Welcome to the 20th issue of the "Stablecoin Weekly".

This week's main theme can be summed up in one phrase — the battle of stablecoins.

There are several battlefronts:

First is the counterattack from banks. As stablecoins accelerate their penetration into the banking system, banks are fiercely defending their deposit base while attempting to monetize access to user financial data, creating a new "moat" around their services.

Another front is with the Fintech giant Stripe. Following its backend integration (acquisition of Bridge) and strengthening of frontend distribution (acquisition of Privy), Stripe is now directly building its own Layer 1 blockchain from scratch. This has sparked debates over centralization versus decentralization and challenged the narrative that "TradFi transactions will occur on Ethereum." However, from a competitive landscape perspective, Stripe is truly targeting the markets of Visa and SWIFT — effectively capturing market share in payment networks.

Optimistically, this remains a positive incremental development for the crypto industry. After all, this is a market worth hundreds of billions of dollars, and with each additional on-chain user, the entire crypto ecosystem gains more market value support.

Market Overview and Growth Highlights

The total market capitalization of stablecoins has reached $273.463 billion, with a week-on-week increase of $3.759 billion. In terms of market share, USDT continues to dominate with a 60.43% share; USDC ranks second with a market cap of $66.793 billion, accounting for 24.42%.

Blockchain Network Distribution

Top Three Networks by Stablecoin Market Cap:

1. Ethereum: $138.595 billion
2. Tron: $82.891 billion
3. Solana: $12.091 billion

Top 3 Fastest Growing Networks This Week:

1. StarkNet: +60.40% (USDC share 91.91%)
2. XRPL: +24.88% (RLUSD share 51.25%)
3. Hyperliquid L1: +17.59% (USDC share 95.61%)

Data from DefiLlama

Under the Impact of Stablecoins, the Data and Deposit Battle Between Banks and the Crypto Industry

As stablecoins accelerate their penetration into the banking system, the competition between banks and fintechs has escalated from "cooperation" or "confrontation" to a systematic game involving data, funds, and regulation.

In the data domain, open banking is becoming a new front of conflict. In July, JPMorgan announced plans to charge high data access fees to data aggregators like Plaid, explicitly stating that if clients do not accept the new fee agreement, their account information would "no longer be accessible." This is seen as a pressure tactic to force fintech companies to accept new commercial terms. Meanwhile, JPMorgan has also suspended the re-entry of the crypto exchange Gemini, which its co-founder referred to as "Operation ChokePoint 2.0."

This series of actions indicates that large banks are attempting to reshape industry rules by increasing the cost of data access, with API blocking serving as the ultimate bargaining chip. Executives from fintech and crypto companies like Klarna, Robinhood, and Gemini have jointly written to the Trump administration, urging the prevention of such fee models to avoid hindering market competition and the mainstream adoption of the crypto industry.

Another battle revolves around the "deposit defense war" concerning interest on stablecoins. The banking lobby group BPI is pushing for legislation to close loopholes that allow exchanges and affiliated companies to distribute yields, directly naming models like Coinbase and PayPal, arguing that yield-bearing stablecoins could siphon off trillions of dollars in deposits during economic downturns, impacting credit creation and financing costs. Banks are attempting to lock in funding pools through legislation, while crypto platforms are retaining yield mechanisms within compliance frameworks to enhance the attractiveness of stablecoins and compete for deposit alternatives. Under the U.S. stablecoin interest prohibition, yield-bearing stablecoins can still transmit underlying asset returns to users through financial engineering, challenging banks' control over value distribution and customer relationships.

The core of these two battles is the banks' use of their monopolistic resources in the traditional system — data and deposit bases — to build new entry barriers and limit the market space for emerging competitors. Regulation has become the main tool for both sides: banks are trying to shape moats through rules, while fintech and crypto companies are leveraging regulation to promote openness and de-monopolization.

If banks win the data battle, stablecoin companies will face higher operational costs; if banks dominate the funding battle, the yield competitiveness of stablecoins will be weakened. Regardless of the outcome, it will directly shape the competitive landscape between on-chain finance and traditional finance.

