;

   • The new service will be launched before the 2026 NFL and NCAA seasons, covering all NFL regular season games and NCAA four major conference and independent college football games;

   • After suspending the Super Bowl prediction market due to the CFTC warning, Robinhood deliberately avoided directly mentioning the NFL or NCAA, and emphasized that the service is "not endorsed by any professional or collegiate athletic association."

   Why It Matters

   • This marks the transition of prediction markets from the crypto-native realm to mainstream financial services, reflecting the trend of "content financialization." The US sports betting market, with annual wagering exceeding $120 billion, has become a key market for fintech companies. The core legal issue currently lies in the conflict between federal regulation (by the CFTC) and state-level gambling laws. Platforms like Kalshi, holding CFTC licenses, can assert federal preemption to circumvent state restrictions. Although Nevada and New Jersey lost earlier lawsuits, Maryland's recent victory indicates that the legal dispute remains unresolved. This regulatory arbitrage will impact the development path of crypto prediction markets.

   Global banking organizations call for revisions to Basel crypto capital standards

   Key points at a glance

   • Several global financial industry associations jointly wrote to the Basel Committee on Banking Supervision (BCBS), requesting a reconsideration of the crypto asset risk exposure standard (SCO60) that came into effect in January 2026;

   • The banking organization believes that the current standard’s capital treatment of crypto assets is overly conservative and punitive, inconsistent with the actual risks, and makes it economically unfeasible for banks to participate in the crypto market;

   • The financial industry emphasizes that its direct participation can provide consumer protection and risk management, and attached a report emphasizing the “transformative potential” of distributed ledger technology in the capital market. Why It Matters: With the Trump administration pushing for crypto-friendly legislation and global banks actively developing services such as custody, trading, and stablecoin issuance, crypto assets have become an essential part of traditional finance. The banking industry's proactive lobbying for rule changes demonstrates that it is no longer passively accepting regulation, but is actively seeking to participate in the crypto market in a profitable environment. The BCBS standards, developed during the turbulent market of 2022, are not aligned with current industry developments. This regulatory battle will profoundly impact the integration of crypto and traditional finance, highlighting the ongoing struggle between regulation, risk, and commercial interests.

   Wyoming launches the first state-backed multi-chain stablecoin FRNT

   Quick Overview

   • The Wyoming Stablecoin Committee officially released the first official state-backed stablecoin, Frontier Stable Token (FRNT), becoming the first state in the United States to issue a blockchain-based token pegged to a fiat currency;

   • FRNT will be issued simultaneously on seven major blockchains: Arbitrum, Avalanche, Base, Ethereum, Optimism, Polygon and Solana, maintaining interoperability through LayerZero;

   • The stablecoin is overcollateralized by cash and short-term U.S. Treasury bonds, holds at least 102% reserves to ensure stability, and will initially be issued through Kraken (Solana) and Available for purchase through Rain's Visa-integrated card platform (Avalanche).

   Why It Matters

   • Wyoming has long been a leader in crypto regulation, and this stablecoin issuance, coming hot on the heels of President Trump signing the federal stablecoin law, further solidifies the state's leadership in digital financial innovation. With the total supply of US dollar stablecoins already reaching $265 billion, a state-issued, regulation-friendly stablecoin will expand options for retail and corporate users while attracting more blockchain-related activity to the regional economy. This also provides a template for other state and local governments to issue stablecoins, potentially sparking broader government digital currency experiments.

   The U.S. Treasury Department publicly solicits comments on anti-money laundering measures for digital assets

   Quick Overview

   • The U.S. Treasury Department issued a notice on Monday to solicit public comments on "Innovative Methods for Detecting Illegal Activities Involving Digital Assets" to implement the requirements of the GENIUS Stablecoin Act signed by President Trump last month;

   • The Treasury Department requires all parties to provide suggestions on the application of API interfaces, artificial intelligence, digital identity verification and blockchain technology in the field of anti-money laundering. The deadline for soliciting comments is October 17;

