Author: Cobo

This issue focuses on the differentiated evolution of stablecoins in global North and South markets: which regions have truly unlocked the potential of stablecoins as "infrastructure"? What new challenges are emerging that test their institutional adaptability and compliance flexibility?

In highly mature financial markets like the United States, stablecoins struggle to deliver significant efficiency gains; however, in underbanked regions such as Nigeria, Argentina, and the Philippines, stablecoins have become a practical solution for cross-border payments and asset preservation. Tether has made breakthroughs in these "market failures," with profits exceeding $13 billion in 2024. Now, Tether has proactively abandoned its Southern strategy in the U.S. and is shifting towards building AI wallets, IoT interfaces, and programmable payment SDKs, exploring a new generation of "digital operating systems."

If Tether's strategy reflects the "local adaptation" of stablecoins to different financial soils, then the actions of Mastercard and Fiserv signify that traditional institutions are strategically absorbing stablecoin capabilities in response to the structural trend of stablecoin annual transaction volumes surpassing $27.6 trillion, exceeding the combined total of Visa and Mastercard. Meanwhile, regulatory risks are intensifying: a SlowMist report revealed that "HuionePay" on the TRON network is suspected of involving over $50 billion in illegal fund flows, exposing systemic risks; Russia is accelerating the construction of a cross-border payment network anchored by its own currency and independent exchanges, aiming to bypass SWIFT and the dollar system.

Stablecoins are becoming a convergence point for industrial opportunities, geopolitical competition, and regulatory reshaping.

Market Overview and Growth Highlights

The total market capitalization of stablecoins has reached $252.937 billion, with a week-on-week increase of $1.165 billion. In terms of market structure, USDT continues to dominate, accounting for 62.57%; USDC ranks second with a market cap of $61.37 billion, representing 24.26%.

Blockchain Network Distribution (Data from DefiLlama)

Top three networks by stablecoin market cap:

• Ethereum: $125.685 billion
• TRON: $80.794 billion
• BSC: $10.474 billion

Top 3 networks with the fastest weekly growth:

• Movement: +25.43% (USDC share 64.15%)
• Algorand: +17.44% (USDC share 96.55%)
• Sei: +16.34% (USDC share 83.30%)

Settlement is Power: How Mastercard is Redefining Card Organization Moats with Stablecoins

As the regulatory framework for stablecoins, such as the GENIUS Act, becomes clearer, traditional financial institutions are adjusting their digital asset strategies. In the previous weekly report, we focused on the potential outcomes for Tether, Circle, and banks under the new regulations. This issue highlights the card organization giant Mastercard, analyzing how it is transforming its strategy with stablecoins, evolving from a traditional "network dispatcher" to a core coordinator of on-chain value flow.

In 2024, the annual transaction volume of stablecoins surpassed the combined total of Visa and Mastercard for the first time, significantly shaking the moat of traditional card networks. Mastercard clearly realizes that relying solely on clearing rules and transaction fees can no longer maintain its monopoly position in the long term. Mastercard's latest strategic moves are shifting its focus from the "midstream of consumer support" to the starting point of the user journey on-chain: partnering with Chainlink, Shift4, Zerohash, and Uniswap to integrate card payments with on-chain delivery, thereby bypassing the cumbersome purchasing process of centralized exchanges and directly connecting fiat currency with on-chain assets.

If Mastercard's previous initiatives, such as launching crypto debit cards with Kraken and collaborating with MoonPay to support merchants accepting stablecoin payments, were focused on penetrating the "midstream" of crypto payment processes, then this collaboration signifies that Mastercard is now participating in the initial stages of converting fiat currency to crypto assets, specifically in building the entry point for on-chain assets. This is a more aggressive step aimed at achieving conversion at the starting point of the user journey.

Mastercard's greater ambition is to penetrate the "final settlement layer" of funds. In the traditional fiat currency system, the final transfer of funds is dominated by commercial banks and central banks, with Mastercard only controlling the instructions and clearing logic. However, in a payment network driven by stablecoins, it is attempting to take over more underlying processes: providing stablecoin minting and redemption services for enterprises and financial institutions through the Mastercard Move platform; and collaborating with Paxos (USDG), Fiserv (FIUSD), and PayPal (PYUSD) to establish an on-chain wholesale settlement network, gaining coordination and profit-sharing rights in the inter-institutional stablecoin circulation.

