Why did PayPal go all in on the right to issue a stablecoin?

The central event of this week was undoubtedly the bidding war within the Hyperliquid community over the issuance of its native stablecoin. This battle, centered around the interest earned on $5.5 billion in reserves, attracted not only DeFi natives like Frax and Ethena, but also fintech giants like Stripe and PayPal, propelling the stablecoin race far beyond the crypto world. This marked the first large-scale attempt by a decentralized protocol to challenge the fintech profit model. Bidders chose to cede their float to the community, vying for the scarce "distribution access." This competition, therefore, transcended token issuance and marked a critical turning point in the stablecoin journey from issuance to distribution. As the barrier to entry for stablecoin issuance continues to decline, it is foreseeable that more communities and brands will issue their own stablecoins, returning the profits to users and the ecosystem. "Monetary sovereignty" is moving from concept to reality, gradually becoming a new consensus within the industry. Market Overview and Growth Highlights: The total stablecoin market capitalization reached $287.876 billion (approximately US$287.876 billion), a weekly decrease of $353.58 million (approximately US$354 million). USDT maintained its dominant position, accounting for 58.88% of the market share; USDC ranked second with a market capitalization of $72.012 billion (approximately US$72.012 billion), accounting for 25.02%.

Blockchain Network Distribution

Top 3 Stablecoin Market Cap:

1. Ethereum: $154.314b (US$154.31 billion)

2. Tron: $79.239b (US$79.24 billion)

3. Solana: $12.465b (US$12.47 billion)

Top 3 Fastest Growing Networks in Week 1:

1. M By M^0 (M) : +20.77%

2. PayPal USD (PYUSD): +14.78%

3. Ethena USDtb (USDTB): +12.94%

Data from DefiLlama

Fighting for $5.5 billion in reserve interest: The battle for Hyperliquid's stablecoin issuance rights