   • Treasury Secretary Scott Bessent said that stablecoins will expand access to US dollars for billions of people around the world and increase demand for U.S. Treasury bonds, calling it a "win-win situation for users, issuers and the U.S. Treasury." With the GENIUS Act establishing a federal regulatory framework for stablecoins, regulators are turning to addressing anti-money laundering compliance challenges. Banking associations are concerned that the bill's restrictions on stablecoin interest payments could be circumvented by exchanges and brokers, leading to a massive influx of deposits into the stablecoin market. This consultation process will influence the development of future stablecoin regulatory rules. The Treasury Department's submission of its findings to Congress may prompt a new round of rulemaking, profoundly impacting the compliance requirements and development direction of the stablecoin industry.

   Tether appoints Bo Hines, former executive director of the White House Crypto Council, as strategic advisor

   Quick Points

   • Tether announced the appointment of Bo Hines, former executive director of the White House Crypto Council under the Trump administration, as digital assets and US strategic advisor, effective immediately;

   • Bo Hines will lead Tether's strategic planning for entering the US market, build relationships with policymakers and industry stakeholders, and strengthen Tether's investment commitment in the United States;

   • As executive director of the White House Crypto Council, Hines led an interagency working group to develop a stablecoin regulatory framework and promote the safe integration of blockchain technology into the US financial system.

   Why It Matters

   • This appointment marks the official launch of the US market strategy by the world's largest stablecoin issuer and reflects the increasingly common "revolving door" phenomenon between the crypto industry and political elites. With the Trump administration's policy stance supporting crypto innovation, Tether's recruitment of former White House officials may help it gain a more favorable regulatory environment in the United States. Tether stated that it has invested nearly $5 billion in the US ecosystem. This personnel appointment may indicate that it will increase its layout in the US infrastructure field, further changing the influence of stablecoins in the global payment system.

   The Federal Reserve announced the termination of the Emerging Activities Supervision Program and returned to the regular regulatory process

   Quick Overview of Key Points

   • The Federal Reserve previously established the Novel Activities Supervision Program to focus on supervising banks in emerging business areas such as crypto assets, distributed ledger technology (DLT) and complex technological cooperation with non-banks;

   • The program covers four key areas: technology-driven cooperation with non-banks, crypto asset-related activities, DLT projects with potential systemic impact, and centralized banking services for crypto companies and fintech companies;

   • The Federal Reserve has now decided to terminate the special program and will continue to supervise banks' emerging business activities through regular regulatory processes, emphasizing that it will not prohibit or hinder banks from providing services due to the type of business.

   Why It Matters

   • This move marks a significant shift in the Federal Reserve's regulatory approach to crypto and fintech, returning it from specialized oversight to the mainstream regulatory system, potentially reflecting regulators' belief that these businesses have reached maturity. This move will simplify the compliance burden for banks participating in crypto and DLT innovations, hopefully encouraging more traditional financial institutions to explore digital asset services, promoting financial innovation and inclusion while maintaining appropriate oversight of risks. This policy change may signal that the US regulatory environment is moving in a more open, yet still cautious, direction.

   CMB International Securities officially launched virtual asset trading services, providing transactions in Bitcoin, Ethereum, etc.

   Key Points

   • On August 18, CMB International Securities announced the official launch of virtual asset trading services. Its mobile APP has launched the virtual asset trading function, providing qualified investors with round-the-clock trading services;

   • Qualified investors can directly trade three digital assets, Bitcoin (BTC), Ethereum (ETH) and USDT, through CMB International Securities' virtual asset accounts;

   • The company is the first Chinese bank-affiliated securities firm in Hong Kong to obtain relevant licenses for virtual asset trading services. In the future, it will gradually expand the scope and functions of transactions within the compliance framework. This marks a milestone for Chinese financial institutions to formally enter the crypto asset sector and reflects the growing maturity of Hong Kong's virtual asset regulatory framework. As the first licensed Chinese bank-affiliated securities firm, CMB International's participation will provide institutional investors with more standardized and secure crypto asset trading channels, potentially attracting more traditional financial capital into the digital asset market while strengthening Hong Kong's position as Asia's crypto financial hub.

