Original Title: "Cobo Stablecoin Weekly NO.21 | The New Battlefield of Stablecoins: Global Compliance Race and Industry Distribution Duel"

This week, the competition in stablecoins has presented two clear fronts: the compliance race between countries and the struggle for distribution rights within the industry.

Globally, stablecoins are being integrated into financial infrastructure: China, Japan, and South Korea are accelerating the combination of local currencies and stablecoins, while U.S. regulation is more directly shifting towards empowerment. Federal Reserve Governor Waller specifically named "stablecoins, smart contracts, and AI" as the three pillars of payment innovation, warning that banks will be marginalized if they resist. Meanwhile, another Federal Reserve Governor, Bowman, called for the reduction of "reputational risk" barriers and even suggested that central bank personnel personally hold cryptocurrencies to gain practical experience, signaling that stablecoins have been incorporated into the U.S. dollar's strategic tools.

At the industry level, the focus has shifted from issuance to distribution. Circle is facing channel cost pressures, while the practices of Ripple, Bullish, and MetaMask demonstrate two paths: direct institutional connections and white-label distribution. The distribution network is becoming the winning chip in the second half of the stablecoin game.

Market Overview and Growth Highlights

The total market capitalization of stablecoins reached $277.866 billion, with a week-on-week increase of $2.771 billion. In terms of market structure, USDT continues to dominate with a share of 60.19%; USDC ranks second with a market cap of $67.456 billion, accounting for 24.28%.

Top Three Networks by Stablecoin Market Cap:

· Ethereum: $144.578 billion

· Tron: $82.416 billion

· BSC: $11.836 billion

Top 3 Fastest Growing Networks This Week:

· Movement: +79.71% (USDA share 64.46%)

· Ink: +27.52% (USDT share 92.95%)

· Algorand: +14.28% (USDC share 96.63%)

Data from DefiLlama

U.S.-China Race: Stablecoins as Strategic Leverage in Global Financial Order

Stablecoins are evolving from a marginal product of the crypto market to a strategic hub of international finance. This week, the synchronized acceleration between the U.S. and China clearly reveals this trend: the State Council of China is reviewing a new roadmap for the internationalization of the renminbi, with stablecoins listed as a core tool to compensate for the U.S. dollar's leading position in this area. Hong Kong has already implemented regulatory guidelines, while Shanghai is building an international operation center for the digital renminbi, and high-level discussions may promote the use of renminbi stablecoins for cross-border settlements under the Shanghai Cooperation Organization framework. This series of actions stems from the reality that the renminbi's share in SWIFT global payments has dropped to 2.88%, while the U.S. dollar's share is as high as 47.19%, and exporters' reliance on U.S. dollar stablecoins is increasing. In this context, renminbi stablecoins are seen as a supplementary tool to enhance the competitiveness of cross-border payments, and explorations by major Asian economies like Japan and South Korea also indicate that stablecoins are gradually being integrated into regional financial infrastructure design.

The U.S. is also undergoing a profound regulatory transformation. Federal Reserve Governors Christopher Waller and Michelle Bowman have both expressed their views: Waller stated at a blockchain seminar in Wyoming that stablecoins, smart contracts, and artificial intelligence are the three pillars of future payment innovation, emphasizing the strategic value of stablecoins in enhancing payment efficiency and consolidating the international status of the U.S. dollar. He warned that banks will be marginalized if they resist new technologies. Bowman further suggested reducing regulatory barriers caused by "reputational risk" and even allowing central bank personnel to hold crypto assets to gain practical experience.

This aligns with the compliance path established by the GENIUS Act, showing that the U.S. is reshaping its institutional advantages through regulatory openness. The minutes from a July FOMC meeting first recognized stablecoins as a systemic issue, acknowledging their value in payments and Treasury demand while also warning of their potential to weaken bank liabilities and monetary policy transmission. This is highly consistent with the banking industry's anxiety over deposit outflows, indicating that stablecoins have risen from an industry lobbying topic to a strategic risk consideration for central banks. In the future, the Federal Reserve is likely to strengthen transparency and risk monitoring while recognizing the efficiency and competitive value of stablecoins, aiming to rebuild a new balance between financial innovation and systemic stability.