In the Hyperliquid community, a bidding war over $5.5 billion in stablecoin reserves has entered a critical stage. On the surface, this is just the launch of a native stablecoin called USDH, but in essence it is a redistribution of reserve interest. In the past, hundreds of millions of dollars in annual float income flowed primarily to issuers and distributors like Circle and Coinbase. (Hyperliquid holds 5.5 billion USDC, representing 7.6% of the total USDC supply. Circle has earned over $120 million in interest from this, and currently receives approximately $620,000 daily.) The Hyperliquid community, however, hopes to return this float income to the community by issuing its own native stablecoin, USDH. Consequently, bidders have offered generous terms, with Frax, Ethena, Agora, and Sky offering to transfer 95% or even 100% of the interest back to the community. This means that stablecoin issuance is no longer a profit point per se, but rather a ticket to the distribution layer. Hyperliquid's user network and liquidity position are sufficient to render the existing "issuer-only" model, the core logic behind USDT's once-monopolistic profits, ineffective. The bidders' proposals varied. DeFi companies like Frax and Ethena favored a "nesting doll" model, leveraging Hyperliquid's USDC reserves to mint an intermediate layer and then pegging USDH to it, thereby expanding their own demand pool and returning benefits to the community. Native Markets, as the leader of the Hyperliquid community, joined the bidding, collaborating with Stripe-Bridge to promote USDH as an API-level asset with fiat deposits and withdrawals and multi-chain payment capabilities. This initiative is expected to expand by embedding itself into the long-tail of real-world merchants. In contrast, Paxos partnered with PayPal, leveraging its vast user and merchant network to drive rapid stablecoin adoption through a top-down approach. The former represents a gradual, developer-driven approach to expansion, while the latter emphasizes immediate reach and efficient coverage. Both represent two distinct approaches to stablecoin distribution. Data from prediction market Polymarket indicates that Native Markets has over a 90% chance of winning. Regardless of the final outcome, Circle's model of relying on reserve interest has been shaken. With the proliferation of "issuance as a service" (STaaS), the competitive advantage of the stablecoin market will shift from reserve size to distribution channels. Hyperliquid's bid may be the first example of this shift, but it won't be the last. This means that in the future, we will see more communities and brands choose to issue their own stablecoins, returning the profits to the community, ecosystem, and users. "Monetary sovereignty" will gradually become a new industry consensus. Stripe's Most Potential Profit Engine: Monetization of Distribution Rights. Last week, Stripe officially announced the launch of its proprietary Tempo payment chain, completing the full-stack stablecoin payment system: Privy provides a frictionless wallet, Bridge handles issuance and compliant clearing, and Tempo handles final settlement. Individually, none of these three projects possess unique advantages, as numerous similar products already exist on the market. But when they are API-based and uniformly orchestrated within the Stripe network, stablecoins become more than just "another payment method"; they become core components of the payment dispatch layer. This allows stablecoins' strengths in cross-border, micropayment, and programmable payments to be optimally combined with traditional channels, unlocking new business models and capturing more diverse value. This means that for merchants, the frontend remains virtually unchanged. In the backend, Stripe can now route the optimal path between ACH, card schemes, and Tempo+Bridge in real time, making stablecoins the invisible infrastructure of the payment network. However, Stripe's greatest competitive advantage lies not in the blockchain itself, but in the complete commoditization of infrastructure components like compliance, issuance, and clearing, thereby shifting the focus of competition back to its core strengths: product and distribution. Leveraging its network of millions of merchants, Stripe can integrate white-label issuance with the merchant ecosystem through Bridge, bringing stablecoins directly into mainstream commerce. The value of this "distribution channel" far exceeds the returns on float, as it creates real, non-speculative use cases for stablecoins. Going further, Stripe's API could even allow merchants to become direct issuers, embedding stablecoins into loyalty points or supply chain settlements. At that point, stablecoin penetration will no longer rely on speculative momentum, but will naturally extend into the business network through the distribution layer. When distribution becomes the most scarce resource, Stripe might even charge a "toll" to stablecoin giants like Circle. It can be said that the true strategic advantage of stablecoins lies not in issuance but in control of the distribution gateway. If distribution capabilities were merely a plus in Hyperliquid's proposal bidding, then in Stripe's business vision, monetizing distribution capabilities could become a future profit engine. Beyond clearing fees, API usage fees, and reserve interest rate spreads, the true moat lies in control of merchant gateways. Once network effects begin to emerge, controlling distribution will essentially become control of the stablecoin's most valuable cash flow, and distribution rights themselves will become a new monetization layer.

New Product Express

Minnesota Credit Union Launches First U.S. Credit Union Stablecoin

Quick Overview of Key Points

• St. Cloud Financial Credit Union plans to launch Cloud Dollar (CLDUSD) by the end of 2025, claiming that this is the first stablecoin issued by a credit union in the United States;

• The stablecoin is jointly developed by blockchain company Metallicus and financial technology provider DaLandCUSO. It will be directly integrated with the credit union banking system to provide instant and low-cost transactions;

• CLDUSD will be issued based on the Metal blockchain and connected to the existing credit union infrastructure through Coin2Core software. It aims to retain deposits while providing a regulated method of moving funds.

Why it’s important

• Driven by the GENIUS Act, small financial institutions are using blockchain technology to compete with fintech companies, bringing traditional financial institution participants to the $270 billion stablecoin market.

Coinbase launches "x402 Bazaar", a crypto micropayment ecosystem for AI agents

Quick Overview

• Coinbase engineers launched "x402 Bazaar", a discovery layer for AI agents, known as "Google for AI agents"; the platform is built on the x402 open source payment protocol released earlier this year, which supports instant stablecoin payments on any website;

• The first projects to go online include Prixe (a stock price API that allows AI agents to create the latest financial reports) and various image and video generation endpoints; Erik Reppel, head of engineering at Coinbase's developer platform, calls it a "pay-per-crawl" model that solves the payment problem when AI agents access data or content;

MegaETH launches USDm stablecoin and cooperates with Ethena to use reserve income to subsidize sorter fees