   South Korea’s financial regulator will submit a stablecoin regulatory bill in October

   Quick Overview

   • According to South Korean media MoneyToday, the Financial Services Commission (FSC) of South Korea plans to submit a stablecoin regulatory bill to the National Assembly in October. The bill will be included in the second digital asset legal framework that South Korea is developing;

   • The bill will establish regulations such as stablecoin issuance requirements, collateral management and internal risk control systems, in line with the new President Lee Jae-myung’s commitment to establish a local currency-pegged stablecoin market;

   • South Korea’s four major banks (Kookmin Bank, Woori Bank, Shinhan Bank and Hana Bank) plan to meet with Heath Tarbert, president of USDC issuer Circle, next week to discuss stablecoin-related matters.

   Why It Matters

   • This move signals that major Asian economies are accelerating the development of stablecoin regulatory frameworks, forming a global stablecoin regulatory network with the United States, Japan, and other countries. South Korea's promotion of its own stablecoin reflects strategic considerations for digital financial sovereignty and aims to address Trump's challenge to strengthening the dollar's global dominance through stablecoins. As stablecoin regulation in Asian markets becomes increasingly clear, it will provide a clearer legal environment for cross-border payments and financial innovation, while also bringing greater certainty to institutional investor participation. Japan Approves First Yen Stablecoin, JPYC, with Plans to Issue $7 Billion USD Over Three Years Key Points Japan's Financial Services Agency (FSA) has approved the issuance of the first yen stablecoin by fintech company JPYC as early as this fall. JPYC will be available for sale within weeks of registering as a money transmitter this month. JPYC will be fully backed by highly liquid assets such as deposits and government bonds, maintaining a 1:1 peg to the yen. The plan is to issue 1 trillion yen (approximately $6.81 billion USD) over three years, attracting interest from hedge funds, wealth managers, and others. Its applications include carry trades, cross-border remittances, and DeFi.

   Why It Matters

   • Japanese law defines stablecoins as "currency-denominated assets," distinguishing them from traditional cryptocurrencies such as Bitcoin and providing a clear legal basis for regulation and issuance. With Citi predicting the stablecoin market will grow to $3.7 trillion by 2030, the launch of the Japanese Yen stablecoin sets a precedent for non-US dollar currencies (JPYC) to enter the global stablecoin market, potentially reshaping the cross-border payment landscape.

   Coinbase, DCG and other crypto giants jointly established the "American Innovation Project" educational non-profit organization

   Quick Overview

   • Coinbase, DCG, Kraken, Paradigm and other crypto industry giants jointly established the "American Innovation Project" (AIP), which operates as a 501(c)(3) non-profit organization and enjoys tax-exempt status;

   • AIP is led by Julie Stitzel, senior vice president of policy at DCG, and will directly contact members of Congress and their aides to provide education on cryptocurrencies and decentralized technologies, but the law stipulates that they cannot "influence legislation as a primary part of their activities";

   • Board members include Kristin Smith, President of the Solana Policy Institute, Allie Page, COO of the Blockchain Association and Coinbase Policy Strategist Nick Carr.

   Why It Matters

   • This reflects a strategic shift in the crypto industry to adopt a more diverse approach to influencing policymaking. By choosing a 501(c)(3) non-profit model over traditional lobbying organizations, these companies can maintain political influence while circumventing certain legal restrictions and tax burdens. The organization's establishment coincides with the increasingly complex crypto regulatory environment and shows that industry leaders are seeking to strike a balance between education and lobbying to create favorable conditions for shaping the future regulatory environment.

   Capital Layout

   Loop Crypto Completes US$6 Million in Financing, Stablecoin Payment Platform Transaction Volume Soars by 344%

   Key Points

   • Loop Crypto Completes a New Round of Strategic Financing, Led by Fabric Ventures and VanEck, with Helius and Plug and Play Joining for the First Time, and Existing Investors such as a16z Crypto Continue to Support, with a Total Financing Amount Exceeding US$6 Million;

   • Data Shows that the Loop Platform's Q2 2025 Transaction Volume Increased by 344% Year-on-Year, with Stablecoin Transactions Accounting for 98% of All Transactions and 94% of Total Payments, Helping Merchants Cover 120 Customers in multiple countries;

   • The platform supports traditional payment functions such as authorized and saved payment methods, recurring payments, and usage-based billing, while also offering advantages such as minute-by-minute payment collection, integration within days, and instant fiat/stablecoin settlement.