AI, Stablecoins, and Self-Built Chains: Stripe's Future Payment Blueprint

Another battle this week revolves around "payment blockchains," extending from the centralization versus decentralization debate to choices of underlying architecture. Stripe and Circle have both launched their own Layer 1 blockchains, directly challenging the Ethereum L2 solutions that have dominated mainstream narratives for years. Initially, it was expected that traditional financial giants would rely on L2 solutions like Rollup to access the crypto ecosystem, but now they are all choosing to build their own underlying networks, bypassing existing scaling routes and taking control of the foundations of transactions and settlements.

From an external perspective, this move appears to be a natural extension of the giants' pursuit of profit, but such an interpretation overlooks the deeper strategic logic behind it. Building their own blockchain is an inevitable step for Stripe in the dual waves of stablecoins and AI, upgrading from a payment channel to a data and intelligent service platform. Stablecoins are penetrating the banking, merchant, and consumer systems at an unprecedented speed, driving a reconstruction of payment and settlement architectures. Stripe has previously laid out stablecoin frontend and backend services (acquisitions of Privy and Bridge), and the launch of Tempo integrates issuance, distribution, and settlement, directly competing with SWIFT's cross-border settlement and Visa/Mastercard's card payment settlement systems.

The goal of launching Tempo is not merely to replace existing links but to provide Stripe's core customers — merchants — with on-chain payment infrastructure that balances performance, cost, and compliance. In a context where general public chains struggle to meet supply chain and cross-border settlement needs, Tempo can utilize permissioned systems and zero-knowledge proofs to achieve sub-second settlements and stable rates, bypassing external network rules while natively capturing full-link transaction data. This data can not only provide high-quality material for AI risk control and credit modeling but can also be transformed into value-added services, filling the profit gap left by the impact of stablecoins on traditional models.

From a higher dimension, Stripe's self-built chain aims to deeply integrate payment networks with data networks, upgrading payments from a low-margin basic function to a programmable enterprise operational infrastructure. Controlling the underlying links means being able to flexibly adjust performance and regulatory rules while combining on-chain settlements with AI value-added services, forming a closed-loop advantage in operations and data. This layout concerns not only cost efficiency but also the future ownership of business relationships and data dominance.

Despite external concerns about centralized "walled gardens," optimistically, this will bring more compliant capital and real users, migrating funds and businesses that were previously confined to the traditional financial system to crypto infrastructure. For Ethereum, this is not a zero-sum competition but an overall capacity expansion, providing more stable liquidity and asset foundations for native applications like DeFi.

Macro Trends

Global Stablecoin Regulation Divergence May Accelerate Industry Concentration

Key Takeaways

• The EU's MiCA, the U.S. GENIUS, and Hong Kong's stablecoin regulations differ significantly in terms of issuing entities, reserve requirements, and licensing systems;
• Different regulatory frameworks force issuers to establish parallel compliance systems, increasing costs and operational friction, making it difficult for small stablecoin companies to bear;
• Experts say regulatory fragmentation will concentrate market power in capital-rich large issuers, potentially driving global regulatory convergence in the long term.

Why It Matters

• In the short term, regulatory competition will continue, and stablecoins may be restricted to specific jurisdictions; long-term risks and the growth of cross-border transaction volumes will drive international coordination.

Bernstein: Coinbase is Growing into a Core Player in the Ethereum Ecosystem, Target Price $510

Key Takeaways

• ETH has risen 80% since June 5, driven by Circle's listing and the volume of stablecoin minting on Ethereum; Coinbase is generating ETH revenue through its L2 Base chain and staking business;
• Base processes over 9 million transactions daily, with an annualized revenue of about $75 million, becoming a major token issuance platform; Coinbase has integrated all Base tokens into its main exchange, enhancing ETH-denominated trading fee revenue;
• Coinbase holds approximately 136,800 ETH (worth $590 million) and has launched the Base App wallet to strengthen its ecosystem layout.

Why It Matters

• Coinbase benefits from multiple points in Ethereum's infrastructure, trading, and asset holdings, directly tying itself to the growth dividends of the ETH ecosystem.