Key Points

• Ethereum scaling solution MegaETH and DeFi protocol Ethena have partnered to launch the USDm stablecoin, using stablecoin reserve income to pay for network operating costs, rather than charging a markup on sorter fees like most second-layer networks;

• USDm will be issued through Ethena's USDtb framework, with its reserves mainly holding BlackRock's tokenized US Treasury bond fund (BUIDL) and liquid stablecoins. Initially, it will support swaps with USDtb rather than direct fiat redemption, aiming to reduce transaction fees and maintain stability;

• Market Adoption

  LitFinancial Issues Ethereum Stablecoin, Reshaping the Mortgage Process

  Quick Highlights

  • Michigan mortgage lender LitFinancial launched the US dollar stablecoin litUSD on the Ethereum blockchain, backed by 1:1 cash reserves;

  • The company plans to use stablecoins to reduce funding costs and improve financial management, and explore on-chain settlement of mortgages to make loan performance publicly traceable;

  • Brale is responsible for issuance and redemption services, and advisory firm Stably supports token economics and DeFi integration. Users can mint and redeem litUSD through bank transfers or USDC.

  Why It Matters

  • With the passage of the GENIUS Act, institutional stablecoins are accelerating, with transaction volume expected to reach $1 trillion in 2030. LitFinancial's move demonstrates how blockchain can reshape traditional mortgage market liquidity.

  BBVA partners with Ripple to provide retail cryptocurrency services, expanding its presence in the Spanish market

  Quick Points

  • Crypto infrastructure company Ripple has expanded its cooperation with Spanish banking giant BBVA, providing it with digital asset custody technology to support BBVA's newly launched Bitcoin and Ethereum trading and custody services for Spanish retail customers;

  • Ripple's Managing Director for Europe, Cassie Craddock, said that with the establishment of the EU's Markets in Crypto-Assets Directive (MiCA) in Europe, banks in the region are confident in launching the digital asset services their customers need. Ripple's custody technology helps banks provide crypto and digital asset services while maintaining security, compliance and efficiency;

  • Ripple has provided BBVA with a digital asset custody service. BBVA provides custody technology for its operations in Switzerland and Turkey, and the two parties are also collaborating on a real-time international remittance pilot program. Last month, BBVA was reported to have become one of the independent custodians for clients of Binance, the world's largest crypto exchange.

  Why It Matters

  • The establishment of the European MiCA regulatory framework provides regulatory certainty for traditional banks entering the crypto space. BBVA's active expansion of crypto services, as a mainstream bank, demonstrates the growing acceptance of digital assets among financial institutions. By partnering with Ripple, BBVA can directly provide end-to-end custody services to its clients, meeting growing consumer demand for cryptocurrencies while ensuring compliance with regulatory requirements.

  The world’s largest asset management giant BlackRock plans to tokenize ETFs

  Quick Overview

  • According to Bloomberg, the world’s largest asset management company BlackRock is considering putting its ETF funds on the chain, including tokenizing funds related to “physical assets” such as stock funds;

  • BlackRock’s iShares Bitcoin and Ethereum ETF products attracted $55 billion and $12.7 billion in inflows respectively. Both funds reached $10 billion in size in less than a year;

  • The company already has experience in on-chain products. Its BlackRock USD Institutional Digital Liquidity Fund (BUIDL) became the first to break through $10 BlackRock's move signals Wall Street's accelerated embrace of asset tokenization, echoing recent moves by Fidelity and Nasdaq, and potentially providing institutional investors with a new way to invest in physical assets on-chain.