   Why It Matters

   • Loop Crypto's fundraising and explosive growth demonstrate that stablecoins are becoming a new global payment infrastructure. The platform not only serves merchants directly but also empowers billing platforms like OpenPay through APIs, creating a network effect in the payment ecosystem. Data shows that merchants accepting cryptocurrency payments sell in twice as many countries as those accepting only fiat, demonstrating that stablecoins are addressing global business pain points such as high foreign exchange fees, integration with multiple payment processors, and long settlement times. The continued investment from top investment institutions reflects the market's strong expectations for the growth of stablecoin payments and indicates that crypto payment infrastructure is rapidly integrating into mainstream commerce.

   PayPal and Coinbase Ventures jointly invest in Mesh, with total financing exceeding $130 million

   Quick Points

   • Encrypted payment infrastructure company Mesh has received a new round of investment from PayPal Ventures, Coinbase Ventures and other institutions, bringing its total financing to more than $130 million;

   • This round of financing comes only 5 months after Mesh's $82 million Series B financing led by Paradigm in March this year. The specific amount was not disclosed but it was at least $10 million, and some of the funds were settled in PYUSD stablecoin;

   • Mesh's "SmartFunding The "Orchestration Engine" solves the asset mismatch problem in crypto payments, allowing users to pay with more than 100 cryptocurrencies, while merchants settle instantly in stablecoins or fiat currencies.

   Why it's important

   • Traditional payment giants and crypto companies are accelerating the integration of payment infrastructure. As the technology provider of PayPal's "Pay with Crypto" service, Mesh has been integrated with major exchanges such as Coinbase and Binance, covering hundreds of millions of users. The continued investment from many well-known investment institutions shows that the market is optimistic about the prospects for the integration of crypto payments and traditional payment systems. Mesh is expected to play a role in building a global crypto payment network similar to that of Visa and Mastercard in the card payment field.

   Circle acquires consensus engine Malachite to support the upcoming Arc stablecoin blockchain

   Quick Points

   • USDC stablecoin issuer Circle has acquired Malachite, a consensus engine developed by Informal Systems, to support its newly announced Arc blockchain focused on stablecoin finance;

   • The acquisition includes Malachite's underlying technology and intellectual property, and nine employees of Informal Systems will join the Circle team, but the two parties did not disclose the specific transaction amount;

   • Malachite is built on the Tendermint consensus algorithm, designed for the flexibility and correctness of decentralized systems, and will maintain the Apache 2.0 open source license.

   Why It Matters

   • This acquisition marks a substantial step for Circle, the issuer of USDC (USDC), with a total market capitalization of $65 billion, toward building its own blockchain infrastructure. It reflects the stablecoin issuer's strategic shift from relying on third-party platforms to building its own dedicated ecosystem. With the stablecoin market expected to grow to a trillion dollars and reshape cross-border payments, Circle will gain greater autonomy, lower transaction costs, and improved scalability through the Arc blockchain. This move has the potential to accelerate the mainstream adoption of stablecoins in the global financial system and promote the further integration of traditional payments and blockchain technology.

   New Product Express

   MetaMask joins the stablecoin competition and will issue mUSD stablecoin

   Key Points

   • MetaMask confirmed that it will launch its own US dollar stablecoin mUSD this year, initially on Ethereum and Linea, a second-layer network developed by Consensys;

   • mUSD is issued by Bridge, a US licensed issuer under Stripe, based on the blockchain infrastructure of the M0 platform. Users can use MetaMask Card to spend at Mastercard merchants around the world;

   • Bridge and M0 The collaboration provides customized stablecoin solutions for businesses, reducing development time from "complex integrations of over a year" to "weeks," with MetaMask being the first example.