Nobel Laureate Economist Simon Johnson: U.S. Loose Crypto Legislation May Trigger Stablecoin Runs and Systemic Risks

Key Takeaways

• Nobel laureate economist Simon Johnson criticizes the GENIUS Act and the CLARITY Act for overly catering to the interests of the crypto industry, weakening regulation and failing to effectively prevent stablecoin runs, capital, and liquidity risks;
• The legislation allows foreign issuers to hold high-risk assets denominated in non-U.S. dollars as reserves, which could trigger liquidity crises and market panic during dollar appreciation;
• Easing restrictions on conflicts of interest and self-dealing may recreate 1920s-style financial risks and increase the use of stablecoins in illegal transactions.

Why It Matters

• Loose regulation may push the U.S. towards becoming the "crypto capital," but it simultaneously lays the groundwork for financial panic and systemic collapse.

Regulatory Compliance

New Google Play Regulations Require Certain Crypto Wallets to Operate with Licenses, Excluding Non-Custodial Wallets

Key Takeaways

• Google Play will require crypto wallet applications to be licensed and comply with industry standards in 15+ regions, including the U.S. and Europe, starting October 29;

• In the U.S., developers must register as money service businesses or remittance companies; in the EU, they must register as crypto asset service providers (CASP);

• Google clarified that non-custodial wallets are not affected by the new regulations, which previously sparked controversy over the removal of crypto applications.

Why It Matters

• The new regulations may accelerate the compliance of custodial crypto wallets, strengthening KYC and anti-money laundering measures.

"Token Launch Roth IRA" Allows Crypto Founders to Include Pre-Release Tokens in Tax-Exempt Accounts

Key Takeaways

• Startup AnchorZero has launched a program that allows crypto founders to deposit pre-release tokens into a Roth IRA, achieving tax-free appreciation;

• The mechanism relies on Anchorage Digital Bank for custody, similar to Peter Thiel's early practice of placing PayPal equity into an IRA;

• Critics argue that this scheme exacerbates tax inequity and deepens the public's negative perception of the crypto industry as one where "insiders profit."

Why It Matters

• While legal, this highly controversial mechanism may attract regulatory scrutiny and damage the fairness and image of the crypto industry.

SEC Commissioner Hester Peirce Rarely Defends Privacy Technologies, Echoing Cypherpunk Ideals

Key Takeaways

• Peirce referenced Eric Hughes, author of the "Cypherpunk Manifesto," in her speech, supporting anonymous technologies such as crypto mixers, privacy chains, and decentralized physical networks;

• She criticized the "third-party principle" that grants the government the power to obtain bank data without a warrant, arguing that bank records should enjoy the same privacy protections as the Fourth Amendment;

• Peirce acknowledged that privacy tools, even if potentially used for illegal purposes, should be allowed to reduce reliance on third-party information.

Why It Matters

• As a senior figure in U.S. financial regulation, Peirce's position aligns closely with the core privacy values of the crypto community, which may influence future policies and regulatory attitudes.

a16z and DeFi Education Fund Urge SEC to Establish Safe Harbor for NFT and DeFi Applications

Key Takeaways

• a16z and the DeFi Education Fund wrote to SEC Commissioner Hester Peirce, suggesting exemptions from broker registration requirements for NFT and DeFi applications that do not involve high risks;

• The letter states that a safe harbor could provide regulatory clarity, retain the SEC's authority to oversee high-risk activities, and allow developers to build fearlessly in the U.S.;

• Previously, a16z had proposed a safe harbor for NFTs to the SEC and suggested establishing similar mechanisms for airdrops and network tokens.

Why It Matters

• If adopted, the safe harbor would lower compliance barriers and reduce the risk of misapplying traditional securities laws to innovative applications.

Paxos Reapplies for U.S. National Trust Bank License to Comply with Stablecoin Regulations

Key Takeaways

• Paxos, the issuer of PayPal's PYUSD, is applying to convert its New York limited-purpose trust license into a U.S. national trust bank license, subjecting it to OCC regulation;

• If approved, it could hold customer assets and settle payments nationwide but would not be able to accept deposits or issue loans;

• This move follows the implementation of the stablecoin legislation under the GENIUS Act, with similar institutions like Ripple and Circle also submitting license applications recently.

Why It Matters

• A federal license would help stablecoin issuers enhance compliance and build trust with institutional clients.