Mastercard's core judgment is: the closer one is to settlement, the more one can determine the direction and distribution of value. In the on-chain era, there is a renewed competition for payment governance rights and the authority to set technical standards. From the information flow instruction layer to the value flow settlement layer, Mastercard's stablecoin strategy is a reconstruction of its "platform power."

Tether Bets on Emerging Markets and Programmable Finance

In the previous stablecoin weekly report, we mentioned that the GENIUS Act has set a "orderly exit" timeline for USDT in the U.S., and Tether may have to exit compliant platforms and focus on "global South" markets. This week, Tether CEO Paolo Ardoino's comments on the Bankless podcast further confirmed the strategic logic behind this shift. He pointed out that in the context of the U.S. financial efficiency reaching 90%, the marginal improvements that stablecoins can bring are limited, making it difficult to support a profitable model, ultimately leading to price wars and "involution." In contrast, in emerging markets with financial efficiency around 20% (such as Nigeria), if stablecoins can improve efficiency to 50%, this 30% structural gain can support stablecoin premiums, and in extreme cases (facing severe fluctuations in local currency, etc.), local users may even be willing to let Tether retain their interest earnings.

Therefore, Tether has abandoned the idea of replicating its "global South" business model in the U.S. and is shifting towards a new path centered on yield returns (similar to tokenized money market funds) and programmability: including building AI agent wallets, integrating IoT devices, opening cross-chain wallet SDKs, and reconstructing distribution networks through channels like Rumble.

Tether's "dual strategy" reflects the differentiated fate of stablecoin business models in different financial soils. In the U.S., where financial efficiency has reached its peak, the popularization of stablecoins may need to transcend the traditional narrative of "cost and speed" and instead focus on yield sharing, programmability, and deep integration with new economic scenarios. Its continued expansion in global South markets confirms that "solving market failures" is the eternal rule for stablecoins to achieve product-market fit. This game about the future of currency has just begun.

SlowMist: HuionePay Processes Over $50 Billion USDT on TRON Chain, Fund Flows Exhibit Typical Illegal Characteristics

In the latest analysis from the on-chain anti-money laundering platform SlowMist, a crypto platform named "HuionePay" has been revealed to be involved in large-scale illegal fund flows, processing over $50 billion USDT through the TRON chain in the past year and a half, exhibiting several typical high-risk characteristics.

On-chain data shows that the platform's net outflow of funds reached as high as 2.771 billion USDT, with withdrawal transaction counts peaking at 150,000 transactions per day in May 2025, far exceeding the frequency of deposits during the same period, reflecting a "high-frequency withdrawal" model of rapid fund transfer. This behavior is highly consistent with illegal uses such as money laundering and capital flight.

Despite the questionable nature of the platform, the number of active deposit addresses continues to grow, exceeding 80,000, indicating its appeal to a specific user group. Several core withdrawal addresses handle amounts reaching billions of USDT and have on-chain interactions with addresses on the OFAC sanctions list and known attackers (such as the BingX hacker), showing high fund concentration and traceable paths, indicating direct links to underground fraud networks.

Notably, the report points out that several key addresses may be controlled by "Huione Guarantee" (formerly "Huione Guarantee"), implicating a broader Southeast Asian fraud network. Fund activities are concentrated between UTC 03:00–13:00, aligning with the operational time zone of the region, further validating the consistency of its geographical positioning and behavioral patterns.

On-chain intelligence also reveals the key role of regulatory collaborative crackdowns: including Tether freezing assets, FinCEN intervention, Telegram channel bans, and joint reports released by the United Nations Office on Drugs and Crime (UNODC) and Elliptic. These actions ultimately led to HuionePay announcing its cessation of operations, becoming a typical case of "multilateral encirclement" in the stablecoin field.

This incident once again highlights the systemic risk exposure of USDT on the TRON network and reinforces the strategic value of on-chain tracking tools (such as MistTrack) in identifying illegal fund flows and facilitating law enforcement collaboration.

Market Adoption

Mastercard Fully Embraces Stablecoins, Integrating Paxos, Fiserv, and PayPal's Three Major Stablecoins

Key Points Overview

• Mastercard announced the integration of PayPal's PYUSD, Paxos-led USDG, and Fiserv's newly launched FIUSD into its global payment network, expanding its support for the Circle USDC ecosystem;
• The payment giant will collaborate with Fiserv to introduce FIUSD into card products, on-chain and off-chain channels, and merchant settlement systems, and join the Global Dollar Alliance behind the USDG stablecoin;
• Mastercard will support cross-border stablecoin transactions through its Move service and allow consumers to use both fiat and stablecoin balances simultaneously through its One Credential technology.