   Why It Matters

   • This move signals the stablecoin market's transition from a simple trading tool to a core component of the application ecosystem. With the regulatory clarity provided by the GENIUS Act, application-specific stablecoins are becoming a new trend. MetaMask, a mainstream crypto wallet with tens of millions of users, entering the fray will significantly expand the penetration of stablecoins in payments and everyday use cases. Through the Bridge and M0 partnership model, more applications can launch their own stablecoins without dealing with complex compliance and technical issues. This will accelerate the diversification and popularization of the stablecoin ecosystem and promote the global adoption of the digital dollar.

   Circle releases cross-chain USDC settlement service Gateway, supporting 7 major blockchains

   Key Points

   • Circle officially launched Gateway cross-chain service, enabling instant access to unified USDC balances across multiple chains in <500 milliseconds. Currently supported are Arbitrum, Avalanche, Base, Ethereum, Optimism, Polygon and Unichain;

   • Gateway can serve multi-chain users without idle funds, exchanges can realize USDC withdrawals without bridging infrastructure, and custodians can provide customers with seamless cross-chain access;

   • Multiple partners have already connected, including Dfns, Enclave, etc., and will be expanded to ARC in the future Circle Gateway, a unified cross-chain liquidity solution, breaks through the latency and capital efficiency limitations of traditional bridges, providing a more streamlined USDC experience for payment providers, exchanges, and wallets. Through a unified balance system, users can transfer assets across chains in milliseconds, which is expected to significantly reduce cross-chain costs, improve capital efficiency, and promote USDC's dominance in the multi-chain ecosystem, providing more seamless infrastructure support for DeFi and payment applications.

   Reown and Payy collaborate to create seamless on-chain privacy banking services and simplify the crypto payment experience

   Key Points at a Glance

   • "Financial Internet Connection Layer" Reown has partnered with on-chain privacy bank Payy to jointly solve the technical friction problems of crypto payments;

   • Reown will provide Payy with multi-chain support, smart wallet connection and automatic token exchange functions, allowing users to choose their blockchain preferences and pay directly with USDC;

   • Payy was developed by Polybase Labs, founded by former Apple iOS engineer Sid Gandhi, integrating stablecoins, privacy chains and fiat currency deposit and withdrawal channels, and has previously launched a privacy-protected crypto Visa card. This collaboration demonstrates the growing specialization of crypto payment infrastructure. Reown focuses on providing payment orchestration services, while Payy specializes in privacy-focused on-chain banking. This modular collaboration accelerates industry innovation, bringing the stablecoin payment experience closer to the convenience of traditional finance while retaining the privacy and security advantages of blockchain.

   Visa and Wirex enable real-time settlement of EURC euro stablecoin

   Quick Points

   • Visa and crypto payment company Wirex have achieved real-time settlement in Europe using the EURC euro stablecoin issued by Circle. This is the first time that EURC has been used in a production environment.

   • The deployment follows Visa’s integration of EURC into its settlement platform last month, marking a breakthrough in the commercialization of non-US dollar stablecoins in large-scale payment networks.

   • This move brings more efficient cross-border transaction processing capabilities to the European payments market, reduces settlement time and costs, and provides merchants with more convenient euro-denominated payment options.

   Why It Matters

   • This deployment marks substantial progress in the global trend toward de-dollarization in the payments sector. With the EURC stablecoin gaining recognition from payment giants like Visa, euro-denominated stablecoins are expected to gain wider adoption in Europe and globally. This move not only enhances the euro's competitiveness in digital payments but also provides European businesses with a localized option alongside the US dollar-denominated stablecoin, potentially promoting the development and application of more regional stablecoins.