In this context, the scaling prospects for stablecoins will be repriced. Standard Chartered predicts that by 2028, the global market cap of stablecoins could rise to $2 trillion, and if renminbi stablecoins can enter the international clearing network, they will become a key extension of the renminbi's internationalization. It is foreseeable that the U.S. and China are shaping the future digital currency order through different paths: the U.S. relies on legislation and regulatory friendliness to maintain institutional advantages, while China drives breakthroughs through policy and regional pilots. The strategic intersection of the two suggests that stablecoins will transcend the category of crypto tools and become a core variable in reshaping international financial governance and currency flow patterns.

The Second Half of Stablecoins: The Battle for Distribution

As compliance frameworks gradually take shape (U.S. GENIUS Act, Hong Kong stablecoin regulations), the standardization of the issuance phase is nearing completion, and the focus of industry competition is shifting to "distribution." Distribution is not only the interface between issuers and users but also the most expensive and most negotiable phase. Whether relying on exchanges, payment networks, or DeFi incentives, large-scale distribution incurs high channel costs.

Circle is a typical case. It must rely on channels like Coinbase to reach users, resulting in significant circulation but also incurring high sharing costs. In Q2 2025, Circle's interest income from USDC reserves is expected to be about $625 million, with more than half paid to Coinbase. With the addition of distributors like Binance, this structural dependency will only increase, putting continuous pressure on Circle's net income rate.

However, this week, two cases demonstrated another possibility. Ripple directly embedded RLUSD into Gemini's operating capital, while Bullish completed an IPO fundraising of $1.15 billion, with over 50% of the financing completed in stablecoin form. This type of "top-down" institutional distribution bypasses retail channels, placing stablecoins directly into corporate finance and capital markets, achieving higher distribution efficiency and creating long-term value scenarios—this is closer to the deep integration of stablecoins into the mainstream financial system than merely relying on payment or trading circulation.

As distribution capability becomes the core of competition, platforms that master users and channels will naturally extend to the issuance side. MetaMask's launch of mUSD is an example; by partnering with Stripe's Bridge, it outsources issuance, reserve management, and compliance, focusing instead on branding and user outreach. Users can not only deposit, exchange, and cross-chain with mUSD but also spend globally with the MetaMask Card. Wallets are upgrading from traffic entry points to "branded issuers," while Bridge plays the role of a "white-label issuer" behind the scenes in this case.

This model has the potential to reshape the stablecoin landscape, with a few licensed and technologically proficient companies responsible for issuance and compliance, while more platforms with brand and user relationships achieve "stablecoin as a service" (STaaS) through outsourcing. The future market may shift from a monopoly by a few giants to a coexistence of more medium-sized stablecoins, with true differentiation coming from distribution networks and brand value, rather than just reserve assets themselves.

Market Adoption

Gemini and Ripple Reach Credit Cooperation, Excess Over Initial Limit Will Be Settled in RLUSD Stablecoin

Key Points Overview

· Cryptocurrency exchange Gemini disclosed in its IPO prospectus that it has signed a $75 million credit line agreement with Ripple Labs, which can be expanded to $150 million upon meeting specific conditions;

· When borrowing exceeds the initial $75 million, Gemini can request loans in Ripple's U.S. dollar stablecoin RLUSD, making RLUSD a settlement option for major U.S. trading platforms;

· This credit agreement was signed on July 10 and is primarily used to finance credit card receivables; as of August 15, Gemini has not yet utilized this credit line.

Why It Matters

· This agreement marks a key shift of stablecoins from a payment medium to a credit infrastructure. By collaborating with a mainstream exchange that is about to go public, Ripple not only embeds RLUSD into Gemini's core business but also creates high-frequency, high-value application scenarios for its stablecoin, directly challenging the market positions of USDT and USDC. Following Trump's signing of the GENIUS Act, the crypto industry is accelerating its mainstreaming, and this strategic cooperation between financial institutions highlights the unique advantages of stablecoins as credit tools: immediacy, programmability, and globalization, injecting innovative vitality into traditional finance. Despite Gemini's net loss of $282.5 million in the first half of the year, this collaboration still demonstrates that stablecoins are becoming a key infrastructure connecting traditional finance and the crypto ecosystem.