  Fintech unicorn Ramp is recruiting senior engineers to build stablecoin payment infrastructure

  Key Points

  • Ramp is recruiting senior/director-level software engineers to build stablecoin payment and capital flow infrastructure, including wallet systems, payment channels and fiat currency settlement docking;

  • This role needs to integrate stablecoin capabilities into Ramp's core financial products under the premise of compliance, lead the technical architecture internally, and connect with financial partners externally;

  • Ramp has shifted from a simple interchange fee revenue model to software revenue and value-added services through AI-driven innovation. Following the completion of a $16 billion valuation financing in June this year, Ramp is currently negotiating a new round of $3.5 This strategic move will integrate Ramp's AI-driven financial platform with blockchain-based payments, providing corporate clients with more comprehensive financial solutions and potentially creating an innovative intersection between corporate payments, stablecoin applications, and financial automation.

  Capital Layout

  Figure IPO Hot: Blockchain Company's Stock Price Soared 24% on First Day

  Quick Overview

  • Blockchain finance company Figure successfully IPOed, raising $787.5 million. The stock was priced at $25, higher than expected, and closed at $31.11 on the first day, up 24.44%, with the company's valuation reaching $5.3 billion;

  • Figure co-founder Mike Cagney (former founder of SoFi) said that blockchain technology can reduce the number of stock market trading intermediaries from 7 to 2, enabling direct connection between buyers and sellers;

  • Why It Matters

    • Figure's successful IPO marks the mainstream acceptance of blockchain technology in traditional finance. The company's return from losses to profitability (net profit of $29.4 million in the first half of the year) validates the commercial value of blockchain in streamlining financial intermediary processes and improving transaction efficiency.

    Private equity startup Inversion Labs acquires traditional companies to embed blockchain

    Quick Overview

    • New York startup Inversion Labs plans to acquire low-profit margin companies and improve operational efficiency by embedding blockchain technology, thereby creating profit growth;

    • The company completed a $26.5 million seed round of financing, with a valuation of $100 million, led by crypto venture capital firm Dragonfly Capital, with participation from VanEck, ParaFi Capital and others;

    • Inversion will establish another Inversion Capital fund of more than $500 million for acquisitions. It has submitted multiple acquisition offers for South American telecom companies and aims to complete its first transaction within a year.

    Why it’s important

    • This innovative business model that combines private equity and blockchain provides institutional investors with low-risk crypto exposure while avoiding currency price fluctuations. It is expected to promote the large-scale application of blockchain technology in traditional industries through actual business cases.

    Kraken acquires Breakout, a trading platform co-founded by "Crypto Twitter" celebrities Mayne and Cred

    Quick Points

    • Kraken announced the acquisition of Breakout, a proprietary crypto trading platform, which enables traders to obtain up to $100,000 in single-account notional capital (or up to $200,000 for multiple accounts) without personal funds, and can retain up to 90% of the profits generated after successfully passing the assessment;

    • Breakout was founded in 2023 by crypto industry veterans TraderMayne, CryptoCred, Alex Miningham and Abetrade. The platform supports more than 50 cryptocurrency trading pairs, and BTC and ETH contracts can provide up to 5 times leverage; Breakout will be gradually integrated into the Kraken Pro platform;

    • Kraken Co-CEO Arjun Sethi said: "Breakout allows us to allocate capital based on demonstrated skills rather than access to capital... This is how a modern capital platform should operate. Transparent, programmable, and open to anyone with an advantage."

    Why it matters

    • This acquisition reflects a sharp increase in M&A activity in the crypto industry, driven by a more proactive regulatory environment under the Trump administration in the United States, market consolidation, and the need for infrastructure expansion. Breakout’s business model represents innovation in the trading space. It identifies talented traders through an assessment process and provides financial support, creating opportunities for those who lack personal capital but have trading skills. This “assess first, fund later” model may become an important development direction for future trading platforms.

    Tetra Digital secures $10 million in funding to develop a regulated Canadian dollar stablecoin

    Quick Highlights

    • Tetra Digital Group, a digital asset custodian in Alberta, Canada, announced it has raised approximately $10 million to develop and issue a regulated stablecoin pegged to the Canadian dollar. Investors in the project include Shopify, Wealthsimple, Purpose Unlimited, Shakepay, ATB Financial, National Bank, and Urbana Corporation, which has held a majority stake in Tetra since April.