   SoFi and Lightspark plan to launch international remittance service based on Bitcoin Lightning Network

   Quick Overview

   • US digital bank SoFi announced a partnership with Bitcoin Lightning Network service provider Lightspark, and plans to launch a blockchain-based cross-border remittance service next year, becoming one of the first US banks to provide such services;

   • The service will be launched first in Mexico and gradually expanded to other countries. Users can make international transfers directly through the SoFi application with lower fees and faster speeds;

   • During the remittance process, US dollars will be converted into Bitcoin, transmitted through the optimal path of the Lightning Network, and then instantly converted into local currency and deposited into the recipient's bank account, similar to Stripe's early payment architecture.

   Why It Matters

   • This marks a renewed embrace of crypto by traditional financial institutions, particularly the recognition of the Bitcoin Lightning Network's value in solving real-world payment problems. With mainstream financial institutions like Bank of America and JPMorgan Chase exploring the application of blockchain technology in money transfers, SoFi's move could lead a new wave of institutional adoption. Furthermore, this marks SoFi's strategic reentry into the crypto space, following its initial launch of crypto trading services in 2019 and subsequent scaling back due to regulatory pressure related to the FTX collapse. This demonstrates renewed institutional confidence in the potential application of crypto assets and blockchain technology in payment scenarios.

   Macro Trends

   Large Global Banks Deploy Stablecoin Infrastructure, Targeting the Crypto Asset Custody Market

   Key Points

   • Financial institutions such as Franklin Templeton, Bank of New York Mellon, Goldman Sachs, Citigroup, Deutsche Bank and JPMorgan Chase are actively building crypto asset custody infrastructure, viewing it as a strategic entry point into the digital asset field;

   • Wyoming’s first US state government stablecoin has chosen Franklin Consultants to manage its reserve funds, demonstrating the important role of traditional financial institutions in the stablecoin custody field;

   • Goldman Sachs predicts that the stablecoin market will reach trillions of dollars

     Quick Overview of Key Points

     • Goldman Sachs' latest research report points out that the payment field is the most obvious market opportunity for stablecoin expansion, and the future market size is expected to reach trillions of dollars;

     • Goldman Sachs expects the USDC issued by Circle to grow by US$77 billion by the end of 2027, benefiting from the recently passed stablecoin legislation and the expansion of the crypto ecosystem;

     • U.S. Treasury Secretary Scott Bessent once said that the market size of dollar-backed stablecoins could reach US$2 trillion or more, which will expand the global use of the US dollar. Why It Matters Goldman Sachs' prediction further validates the importance of stablecoins as an emerging financial infrastructure. Currently, the global stablecoin market is worth $271 billion, with USDT maintaining its dominant position. However, as the US regulatory framework becomes clearer, Tether has stated it is developing a US market strategy. Meanwhile, major US banks such as Bank of America also plan to issue their own dollar-denominated stablecoins. This indicates that the stablecoin ecosystem is entering a phase of institutional competition, expanding from primarily serving crypto transactions to broader payment applications, becoming a core battleground for digital currency competition.

     Stablecoins face stricter KYC challenges in emerging markets

     Quick Overview of Key Points

     • Stablecoins are transforming from trading tools to daily payment tools in emerging markets. Nigeria has completed approximately US$3 billion in small-value transfers through stablecoins in the first quarter of 2024;

     • Western Union is considering launching its own stablecoin to reduce cross-border transfer costs, and Canadian payment processor Nuvei has begun processing international payments through stablecoin channels;

     • Stablecoins have obvious advantages in the global US$669 billion remittance market: 24/7 availability, minute-by-minute settlement, and resistance to local currency fluctuations, but the Financial Action Task Force (FATF) warns that inconsistent compliance may lead to illicit capital flows.

     Why It Matters

     • Stablecoins are becoming a payment infrastructure in emerging markets, particularly in countries with high inflation and for cross-border payments. As mainstream financial institutions begin to adopt stablecoin technology, compliance requirements will become a key challenge for industry expansion. Regulators require stablecoin providers to adhere to the same know-your-customer (KYC) standards, sanctions screening, and the "travel rule" as traditional banks. This is both a sign of industry maturity and a decisive factor in whether stablecoins can become mainstream in global payments. Regulatory differences between countries and the risk of sanctions avoidance will test the compliance capabilities of the stablecoin ecosystem.