Hong Kong Securities and Futures Commission Releases Robust Custody Standards for Virtual Assets to Enhance Client Asset Security

Key Takeaways

• The Hong Kong Securities and Futures Commission issued a circular to licensed virtual asset trading platforms, clarifying minimum standards for robust custody, covering executive responsibilities, cold wallet infrastructure, third-party wallet applications, and real-time threat monitoring;

• This initiative stems from recent overseas virtual asset custody breaches and insufficient monitoring issues identified in targeted local inspections in Hong Kong;

• The new standards will be incorporated into core regulatory requirements, promoting the adoption of more advanced custody technologies and establishing effective custody frameworks.

Why It Matters

• Strengthening custody and security standards can reduce the risk of security incidents on platforms, enhancing the compliance and international trust of Hong Kong's virtual asset market.

U.S. Sanctions Crypto Network Supporting Ruble Stablecoin A7A5 and Shut Down Exchange Garantex

Key Takeaways

• The U.S. Treasury sanctioned companies and executives related to the ruble stablecoin A7A5 and the now-shuttered exchange Garantex, accusing them of laundering ransomware proceeds and evading sanctions;

• Garantex had processed over $100 million in illegal transactions, and after its closure, its successor platform Grinex restored customer access to funds using A7A5, which has a daily trading volume of $1 billion;

• Sanctioned entities include issuer Old Vector, A7 LLC and its subsidiaries, as well as several Russian executives and their affiliated organizations, completely banning them from the U.S. dollar settlement system.

Why It Matters

• The U.S. is implementing a high-pressure crackdown on the Russian financial network that uses stablecoins and crypto exchanges to evade sanctions.

American Bank Policy Institute: Stablecoins Could Cause $6.6 Trillion Outflow from U.S. Bank Deposits

Key Takeaways

• The American Bank Policy Institute (BPI) released a report urging Congress to fix the loophole in the GENIUS Act that prohibits interest on stablecoins;

• The report cites Treasury data indicating that if the loophole is not addressed, stablecoins could lead to a $6.6 trillion outflow of bank deposits;

• BPI pointed out that exchanges and affiliated companies could circumvent the ban through "rewards," undermining regulatory effectiveness.

Why It Matters

• If the loophole is not closed, stablecoins will impact the bank deposit base and increase loan costs.

Fintech and Crypto Companies Jointly Urge Trump to Stop Banks from Charging Customer Data Access Fees

Key Takeaways

• CEOs from several fintech and crypto companies, including Klarna, Robinhood, Gemini, Kraken, PayPal, and Stripe, jointly wrote to Trump opposing large banks charging third parties for customer data access;

• JPMorgan has announced it will charge data aggregators, and PNC is considering similar measures; industry insiders claim this move will "stifle innovation" and force small financial tools to shut down;

• Industry organizations like FTA and the American Fintech Council participated in the joint letter, calling for the maintenance of an open financial ecosystem to prevent large banks from hindering competition.

Why It Matters

• Data access fees could weaken the competitiveness of open banking and open finance models, limiting the development space for emerging payment and crypto services.

Capital Layout

Tether and IDG Capital Lead $16 Million Financing for Cross-Border Payment Provider Transak

Key Takeaways

• Cross-border payment infrastructure company Transak has secured $16 million in strategic financing led by Tether and IDG Capital to expand its stablecoin payment network;

• The platform has processed over $2 billion in transactions, with approximately 30% coming from stablecoins, covering 75 countries and over 450 applications, serving more than 10 million users in fiat and stablecoin conversions;

• Transak holds multiple regulatory licenses and plans to expand into the Middle East, Latin America, and Southeast Asia markets.

Why It Matters

• Stablecoins are becoming the underlying network for global payments, with capital increasing compliance for cross-border infrastructure, accelerating deployment in emerging markets.

Coinbase Restarts Stablecoin Bootstrap Fund to Enhance DeFi Liquidity

Key Takeaways

• Coinbase is restarting the Stablecoin Bootstrap Fund through its subsidiary Coinbase Asset Management, with initial funds directed towards Aave, Morpho, Kamino, and Jupiter;

• The fund previously provided initial USDC liquidity to protocols like Uniswap, Compound, and dYdX in its first phase in 2019, and now USDC's annual on-chain trading volume has reached $2.7 trillion;

• The new fund aims to provide deeper stablecoin liquidity for both mature and emerging protocols and collaborate with early teams to promote stablecoin growth.