Why It Matters

This series of initiatives represents a rapid embrace of stablecoins, a $260 billion and fast-growing asset class, by global banks and payment giants. With the U.S. Senate passing the GENIUS Act to provide a regulatory framework for the stablecoin industry, institutional adoption is accelerating. Mastercard's Chief Product Officer Jorn Lambert stated, "While most scenarios will still see consumers using fiat and Mastercard, regulated stablecoins are undoubtedly part of the evolution of digital payments." Mastercard's moves mean that financial institutions and businesses will soon be able to mint, redeem, and settle specific stablecoin transactions, allowing consumers to use stablecoins for transfers and payments just like traditional currency, including at 150 million merchant locations worldwide. These integrations will bring stablecoin payments closer to mainstream financial services, significantly enhancing their practicality and adoption.

Chainlink and Mastercard Collaboration Will Enable Nearly 3 Billion Cardholders to Directly Purchase Cryptocurrency On-Chain

Key Points Overview

• Chainlink and Mastercard announced a network collaboration that enables over 3 billion Mastercard cardholders to directly purchase cryptocurrency on-chain;
• The service integrates multiple participants: Shift4 processes card payments, Zerohash hosts fiat currency and provides crypto liquidity, XSwap and Uniswap execute final token swaps in decentralized markets;
• Chainlink's interoperability protocol links these steps together, transmitting transaction data between the card network and multiple blockchains.

Why It Matters

This collaboration is Mastercard's latest move to deepen its cryptocurrency strategy, following its partnerships with MoonPay and Kraken. Raj Dhamodharan, head of Mastercard's blockchain business, stated that the company aims to "bridge the gap between on-chain commerce and off-chain transactions." Sergey Nazarov, co-founder of Chainlink, emphasized that this partnership establishes a "critical connection between the traditional payment world and Mastercard's user base of over 3 billion cardholders." This initiative will significantly simplify the process for mainstream users to purchase cryptocurrency, eliminating the barriers of traditional exchange registration and identity verification, potentially bringing a huge new user base to the cryptocurrency market while also marking a significant increase in traditional payment giants' acceptance of blockchain technology.

Fintech Giant Fiserv Announces Launch of FIUSD Stablecoin for Global Financial Institutions

Key Points Overview

• Fiserv plans to launch the dollar-pegged stablecoin FIUSD and a digital asset platform by the end of 2025, aimed at providing digital asset services to its 3,000 regional and community banks and 6 million merchants;
• FIUSD will be deployed on the high-performance Solana blockchain and achieve deep integration with industry leaders such as Mastercard, Circle, Paxos, and PayPal. Fiserv's banking clients will be able to access it with "zero additional costs" and instantly reach over 150 million merchants globally through Mastercard's multi-token network;
• FIUSD enables smart contracts, automated compliance, and 24/7 operations, which are difficult for traditional banking systems to match. Fiserv is shifting from relying on high transaction fees to a new revenue model based on reserve asset returns, small fee sharing, and customer retention. This indicates a shift in the entire payment industry from high-profit transactions to low-profit, high-volume models.

Why It Matters

This move marks a strategic "embrace" of stablecoins by traditional financial giants. In response to the impact of stablecoin transaction volumes surpassing $27.6 trillion in 2024 (exceeding the combined total of Visa and Mastercard), Fiserv's actions are seen as "damage control" against the high-profit model of traditional payments. It aims to retain customer deposits and secure a place in the digital asset ecosystem by providing stablecoin services. This aligns with market demand for instant, composable financial services, forcing traditional giants to adapt.

PwC Releases Hong Kong Web3 Blueprint, Establishes Five Action Groups

Key Points Overview:

• PwC, in collaboration with Web3 Harbour, released the "Hong Kong Web3 Blueprint," focusing on five key driving factors: talent, market infrastructure, standards, regulation, and funding contributions;
• PwC Hong Kong partner Peter Brewin announced the establishment of five special action groups in August, each focusing on stablecoins, fund management, virtual asset trading platforms (VATP), legal compliance, and custodial over-the-counter trading;
• The blueprint emphasizes decentralized transparency, security, and user empowerment, aiming to provide systematic guidance and support for the development of Hong Kong's Web3 industry.

Why It Matters:

The active involvement of the "Big Four" accounting firms in Hong Kong's Web3 strategic planning indicates that professional service institutions are accelerating their layout in the digital asset ecosystem, promoting standardized development in the industry.