Cryptocurrency Exchange Bullish Raises $1.15 Billion Through IPO, Over 50% of Fundraising Settled in Stablecoins

Key Points Overview

· Cryptocurrency exchange Bullish completed its IPO on August 14, with over 50% of the fundraising completed in stablecoin form, totaling $1.15 billion;

· This IPO used eight different stablecoins for settlement, primarily minted on the Solana network and hosted by Coinbase, achieving multi-currency and multi-region fundraising;

· In this IPO, traditional investment bank Jefferies transformed into a "crypto delivery agent," coordinating the minting and delivery of stablecoins, completing transactions in collaboration with stablecoin issuers like Circle and Paxos.

Why It Matters

· This signifies that stablecoins have become a key component of capital market infrastructure, directly challenging the traditional T+2 settlement model. Bullish's IPO integrates the strengths of high-performance public chains, compliant exchanges, and stablecoin issuers, showcasing the collaborative capabilities of the crypto ecosystem. As the GENIUS Act and other legislation provide a regulatory foundation for stablecoins, this innovative fundraising model suggests that the roles of traditional financial intermediaries are being redefined, and the core functions of capital markets may accelerate their migration on-chain.

MetaMask Expands Territory by Integrating TRON Blockchain, Accelerating Cross-Chain Development Strategy

Key Points Overview

· The world's largest self-custody wallet, MetaMask, announced a strategic partnership with TRON DAO, allowing users to directly access and use the TRON ecosystem;

· This is another cross-chain expansion for MetaMask following its integration with Solana and Sei; the team also announced earlier that it will add Bitcoin support in Q3 2025;

· TRON, as a major public chain for stablecoin payments, processes nearly 9 million transactions daily, settling over $22 billion in value, making it the largest blockchain network for USDT trading globally.

Why It Matters

· This marks a transformation for MetaMask from an Ethereum-native wallet to a true "Web3 gateway," enhancing user experience and market competitiveness by supporting both EVM and non-EVM chains. The widespread adoption of TRON in Asia, South America, Africa, and Europe presents global user growth opportunities for MetaMask, and the collaboration will strengthen blockchain ecosystem interoperability, driving the implementation of practical application scenarios. MetaMask currently has over 100 million annual active users and is considering issuing a native token; this integration with TRON is a key step in its cross-chain strategy, further solidifying its leadership position in the Web3 wallet market.

Velera Launches Digital Asset Lab, Betting on Stablecoins as a New Growth Point for Credit Unions

Key Points Overview

· Credit union service organization Velera has launched a digital asset lab aimed at helping credit unions seize opportunities in the stablecoin and digital asset space;

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

· The first platform partner is the digital asset banking network Metallicus, and both will explore how to leverage multifunctional blockchain infrastructure to provide secure and compliant solutions for U.S. credit unions.

Why It Matters

· Traditional financial institutions are rapidly entering the stablecoin space to avoid being outpaced by startups as they were during the fintech era. As stablecoins and tokenized assets gradually become mainstream, controlling their custody services equates to holding the keys to a new type of global currency vault. By strategically positioning themselves in custody services, banks and credit unions can establish toll booths in the multi-trillion-dollar blockchain transaction space while gaining design rights to new financial infrastructure. This move indicates a shift in the financial industry's recognition of stablecoins' potential from speculative assets to payment and storage tools, accelerating the integration of stablecoins into the traditional financial system.