    Quick Highlights

    • Tetra Digital Group, a digital asset custodian in Alberta, Canada, announced it has raised approximately $10 million to develop and issue a regulated stablecoin pegged to the Canadian dollar. Investors in the project include Shopify, Wealthsimple, Purpose Unlimited, Shakepay, ATB Financial, National Bank, and Urbana Corporation, which has held a majority stake in Tetra since April.

  • Coinbase acquires Sensible founding team to accelerate the construction of "Everything Exchange" strategy

    Quick Overview of Key Points

    • Coinbase acquired Jacob Frantz and Zachary Salmon, the two founders of the crypto income platform Sensible. This is the company's seventh acquisition or talent acquisition in 2025. Sensible will shut down operations in October;

    • The two founders will lead the key team of Coinbase's on-chain consumer strategy, focusing on simplifying DeFi access, improving use cases, making cryptocurrencies more user-friendly, and continuing to work to make cryptocurrencies an asset that people can use rather than just hold;

    • Coinbase Coinbase is fully committed to its vision of an "exchange for everything," with plans to add tokenized stocks, prediction markets, and early-stage token sales. Last month, it announced the integration of a decentralized exchange, offering traders access to "millions" of digital assets previously unavailable on the platform. Why it matters: Despite a 26% year-over-year decline in Coinbase's revenue in the second quarter, a drop of over 30% in spot trading volume, and a $307 million data breach, the company is actively expanding its business through acquisitions. This demonstrates Coinbase's shift toward becoming a comprehensive financial services platform, integrating traditional finance with crypto assets to create a one-stop platform where users can trade, borrow, stake, spend, and earn returns.

    Ant Digital Technology Plans to Tokenize Over $8.4 Billion in Energy Assets

    Quick Overview

    • According to Bloomberg, Ant Group’s blockchain arm, Ant Digital Technology, is advancing plans to put more than $8.4 billion (about 60 billion yuan) worth of energy assets on the blockchain. It has currently tracked the power output of approximately 15 million new energy devices (including wind turbines and solar panels) in China and monitored potential failures

    • The plan has gone beyond the planning stage. Ant has completed financing for three clean energy projects through tokenization, raising a total of approximately 300 million yuan (42 million US dollars) for the operating company;

    • A16z-backed Lead Bank completes $70 million in financing, with a valuation of $1.47 billion

      Quick Points

      • Lead Bank, a 97-year-old community bank in Kansas City, Missouri, was acquired by a team of technology executives in 2022 with a valuation of $1.47 billion.

      Quick Points

      • Lead Bank, a 97-year-old community bank in Kansas City, Missouri, completed a $70 million Series B financing, with a valuation of $1.47 billion.

    • Lead Bank, a 97-year-old community bank in Kansas City, Missouri, was acquired by a team of technology executives in 2022 with a valuation of $1.47 billion.

    • Lead Bank, a crypto-friendly bank in Missouri, has completed a $70 million Series B financing, with a valuation of $1.47 billion.

  • Lead Bank was acquired for $56 million; following the acquisition, the bank expanded its Banking-as-a-Service (BaaS) platform, attracting several high-profile partners from the fintech and crypto sectors. In April of this year, Lead Bank partnered with Stripe and Visa to provide banking services for Bridge, its stablecoin-linked payment card platform. Why It Matters: With the rapid development of the crypto and fintech sectors, there is a growing number of traditional banking institutions transitioning to digital asset-friendly services. The significant increase in Lead Bank's valuation in a short period of time (from its acquisition price of $56 million to a valuation of $1.47 billion) reflects the market's strong recognition of banks that understand and serve the unique needs of cryptocurrency and fintech companies.

