Digital asset firm New Frontier Labs has entered into a partnership with BitGo Bank & Trust National Association to facilitate the issuance and custodial services for the FYUSD stablecoin. According to Cointelegraph, this dollar-pegged token is designed for institutional investors in the Asia region. BitGo's announcement highlighted that FYUSD adheres to the GENIUS Act stablecoin regulatory framework, which mandates 1:1 backing with cash deposits or short-term U.S. government debt instruments, along with anti-money laundering (AML) and know-your-customer (KYC) requirements.
The company has also introduced 'Fypher,' a suite of stablecoin infrastructure tools that provides a programmable settlement layer for the FYUSD token. This allows it to be utilized by autonomous AI agents for commercial transactions. U.S. Treasury Secretary Scott Bessent has praised stablecoins as a means to maintain U.S. dollar dominance by reducing settlement times, lowering transaction costs, and democratizing access to U.S. dollars for those without traditional banking access.
The total market capitalization of stablecoins currently stands at over $295 billion, a decrease from the peak of over $300 billion recorded in December, as reported by RWA.XYZ. Tether, the issuer of the USDt (USDT) dollar-pegged token, is experiencing a significant monthly drop in its circulating supply, marking the steepest decline since the collapse of the FTX crypto exchange in 2022. At the time of writing, the circulating supply was 183.64 billion USDT, according to CoinMarketCap data.
Despite USDt maintaining its position as the world's largest stablecoin by market capitalization, its circulating supply has decreased by $1.5 billion in February, as per data from Artemis. This follows a $1.2 billion drop in January, indicating a second consecutive month of increased user redemptions. These redemptions may suggest a broader contraction in the crypto market, as investors liquidate their positions and move their holdings off-chain, potentially into other investments. However, Tether representatives informed Cointelegraph that the data reflects short-term positioning rather than a long-term trend of sustained outflows and market contraction.
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