South Korean Payment Giant Kakao Pay Applies for KRWKP Stablecoin Trademark

Key Points Overview:

• Kakao Pay submitted 18 trademark applications related to "KRWKP" to the Korean Intellectual Property Office, covering categories such as stablecoin names, payment settlement, and cryptocurrency wallets;
• Market analysis suggests that this move may be Kakao Pay's preparation to launch its own Korean won stablecoin, demonstrating its intention to enter the crypto payment space;
• The company's official response stated that the trademark registration is merely a precautionary measure to address future business possibilities, and there are currently no specific plans for stablecoin issuance.

Why It Matters:

The interest of mainstream payment platforms in stablecoins indicates that South Korean fintech giants are actively positioning themselves in the digital asset payment arena.

Cenoa Partners with Bridge to Unlock Global Opportunities for Entrepreneurs in Emerging Markets, Stablecoins as Key Tools

Key Points Overview:

• The Cenoa platform provides blockchain-based financial infrastructure for entrepreneurs in emerging markets (such as Turkey and Nigeria), addressing global payment needs unmet by traditional banking systems;
• Through collaboration with Bridge, Cenoa users can instantly obtain virtual dollar accounts, with funds automatically converted to USDC and deposited into user wallets, bypassing delays, high exchange rate markups, and restrictions of traditional banking systems;
• Compared to traditional services like PayPal and Wise, Cenoa offers cross-border payment fees that are 80% lower, reducing total costs by nearly 10 times, attracting over 10,000 users in Turkey within six months, with monthly transaction volumes exceeding $5 million.

Why It Matters

E-commerce sellers and freelancers in emerging markets need dollar accounts to participate in global trade (such as selling on Amazon or receiving payments through Upwork), but traditional service account opening processes are slow and costly. Cenoa addresses this pain point using stablecoin infrastructure, reducing customer onboarding time to under three minutes and increasing transaction volumes by 30 times. This collaboration demonstrates the practical application value of stablecoins as tools for economic inclusivity, solving issues related to foreign exchange fees of up to 8% and providing emerging market users with fair opportunities to participate in the global economy. Cenoa is leveraging blockchain technology and stablecoins to help millions of entrepreneurs in emerging markets overcome systemic barriers and lift them out of poverty, placing them on equal footing with their Western counterparts.

Ethereum Stablecoin Users Exceed 750,000, Setting New Historical Highs

Key Points Overview:

• The Ethereum network's major stablecoins, including USDT, USDC, BUSD, and DAI, have surpassed 750,000 weekly active users, setting a new historical high, indicating that stablecoins have shifted from speculation to utility-driven adoption;
• USDT's supply on the Ethereum network has reached $73 billion, while USDC stands at $41 billion, together accounting for the vast majority of the $134 billion stablecoin market on the network;
• Competition among stablecoin issuers is intensifying, attracting users through lower transaction fees, enhanced yield opportunities, and incentives for holders, which is expected to promote service improvements and innovation.

Why It Matters:

The growth in stablecoin users reflects the trend of digital dollar adoption, and as traditional financial institutions integrate stablecoin infrastructure, it will become a key component of digital commerce.

Rain Partners with Toku to Launch Global Stablecoin Payroll System Covering Over 100 Countries

Key Points Overview:

• Stablecoin payment platform Rain has partnered with compliance service provider Toku to launch a cross-border stablecoin payroll system, allowing companies to settle employee salaries in real-time using stablecoins;
• The system supports stablecoins such as Circle's USDC, Ripple's RLUSD, and Global Dollar's USDG, with plans to gradually add more options based on customer demand and compliance assessments;
• The platform seamlessly integrates with mainstream payroll systems like ADP, Workday, and Gusto, allowing companies to complete deployment within a week while meeting labor law and tax compliance requirements in over 100 countries.

Why It Matters:

Stablecoins are rapidly expanding into practical business applications, and the advancement of the GENIUS Act provides regulatory clarity for the industry. Blockchain payroll payments could fundamentally change traditional payroll methods, enabling instant settlement upon completion of work.

New Product Updates

Bitkit Adds Bitcoin Payment Feature for Direct Settlements of Daily Services like Netflix

Key Points Overview:

• The Bitkit wallet app has added a Bitcoin direct payment feature, allowing users to pay for daily services such as Netflix, Airbnb, groceries, and mobile data directly with Bitcoin;
• This feature eliminates the need for bank intermediaries, removing traditional payment friction and simplifying the use of Bitcoin in real-world scenarios;
• Bitkit aims to promote the practical application of Bitcoin as a daily payment tool, encouraging users to "take action and live with Bitcoin."