Whop Launches PSP Payment Aggregation Platform, Rates Reduced to 2.7%, Supporting Global Banks and Stablecoin Settlements

Key Points Overview

· Whop announced its independence from Stripe, building a payment orchestration system that connects multiple PSPs (such as Adyen, Checkout.com) to achieve intelligent transaction routing, increasing authorization rates and reducing rates to 2.7% + 30 cents;

· Whop's GMV has reached an annualized run rate of $1.2 billion, serving 28,000 creators across 170+ countries, supporting crypto settlements like Bitcoin and stablecoins, allowing sales to begin without cumbersome KYC;

· Whop has completed $80 million in Series A and B funding, with a valuation of $800 million, backed by investors including Peter Thiel and Insight Partners, and is expanding from a digital product marketplace to a full-stack payment infrastructure provider.

Why It Matters

· Whop's payment system independence marks the acceleration of the "decoupling" trend in payment infrastructure. By building a payment orchestration layer, Whop can intelligently select the optimal payment route based on transaction type, country, and currency, freeing itself from reliance on a single provider. The availability of crypto payment options and simplified KYC processes provides a solution for underbanked regions to bypass traditional financial intermediaries, significantly lowering the barriers for global merchants to participate in the digital economy.

Regulatory Compliance

U.S. Establishes Unified Stablecoin Regulatory Framework, GENIUS Act Empowers Review Committee to Assess State Rules

Key Points Overview

· The U.S. Stablecoin Certification Review Committee has begun assessing whether state stablecoin frameworks are "substantially similar" to the federal issuance system, led by the Treasury Secretary and including the Federal Reserve Chair and FDIC Chair;

· The committee requires unanimous consent to approve state regulatory frameworks, which is a key step under the GENIUS Act to simplify state stablecoin regulation;

· Gavin Meyers, a financial services regulatory partner at Pierson Ferdinand LLP, stated that the act is expected to reduce the current regulatory chaos among states.

Why It Matters

· The U.S. is establishing a national unified regulatory standard by reviewing state stablecoin rules at the federal level. This development will provide clear compliance pathways for stablecoin issuers, reduce regulatory costs for multi-state operations, and minimize regulatory arbitrage risks. As the global stablecoin market rapidly grows, this regulatory coordination mechanism in the U.S. serves as a model for constructing global stablecoin regulatory frameworks, further promoting the compliant application of stablecoins in payments, cross-border trade, and other areas.

Tether and Circle Executives to Meet with South Korean Banking Giants, Strong Momentum for Stablecoin Development

Key Points Overview

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

· The discussions will focus on the distribution and usage potential of U.S. dollar stablecoins in South Korea, as well as the possibility of issuing locally supported won stablecoins;

· Despite differing positions on stablecoin regulation between the ruling and opposition parties in South Korea, the South Korean internet giant Kakao has registered a trademark for issuing won stablecoins, and the Bank of Korea is also considering linking deposit tokens with public blockchains.

Why It Matters

· This development signifies that global stablecoin giants are actively expanding into the Asian market, particularly in South Korea, which has historically imposed strict restrictions on foreign financial institutions. South Korea plans to launch a stablecoin legal framework in October this year, and collaboration between large financial institutions and stablecoin issuers will accelerate the development of the South Korean stablecoin ecosystem. Rajiv Sawhney, head of international portfolio management at Wave Digital Assets International, stated that a joint venture or collaboration between Circle or Tether and South Korean banks will help them maintain market share in the competition with local fintech companies issuing won stablecoins. This trend reflects the globalization of stablecoins as cross-border payment tools and the increasing acceptance of stablecoin technology by traditional financial institutions.

U.S. Crypto Market Structure Bill Faces Key Vote, Congressman Scott Says Outcome is Uncertain

Key Points Overview

· Senate Banking Committee Chairman Tim Scott stated that the upcoming crypto market structure bill may receive less Democratic support than the previously passed GENIUS stablecoin bill, with the most optimistic estimate being only 12-18 Democratic supporters;

· Scott pointed out that Senator Elizabeth Warren is a key force hindering Democratic members' support for the bill, warning that the bill would not only affect cryptocurrencies but also disrupt the entire U.S. financial regulatory system;

· Based on the current Senate seat distribution, the bill needs at least 7 Democrats to join all 53 Republicans to pass, and even the CLARITY bill already passed by the House faces the same challenge.