  Tether plans to make a big move into the gold industry chain and denies selling Bitcoin

  Key Points

  • According to the Financial Times, Tether, the world's largest stablecoin issuer, is considering significantly increasing its gold exposure and may invest in "the entire gold supply chain from mining and refining to trading and royalty companies." CEO Paolo Ardoino hinted that the report is true;

• Tether has acquired nearly 33% of the shares of Elemental Altus Royalties, a Canadian precious metals royalty company. The nearly 250,000 Tether Gold tokens currently issued are backed by 7.66 tons of physical gold in a Swiss vault;

Key Points

• Ardoino The company denied selling off Bitcoin and clarified that the reduction in its BTC reserves from 92,650 to 83,274 was not a sale, but rather a transfer of approximately 20,000 BTC to Twenty One Capital, a Bitcoin treasury company controlled by Tether.

Why it matters

• With gold prices hitting record highs, Tether is using the lucrative profits from its stablecoin business to diversify its asset allocation. Its strategy of entering the traditional gold industry chain demonstrates the integration of crypto and traditional finance and reflects the crypto giant's growing strategic emphasis on physical assets.

Why crypto VCs are betting on prediction markets: the rise of two giants and the turning point of the industry

Quick Overview

• Prediction market investment is experiencing an explosion: 11 deals have received over $216 million in financing in 2025, far exceeding the $80 million in 2024 and nearly $60 million in 2021; the newly established The Clearing Company received a $15 million seed round, Kalshi completed a $185 million financing in June with a valuation of $2 billion, and Polymarket is reportedly raising over $200 million at a valuation of $1 billion;

• Regulatory breakthroughs are the key catalyst: in May 2025, The CFTC dropped its appeal in the Kalshi case, essentially affirming the federal court ruling that allowed election contracts; last week, the CFTC also gave Polymarket the green light to return to the US market through its acquisition of QCEX and its no-action letter regarding event contract record-keeping, indicating that regulators are now willing to engage constructively;

• The success of Polymarket and Kalshi is attributed to several key advantages: liquidity (investing large amounts of capital to solve the "chicken and egg" problem), market influence (Polymarket has become synonymous with prediction markets, and Kalshi has established a reputation as a regulated financial platform) and persistence in the face of regulatory pressure and meager trading volumes, giving them brand power, liquidity and distribution channels.

Why It Matters

• The prediction market's move from the fringe to the mainstream represents a major shift in the crypto space. Trading volume has not subsided after the US election, but has instead shifted to sports, economic, and cultural events. The head of Coinbase Ventures called it a "killer on-chain use case." Many investors believe that this area could be comparable in size to the stock market in the future. It is attracting institutional investors, including hedge funds, and will expand to sports markets accessed by platforms such as FanDuel and DraftKings. However, liquidity remains fragile, event resolution solutions have structural weaknesses, and socially harmful markets and trading integrity issues are also potential risks.

Regulatory compliance

?️Nasdaq seeks SEC approval for stock tokenization plan

Quick overview

• Nasdaq, a major US stock exchange, has submitted an application to the SEC seeking permission to put its stocks on the blockchain. The plan will allow customers to choose between traditional stock trading or on-chain trading through tokenized stocks, and both methods will have equal priority;

• Nasdaq stated that tokenized stock transactions will be cleared and settled through the Depository Trust Company (DTC) like ordinary stock transactions; those who purchase tokens will obtain full rights to the underlying shares, including voting and clearing rights; the new system will be launched after DTC establishes the necessary infrastructure and post-trade settlement services;

?️SEC Chairman Atkins: On-chain financing should "not face endless legal uncertainty"

Quick Overview of Key Points

• In his speech to the OECD, U.S. SEC Chairman Paul Atkins reiterated that "most crypto tokens are not securities" and said that entrepreneurs and investors should be able to raise funds on the chain without "facing endless legal uncertainty";

• The SEC is implementing the "Crypto Plan" to modernize securities rules to support the on-chain market and allow trading platforms to provide trading, lending and staking services "under a single regulatory framework";

• Atkins criticized the previous administration for "weaponizing" the SEC The SEC and CFTC will hold a roundtable meeting on September 29 to discuss bringing "innovative products" such as perpetual contracts and DeFi back to the United States and promoting a "golden age" of financial innovation in the United States.