Why It Matters:

The expansion of Bitcoin applications into everyday consumption scenarios lowers the practical usage threshold for cryptocurrencies, helping to drive crypto payments toward mainstream adoption.

Circle Announces USDC and Cross-Chain Transfer Protocol CCTP V2 Officially Launching on Codex Blockchain

Key Points Overview:

• USDC and the cross-chain transfer protocol CCTP V2 are now live on the Codex blockchain, designed specifically for B2B stablecoin transactions;
• Circle Mint and its API fully support USDC on Codex, enabling qualified enterprises to easily access USDC liquidity and enjoy the fast and secure network advantages of Codex;
• Codex is a new EVM blockchain focused on performance, compliance, and cost efficiency, aimed at bringing more real-world business activities on-chain, particularly in the most challenging payment corridors.

Why It Matters

The launch of USDC on Codex will drive various enterprise-level use cases: enterprise-level stablecoin settlements, on-chain foreign exchange and multi-currency settlements, and cross-chain transfers. Through the CCTP V2 protocol, users can securely transfer USDC between Codex and other supported chains within seconds, without relying on liquidity pools or third-party fillers. Qualified enterprises can apply for Circle Mint accounts to access USDC deposit/withdrawal channels on Codex, while small and medium-sized enterprises and individuals can access USDC services through Circle's partner network. This integration further expands the USDC ecosystem, providing enterprises with regulatory-compliant digital dollars for accelerating payments, global settlements, and simplifying financial operations.

Dynamic Launches "Stablecoin Accounts" and "Stablecoin Hub"

Key Points Overview:

• Dynamic has launched "Stablecoin Accounts" to help fintech and global payment teams launch stablecoin-based currency applications in days (rather than months);
• This solution aims to address the issues of fragmented stablecoin infrastructure and crypto complexity, simplifying the entire process including wallet infrastructure, on-chain and off-chain channels, and payment processes;
• The concurrently launched "Stablecoin Hub" is a free evolving resource to help teams navigate the stablecoin ecosystem, becoming the preferred destination for stablecoin development learning.

Why It Matters

As the stablecoin market expands and institutional acceptance increases, developing infrastructure has become a key pain point in the industry. Dynamic's new initiative directly addresses the technical barriers faced by fintech companies and payment teams when adopting stablecoins, accelerating the adoption of stablecoin applications by simplifying infrastructure and lowering development thresholds.

Former Stripe Growth Executive Launches Borderless to Help African Diaspora Invest Collectively in Startups and Real Estate

Key Points Overview:

• Joe Kinvi founded the Borderless platform using the equity gains from acquiring Touchtech Payments through Stripe, helping African diaspora collectively invest in startups and real estate in their home countries;
• The UK-based platform has processed over $500,000 in transactions since its beta testing last year, with over 100 communities on the waiting list, supporting investments in more than 10 startups and 2 real estate projects in Kenya;
• Borderless addresses major pain points in cross-border collective investment: frozen bank accounts, currency mismatches, regulatory requirements, and certification rules, by directly routing funds to verified sellers, escrow accounts, or lawyers to establish trust.

Why It Matters

African diaspora remits tens of billions of dollars to their home countries each year, but very little is invested in productive assets. Kinvi estimates that around $30 billion in immigrant savings goes unused each year. Borderless enables diaspora members to safely make collective investments with a minimum investment of $1,000 for startups and $5,000 for real estate by providing compliant backend infrastructure. The platform operates under the UK regulatory framework, ensuring legal promotion of investment opportunities to the diaspora. Unlike platforms focused on remittances (such as Zepz, LemFi, and NALA), Borderless focuses on long-term investment solutions. The company has raised $500,000 in seed funding from sources including DFS Lab, Paystack CTO Ezra Olubi, and executives from Stripe and Google.

SoFi Announces Return to Crypto Space, Launching Stablecoin-Based Cross-Border Remittance Service

Key Points Overview

The US fintech platform SoFi announced it will launch international remittance services through blockchain and stablecoins, and restore cryptocurrency investment features;

The new remittance service will allow users to send US dollars and specific stablecoins around the clock via "well-known" blockchain networks, with funds quickly convertible to local currency and deposited into the recipient's account;

SoFi plans to restart cryptocurrency trading services later this year, allowing users to buy, sell, and hold major cryptocurrencies like Bitcoin and Ethereum, with potential future expansions into staking and crypto-backed lending services.