Why It Matters

This crypto market structure bill has far-reaching implications compared to the already signed GENIUS stablecoin bill, as it aims to create legal space for the crypto industry by amending financial regulations from the new policy era. Warren's strong opposition casts uncertainty on the bill's prospects, claiming it would provide a "highway" for traditional securities to escape SEC regulation, fundamentally overturning nearly a century of capital market regulatory framework. This legislative battle not only concerns the future of the crypto industry but also involves a fundamental debate about the U.S. financial regulatory system, representing another important battleground for the Trump administration's push for crypto-friendly policies.

Robinhood Enters Sports Prediction Market, Partners with Kalshi to Cover NFL and NCAA Events

Key Points Overview

· Robinhood announced a partnership with Kalshi through its derivatives division to launch a prediction market for U.S. professional and college football, allowing users to trade bets on game outcomes;

· The new service will be launched before the 2026 NFL and NCAA seasons, covering all NFL regular season games and football matches from NCAA's four major conferences and independent schools;

· After previously pausing the Super Bowl prediction market due to CFTC warnings, Robinhood deliberately avoids directly mentioning the NFL or NCAA this time, emphasizing that the service "is not endorsed by any professional or collegiate sports association."

Why It Matters

· This marks a shift of prediction markets from the crypto-native space to mainstream financial services, reflecting the trend of "financialization of content." The U.S. sports betting market has an annual betting volume exceeding $120 billion, becoming a key market for fintech companies to compete for. The core legal issue currently lies in the regulatory conflict between federal oversight (CFTC) and state-level gambling regulations, with platforms like Kalshi holding CFTC licenses to claim federal priority to bypass state restrictions. Although Nevada and New Jersey lost early lawsuits, recent victories in Maryland indicate that legal disputes are not yet resolved, and this regulatory arbitrage space will influence the development path of crypto prediction markets.

Global Banking Organizations Call for Revision of Basel Crypto Capital Standards

Key Points Overview

· Several global financial industry associations have jointly written to the Basel Committee on Banking Supervision (BCBS), requesting a reconsideration of the crypto asset risk exposure standard (SCO60) set to take effect in January 2026;

· Banking organizations argue that the current standard is overly conservative and punitive in its capital treatment of crypto assets, misaligning with actual risks, making it economically unfeasible for banks to participate in the crypto market;

· The financial industry emphasizes that its direct involvement can provide consumer protection and risk management, attaching a report highlighting the "transformative potential" of distributed ledger technology in capital markets.

Why It Matters

· As the Trump administration promotes legislation favorable to the crypto industry, global banks are actively positioning themselves in custody, trading, and stablecoin issuance, making crypto assets an undeniable part of traditional finance. The banking industry's proactive lobbying for rule changes indicates that it is no longer passively accepting regulation but is actively seeking to participate in the crypto market in a profitable environment. The BCBS standards were established during the turbulent market period of 2022 and do not align with current industry developments; this regulatory dispute will profoundly impact the integration process between crypto and traditional finance, revealing the ongoing interplay between regulation, risk, and commercial interests.

Wyoming Launches First State-Supported Multi-Chain Stablecoin FRNT

Key Points Overview

· The Wyoming Stablecoin Committee has officially launched the first state government-supported stablecoin, Frontier Stable Token (FRNT), making it the first state in the U.S. to issue a blockchain-based, fiat-pegged token;

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

· This stablecoin is over-collateralized with cash and short-term U.S. Treasury securities, holding at least 102% reserves to ensure stability, and will initially be available for purchase through Kraken (Solana) and Rain's Visa integrated card platform (Avalanche).

Why It Matters

· Wyoming has long been a leader in crypto regulation, and this stablecoin issuance follows closely after Trump signed the federal stablecoin law, further solidifying the state's position in digital financial innovation. With the total supply of U.S. dollar stablecoins reaching $265 billion, the state-issued regulatory-friendly stablecoin will provide more options for retail and business users while attracting more blockchain-related activities to the regional economy. This also sets a template for other states and local governments to issue stablecoins, potentially sparking broader government digital currency experiments.