Why It Matters

• Direct funding from leading trading platforms could enhance the depth of the DeFi stablecoin market, accelerating the adoption of stablecoins in on-chain finance.

GPU-Collateralized Stablecoin Platform USD.AI Secures $13 Million in Funding

Key Takeaways

• The stablecoin lending protocol USD.AI has completed a $13 million Series A funding round led by Framework Ventures, with participation from Dragonfly, Arbitrum, and others;

• The platform uses GPU hardware as collateral to issue dollar-pegged loans to small and medium-sized AI companies, having attracted $50 million in deposits during its private testing phase;

• Plans to launch an ICO and gamified distribution model to further expand the market for the integration of AI and on-chain finance.

Why It Matters

• The combination of AI hardware and stablecoin credit opens up a new asset class beyond on-chain unsecured loans.

Market Adoption

Nuvei Launches Stablecoin Channel to Accelerate Cross-Border Payments in Emerging Markets

Key Takeaways

• Canadian payment company Nuvei, which serves over 200 markets, is now integrating stablecoin backends to enable same-day cross-border settlements;

• Utilizing a "stablecoin sandwich" model to bypass bottlenecks with correspondent banks, improving payment efficiency in underdeveloped regions;

• The new solution targets emerging markets with limited cross-border payment options and inadequate banking networks.

Why It Matters

• Stablecoin technology is becoming the infrastructure for cross-border settlements, improving payment scenarios that traditional banks struggle to cover.

Visa Doubles Down on Stablecoin Business, Targeting a Future $2 Trillion Market

Key Takeaways

• Visa's crypto head Cuy Sheffield is pushing to expand stablecoin settlements, collaborating with banks and fintechs, and considering the future issuance of its own stablecoin;

• Its stablecoin settlement service has supported operations seven days a week, with a cumulative settlement volume exceeding $200 million, with initial clients including BBVA and Rain;

• Collaborating with payment company Yellow Card in emerging markets like Africa to explore the application of stablecoins in cross-border transfers, liquidity management, and treasury operations.

Why It Matters

• As a global payment giant, Visa is expanding its market share through stablecoin operations, competing for dominance in payment infrastructure in emerging markets and on-chain finance.

Blue Origin Now Accepts Cryptocurrency and Stablecoin for Ticket Purchases

Key Takeaways

• Blue Origin has partnered with payment technology company Shift4 to support payments for New Shepard suborbital flight tickets using cryptocurrencies like BTC, ETH, SOL, USDT, and USDC;

• Users can make instant, secure payments directly through wallets like Coinbase and MetaMask;

• The new payment method supports global instant settlements in USD, operating around the clock to meet the diverse payment needs of the high-end travel market;

• New Shepard has already sent over 75 passengers to space beyond the Kármán line, and ticketing is now open for all upcoming commercial flights to accept crypto payments.

Why It Matters

• Opens the door to space tourism for high-net-worth crypto users, expanding Blue Origin's customer base while showcasing the potential of crypto payments in high-value transaction scenarios.

Spar Switzerland to Support Stablecoin and Crypto Payments in Over 300 Supermarkets

Key Takeaways

• Spar has partnered with Binance Pay and DFX.swiss to launch stablecoin and crypto payments in over 300 supermarkets across Switzerland, covering over 100 digital assets;

• Currently, 100 stores have been activated, with the remaining stores set to join in the coming months, offering instant settlements in Swiss francs;

• Merchants can save up to two-thirds on card processing fees, with over 1,000 merchants in Switzerland already supporting Bitcoin payments.

Why It Matters

• This marks Switzerland's first nationwide retail crypto payment implementation, potentially accelerating the adoption of digital currencies in everyday consumption scenarios.

Citi Plans to Enter Crypto Custody and Payments, Focusing on Stablecoin Assets

Key Takeaways

• Citibank is evaluating the launch of cryptocurrency custody and payment services, with the initial phase focusing on high-quality assets backed by stablecoins;

• Plans to include custody for crypto-related ETFs, benefiting from the advancement of Bitcoin, Ethereum spot ETFs, and stablecoin legislation;

• Citi has been actively investing in blockchain and tokenization, participating in 18 industry investments from 2020 to 2024.