Why It Matters

SoFi suspended all cryptocurrency-related services in 2023 to obtain a banking license, and its return to the crypto space marks a renewed embrace of digital assets by fintech companies in a more favorable regulatory environment under the new government. The latest guidance from the Office of the Comptroller of the Currency (OCC) allows nationally chartered banks to provide crypto custody and stablecoin-related services, providing regulatory support for SoFi's strategic shift. CEO Anthony Noto stated, "The future of financial services is being fundamentally reshaped by cryptocurrencies, digital assets, and broader blockchain innovations." SoFi will leverage its Galileo platform to provide blockchain technology infrastructure to third parties, indicating that it views crypto services not only as a new revenue source but also as a key component of its overall strategic transformation.

Taurus Launches Industry's First Privacy-Enabled Stablecoin Contract Built on Aztec Network

Key Points Overview:

• Digital asset infrastructure company Taurus (clients include Deutsche Bank and State Street) has launched the first privacy stablecoin contract, targeting financial institutions hesitant to use stablecoins due to privacy concerns;
• The contract is built on the a16z-supported privacy Ethereum Layer 2 network Aztec Network, combining zero-knowledge proof privacy protection with compliance features similar to USDC, including mint/burn controls and emergency pause;
• The new system allows companies to hide employee names and amounts in cross-border payroll payments while retaining access for regulators when necessary. Taurus expects the global supply of stablecoins to reach $1-2 trillion by 2030.

Why It Matters:

Privacy stablecoins address a key barrier to institutional adoption, and innovations that balance privacy protection with compliance requirements will accelerate the use of stablecoins in corporate payments and treasury management in the context of advancing the GENIUS Act.

Crypto Platform Kraken Launches Krak App, Directly Challenging Venmo and Cash App

Key Points Overview:

• Crypto exchange Kraken announced on Thursday the development of a financial services app called Krak, allowing global users to send and receive crypto and traditional currency across borders at almost no cost;
• The app will support over 300 assets and plans to launch physical and virtual debit cards in the coming weeks, with the company also offering credit services such as loans and credit cards;
• Krak users can earn rewards of up to 10% on specific digital assets, and holding USDG stablecoin can yield up to 4.1%. Kraken does not charge transaction fees and does not stake customer assets.

Why It Matters:

Crypto companies are accelerating the development of banking-like services, blurring the lines between digital assets and fintech. Kraken's move will directly compete with traditional financial apps like Revolut and Cash App, laying the foundation for revenue diversification ahead of its planned IPO early next year.

Regulatory Compliance

Eight Major Banks in South Korea Join Forces to Establish KRW Stablecoin

Key Points Overview:

• Eight major South Korean banks, including Kookmin Bank and Shinhan Bank, are jointly establishing a joint venture to issue a KRW stablecoin, with the project currently in the infrastructure discussion phase;
• The project is being promoted in collaboration with the Bank of Korea's Open Blockchain and Decentralized Identifier Association and the Korea Financial Telecommunications and Clearing Institute, with a launch expected as early as the end of the year;
• The team is considering two issuance models: a trust model (issuing after customer funds are independently trusted) and a deposit token model (directly linked to bank deposits).

Why It Matters:

The large-scale entry of traditional financial institutions into the stablecoin space indicates that institutional-grade stablecoin solutions are becoming a key focus of innovation in the financial system.

Hong Kong Accelerates Digital Asset Regulatory Framework, Stablecoin Regulations to Launch in August

Key Points Overview:

• Hong Kong's Financial Secretary Paul Chan announced that 10 virtual asset trading platform licenses have been issued, with another 8 applications under review, while completing stablecoin legislative work;
• The "Stablecoin Regulation" will take effect on August 1, making Hong Kong one of the first jurisdictions in the world to establish a statutory regulatory framework for stablecoins;
• The Monetary Authority's Chief Executive Eddie Yue stated that the regulatory requirements for stablecoin issuance are strict, comparable to those for e-wallets and banks. The first phase will issue only a few licenses for specific scenarios such as cross-border trade.

Why It Matters:

Hong Kong is demonstrating its strategic positioning and competitiveness in establishing a regulated digital asset center by advancing both exchange licensing and stablecoin regulation through a clear regulatory framework.