?️The Senate draft bill proposes that the SEC and CFTC establish a joint committee to end the dispute over crypto regulatory power

Quick Overview of Key Points

• The draft of the Responsible Financial Innovation Act proposes that the SEC and CFTC establish a joint advisory committee on digital assets to coordinate crypto regulatory affairs. The two agencies must publicly respond to the committee's recommendations and explain the reasons for adopting or rejecting them

• The bill adds clear protection clauses for DeFi developers, stipulating that developers who run decentralized exchanges or automated protocols are not automatically subject to broker-dealer or anti-money laundering regulations. The scope of protection covers node operators, liquidity providers and wallet developers;

Why it matters

• The bill aims to end the regulatory dispute between the SEC and the CFTC, while addressing the legal risk concerns of developers raised by the conviction of the founder of Tornado Cash. Senator Lummis expressed his hope to submit the final version to President Trump for signature before the end of the year.

U.S. Senate Democrats introduce crypto regulatory framework, which differs significantly from the Republican version

Key Points at a Glance

• 12 Democratic senators released a seven-pillar crypto regulatory framework, supporting the CFTC to regulate the non-security token spot market and establish a digital asset securities certification process, making it the party’s most comprehensive crypto regulatory proposal to date;

• The Democratic framework requires crypto platforms to register as financial institutions with FinCEN, prohibits stablecoin issuers from paying interest directly or through affiliates, and labels DeFi as a key carrier of illegal finance, but does not clarify whether protocol-level software teams need to register;

• Macro Trends

  Stablecoins pose a fundamental threat to U.S. community banks and challenge their deposit base

  Quick Points

  • Unlike fintech companies that challenge traditional banks mainly through product innovation and user experience, stablecoins pose a fundamental threat to the bank's deposit base by imitating deposit functions;

  • The U.S. Office of the Comptroller of the Currency (OCC) has given the green light to the integration of encryption and banking, allowing blockchain platforms to obtain many privileges of regulated banks. Supervisor Jonathan Gould said that banks' participation in encryption-related activities is legal and should not be stigmatized;

  • Several banking associations have warned that the GENIUS The bill includes provisions that allow some crypto exchanges to indirectly pay interest to stablecoin holders, potentially leading customers to transfer funds from banks to crypto exchanges to earn returns.

  Why It Matters

  • Stablecoins represent a restructuring of the value transfer layer and challenge the foundations of the banking system. The traditional local service advantages of community banks are becoming increasingly difficult to maintain in the era of digital wallets and blockchain payments. The focus of competition in the financial industry is shifting from functional features to the infrastructure that controls the flow of funds and money transfers.

  Polymarket sees record high new market creation as platform prepares to return to US market

  Quick Points

  • Prediction market platform Polymarket created 13,800 new markets in August, about 2,000 more than the previous record in July. Despite this, overall trading volume on the platform has slowed this year, with the number of active traders falling to about 227,000, the lowest since October last year;

  • Polymarket CEO Shayne Coplan said this week that the platform has received the "green light" to return to the US market after the CFTC took no action on QCX's swap data reporting and recordkeeping regulations for event contracts; Polymarket plans to acquire a derivatives exchange QCEX has re-entered the US market for the first time since January 2022. The platform boasts high-profile backers: Donald Trump Jr. invested in Polymarket last month and joined its advisory board, and in June of this year, Elon Musk's X announced a "joining forces" with the prediction platform. Why It Matters: Polymarket, a decentralized prediction market platform, gained significant attention during the 2024 US presidential election. However, overall trading volume has declined since the election, from a peak of $2.6 billion to hovering around $1 billion in recent months. The platform's upcoming return to the US market could present new growth opportunities. The high level of new market creation indicates the platform is diversifying its prediction offerings, while the backing of the Trump family and Musk provides significant endorsements. The prediction market is a rapidly growing segment in the crypto space, and Polymarket’s development trajectory will be an important indicator of the industry’s development.