Why It Matters

• The entry of large Wall Street banks will enhance the institutionalization and compliance of crypto asset custody and payments.

New Product Release

Coinbase Development Platform Adds "netUSDChange" Security Policy to Server Wallets

Key Takeaways

• The Coinbase Development Platform (CDP) has added the "netUSDChange" policy to its Server Wallets security suite;

• This feature calculates the total dollar value of a single transaction (covering native assets, ERC20, ERC721, ERC1155) and automatically intercepts or releases based on set thresholds;

• Price calculations are based on current market conditions, aimed at helping developers reduce capital exposure in high-risk transfers.

Why It Matters

• Provides more refined risk control tools for on-chain applications, helping enhance security for institutions and developers in large transactions.

Ethereum Wallet MetaMask to Launch Dollar Stablecoin

Key Takeaways

• Ethereum's leading wallet MetaMask plans to announce a dollar stablecoin, mUSD, this week, with a launch at the end of the month;

• The platform has over 30 million monthly active users and is collaborating with Stripe's Bridge and M^0 for issuance, with Blackstone providing custody and fund management;

• The stablecoin's yield will come from highly liquid assets like short-term U.S. Treasury bonds.

Why It Matters

• The issuance of a stablecoin by a leading wallet will accelerate the use and yield circulation of stablecoins within the Ethereum ecosystem.

Coinbase Partners with Mercuryo to Reduce MetaMask Users' USDC On-Chain Costs

Key Takeaways

• Coinbase has partnered with crypto payment platform Mercuryo to reduce the on-chain fees for MetaMask users' USDC on the Base network by about 50%;

• The discount applies to both new and existing users, with Base incubated by Coinbase; MetaMask is a mainstream Ethereum wallet;

• This move follows the announcement by USDC issuer Circle to build a stablecoin-native Layer 1 that uses USDC as Gas.

Why It Matters

• Lowering on-chain costs can promote the circulation of USDC within the Ethereum and Base ecosystems, solidifying Coinbase's position in the stablecoin competition.

Circle Launches Stablecoin-Native Chain Arc, Reports $4.82 Billion Net Loss in Q2

Key Takeaways

• Circle reported Q2 revenue of $658 million, with a net loss of $4.82 billion impacted by non-cash expenses related to its IPO;

• Launched the EVM-compatible Layer 1 blockchain Arc, using USDC as Gas, targeting applications in payments, foreign exchange, and capital markets;

• USDC's circulation increased by 90% year-on-year to $61.3 billion, with on-chain transaction volume reaching $5.9 trillion, and market share rising to 28%.

Why It Matters

• The self-developed chain can strengthen USDC's foundational position in payments and settlements, directly participating in the competition for stablecoin infrastructure.

Binance Partners with Spain's BBVA to Provide Off-Chain Custody Services

Key Takeaways

• Binance has partnered with Spain's third-largest bank, BBVA, to offer off-chain custody for clients, storing assets in U.S. Treasuries held by BBVA, which can be used as trading collateral;

• This arrangement isolates trading from funds, reducing counterparty risk associated with exchange failures;

• This move continues Binance's strategy of introducing third-party custody (such as Sygnum and FlowBank) in response to market concerns about fund security following the FTX incident.

Why It Matters

• Strengthening user asset isolation mechanisms helps enhance the compliance and market trust of exchanges.

Worldcoin Competitor Humanity Protocol Launches $1.1 Billion Valued Mainnet

Key Takeaways

• The decentralized identity network Humanity Protocol, based in Hong Kong, has launched its mainnet, valued at $1.1 billion, using zero-knowledge transmission layer security protocol (zkTLS) to connect Web2 certificates with Web3 services;

• zkTLS allows users to verify qualifications in travel, finance, education, etc., without disclosing underlying data, avoiding biometric privacy risks;

• Future expansions will include on-chain ticketing, decentralized governance, and platforms to prevent Sybil attacks.

Why It Matters

• Providing privacy-first identity verification infrastructure is expected to challenge Worldcoin's dominance in the decentralized identity and "proof of humanity" space.

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