Hong Kong Releases Digital Asset Policy Declaration 2.0, Aiming to Build a Global Digital Asset Innovation Center

Key Points Overview:

• The Hong Kong Special Administrative Region government announced the "LEAP" framework, designating the Securities and Futures Commission as the main regulatory body for digital asset trading and custody services, with stablecoin regulations to be implemented on August 1;
• The government plans to normalize the issuance of tokenized bonds (having already issued HKD 6.8 billion in tokenized green bonds), clarify that tokenized ETFs are exempt from stamp duty, and explore the use of stablecoins for government payments;
• The declaration emphasizes the tokenization of real-world assets (RWA) as key to enhancing market efficiency, promoting applications in various fields such as precious metals and renewable energy. The Monetary Authority's Ensemble project will explore interbank tokenized deposit settlements.

Why It Matters:

Hong Kong is building a comprehensive ecosystem for digital assets through a unified regulatory framework and tax incentives, focusing on reshaping financial infrastructure and emphasizing the substantial benefits of digital assets to the real economy rather than speculation.

Bank for International Settlements: Stablecoins Fail Three Key Tests

Key Points Overview:

• A BIS report indicates that stablecoins have failed three key tests for the monetary system: singularity, resilience, and integrity, suggesting they cannot become pillars of future monetary systems;
• The report argues that while stablecoins possess programmability, pseudo-anonymity, and low-cost advantages, they could undermine national currency sovereignty through "covert dollarization" and facilitate illegal activities;
• The stock price of USDC issuer Circle fell 15% in response to the report, having previously risen from an IPO price of $32 to $299, an increase of over 600%.

Why It Matters:

Central bank representative institutions deny the status of stablecoins but affirm the transformative potential of tokenizing traditional financial assets, hinting at future regulatory directions and policy attitudes.

Russian Ruble Stablecoin A7A5 Achieves $9.3 Billion in Trading Volume in Four Months, Suspected of Evasion of Sanctions

Key Points Overview:

• An investigation by the Financial Times revealed that the ruble-pegged stablecoin A7A5, launched by a Moldovan oligarch and the sanctioned Russian Defense Bank, has reached a trading volume of $9.3 billion since its February launch;
• A7A5 claims to be backed by rubles held by Moscow's Promsvyazbank (a defense bank under US, UK, and EU sanctions), with tokens worth $156 million currently in circulation;
• The company behind the stablecoin, A7, is controlled by fugitive Moldovan businessman Ilan Șor, who has been sanctioned by the UK, and research institutions have found links to Russian overseas political influence activities.

Why It Matters:

Russia is actively developing cryptocurrency channels to evade Western sanctions, creating a cross-border payment alternative system through self-made stablecoins and independent exchanges, avoiding mainstream stablecoins like USDT that are subject to Western regulation.

Macro Trends

Ondo CEO: Stablecoins Are Just the Tip of the Iceberg, Tokenization of Physical Assets is Maturing

Key Points Overview:

• Ondo Finance CEO Nathan Allman stated that Circle's successful IPO and the passage of the GENIUS Act have sparked a new wave in the blockchain space, with stablecoins being just the "tip of the iceberg" in the wave of tokenization of physical assets;
• Ondo plans to launch a tokenization platform next month that will allow applications and wallets to provide on-chain access to publicly traded US stocks, bonds, and ETFs, similar to how BlackRock and Franklin Templeton have already provided tokenized treasury services;
• Allman predicts that "the vast majority of regulated financial assets will settle on blockchain tracks in the future," but believes that publicly traded liquid securities are the "low-hanging fruit" for tokenization, while tokenization in the private market will take time to mature.

Why It Matters

With Circle's stock price rising about 70% in a week to an opening price of $250, the market for tokenized assets is heating up. Allman points out that while tokenization of private markets like loans has enormous potential, significant automation, digitization, and documentation standardization work is needed before tokenization becomes a limiting factor for widespread adoption. Companies like BlackRock and Apollo Global Management are working to create more liquidity for private asset classes, which will help the field achieve broader tokenization applications in the future. Allman emphasizes that tokenization itself does not make illiquid assets liquid, revealing that while the tokenization of physical assets has broad prospects, it still faces practical challenges, with the market starting from more liquid assets and gradually expanding to private markets.

The Real-Time Liquid Economy Has Arrived, Stablecoins Will Unlock Trillions in Capital to Reshape Business Models

Key Points Overview:

• US dollar stablecoins have reached 1% of the US money supply (M2), growing at an annual rate of 55%, and could reach 10% of M1 within a decade;
• Services on the blockchain are beginning to resemble standard banking services but are faster and cheaper, allowing businesses to adjust their fund management frequency from every two weeks to every 6 hours;
• The real-time financial liquidity model will change the way businesses manage cash: global cash holdings can be significantly reduced, employees can receive daily wages based on actual work hours, and utility companies can bill daily instead of monthly.

Why It Matters

Paul Brody, global blockchain leader at Ernst & Young, points out that as the cost of cross-border fund transfers approaches zero and is nearly instantaneous, businesses can significantly reduce local cash buffers. US companies currently hold about $2 trillion in cash and $2.8 trillion in working capital loans, and shifting to a financial liquidity model could unlock trillions in capital for new investments. With trading costs on Ethereum's Layer 2 networks routinely below $0.01, the weekly savings from "floating capital" valued at about $0.01 makes more frequent fund management economically viable. This shift will not only eliminate inefficiencies such as the 60-day delays in payroll loan agencies and utility bills but will also change behavior through instant rewards, creating more effective incentive mechanisms. Just as we evolved from purchasing music to downloading to streaming, the payment sector will also undergo a revolutionary transformation from "cost reduction" to "speed enhancement" to "reconstruction."

Bloomberg: Hong Kong Stablecoins May Be Pegged to Real Assets Like Real Estate in the Future

Key Points Overview

• Bloomberg Industry Research released a report analyzing the potential of the Hong Kong stablecoin market, noting that stablecoins pegged to the Hong Kong dollar will still be influenced by the HKD-USD peg mechanism;
• Analysts believe that during potential adjustments to the peg mechanism, even if the stablecoin's face value remains stable, the underlying supporting assets may need to be revalued;
• The report predicts that future stablecoins in Hong Kong are likely to be pegged to real-world assets (RWA) like real estate, rather than relying solely on fiat currency reserves.

Why It Matters

As an international financial center, the linkage of stablecoins to real assets will create new value circulation methods. A large and tokenizable reserve of quality assets could drive the widespread adoption of Hong Kong stablecoins while releasing liquidity from high-value assets like Hong Kong real estate. This trend aligns with the global wave of physical asset tokenization and reflects Hong Kong's foresight in exploring innovative financial products. As Hong Kong continues to advance its virtual asset regulatory framework, asset-backed stablecoins may become an important bridge connecting traditional finance with the digital economy, providing new momentum for Hong Kong to solidify its position as a crypto financial hub in Asia.

Paxos Strategic Executive: Surge in Demand for Stablecoin Infrastructure, Banking Sector Exploring Tokenized Deposits

Key Points Overview

• Paxos strategic executive Walter Hessert stated that demand for the company's stablecoin infrastructure has surged, with Mastercard joining the Global Dollar Network as a reflection of this trend;
• Traditional financial institutions are actively exploring how to utilize stablecoin payment rails, particularly valuing their "extremely low cost and almost free" characteristics while seeking technological tools to meet compliance requirements;
• Paxos has issued $150 billion in stablecoins, and interest in deposit tokenization within the banking sector is growing, especially after the Senate passed the GENIUS Act, with banks focusing more on the interaction between deposit tokenization and stablecoins.

Why It Matters

Traditional financial institutions are beginning to recognize the necessity of stablecoins and are actively seeking ways to participate. Although the GENIUS Act does not support yield-generating stablecoins, banks' interest in tokenized deposits is increasing. Paxos's Global Dollar Network provides businesses with opportunities for "shared ownership and the sharing economy," helping institutions explore product-market fit, which gives it a differentiated advantage in competing with Circle's USDC. Mastercard's entry into the Global Dollar Network indicates that the payment giant supports regulatory stablecoin issuers globally, while Paxos, as a behind-the-scenes technology provider, is helping bring these innovations to market. The current stablecoin model has not fully met market demand, and financial institutions are seeking solutions that combine stablecoin payments with traditional wire transfers or real-time payment systems.

Tether CEO: Trillions of AI Agents Will Trade Using Bitcoin and USDT

Key Points Overview:

• Paolo Ardoino predicts that within 15 years, one trillion AI agents will use blockchain assets to settle transactions, believing that traditional financial institutions like JPMorgan will not open accounts for AI agents;
• Tether has entered the AI field, launching wallet development kits (WDK), Tether Data, and the Tether AI platform to build self-custody wallet infrastructure;
• USDT currently holds over half of the global $243 billion stablecoin market share, reaching $155 billion. The US Treasury Secretary stated that clear stablecoin regulations could push the industry's value to over $2 trillion by 2028.

Why It Matters:

The rise of the AI agent economy could provide new application scenarios for cryptocurrencies, reshaping the payment infrastructure for machine-to-machine business ecosystems.

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