U.S. Treasury Seeks Public Input on Anti-Money Laundering Measures for Digital Assets

Key Points Overview

· The U.S. Treasury announced on Monday that it is seeking public input on "innovative methods to detect illegal activities involving digital assets" to implement the requirements of the GENIUS stablecoin act signed by President Trump last month;

· The Treasury is requesting suggestions on the application of API interfaces, artificial intelligence, digital identity verification, and blockchain technology in the field of anti-money laundering, with a deadline for comments set for October 17;

· Treasury Secretary Scott Bessent stated that stablecoins will expand access to the U.S. dollar for billions globally and increase demand for U.S. Treasury securities, calling it a "win-win-win situation for users, issuers, and the U.S. Treasury."

Why It Matters

· With the GENIUS Act establishing a federal regulatory framework for stablecoins, regulators are turning to address anti-money laundering compliance challenges. Banking associations are concerned that the act's restrictions on interest payments for stablecoins may be circumvented by exchanges and brokers, leading to significant deposits flowing into the stablecoin market. This consultation process will influence the future formulation of stablecoin regulatory rules, and the Treasury's findings submitted to Congress may drive a new round of rule-making, profoundly impacting compliance requirements and development directions for the stablecoin industry.

Tether Appoints Former White House Crypto Council Executive Director Bo Hines as Strategic Advisor

Key Points Overview

· Tether announced the appointment of former Executive Director of the White House Crypto Council Bo Hines as a digital asset and U.S. strategic advisor, effective immediately;

· Bo Hines will lead Tether's strategic planning for entering the U.S. market, establishing relationships with policymakers and industry stakeholders, and reinforcing Tether's investment commitments in the U.S.;

· As the Executive Director of the White House Crypto Council, Hines led interagency working groups to develop a regulatory framework for stablecoins and promote the secure integration of blockchain technology with the U.S. financial system.

Why It Matters

· This appointment marks the official launch of the U.S. market strategy for the world's largest stablecoin issuer and reflects the increasingly common "revolving door" phenomenon between the crypto industry and political elites. With the Trump administration's supportive stance on crypto innovation, Tether's recruitment of a former White House official may help it secure a more favorable regulatory environment in the U.S. Tether has stated that it has invested nearly $5 billion in the U.S. ecosystem, and this personnel appointment may signal an increased focus on infrastructure in the U.S., further altering the influence of stablecoins in the global payment system.

Federal Reserve Announces Termination of Emerging Activities Supervision Program, Returning to Regular Regulatory Processes

Key Points Overview

· The Federal Reserve previously established the "Novel Activities Supervision Program," focusing on regulating banks' emerging business areas in crypto assets, distributed ledger technology (DLT), and complex technology collaborations with non-banks;

· The program covered four key areas: technology-driven collaborations with non-banks, crypto asset-related activities, DLT projects with potential systemic impact, and providing central banking services to crypto enterprises and fintech companies;

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

Why It Matters

· This move signifies a significant shift in the Federal Reserve's approach to regulating crypto and fintech, returning from special regulation to mainstream regulatory frameworks, possibly reflecting the regulators' belief that these businesses have matured. This will simplify the compliance burden for banks participating in crypto and DLT innovations, encouraging more traditional financial institutions to explore digital asset services, promoting financial innovation and inclusivity while maintaining appropriate oversight of risks. This policy change may indicate that the U.S. regulatory environment is evolving towards a more open yet cautious direction.

CMB International Securities Officially Launches Virtual Asset Trading Services, Offering Bitcoin, Ethereum, and More

Key Points Overview

· CMB International Securities announced on August 18 that it has officially begun offering virtual asset trading services, with its mobile app now featuring virtual asset trading capabilities, providing qualified investors with 24/7 trading services;

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

· The company is the first Chinese-funded bank-affiliated brokerage in Hong Kong to obtain a license for virtual asset trading services, and it plans to gradually expand its trading range and functionalities within a compliant framework.

Why It Matters

· This marks a milestone for Chinese financial institutions officially entering the crypto asset space, reflecting the increasingly mature regulatory framework for virtual assets in Hong Kong. As the first licensed Chinese bank-affiliated brokerage, CMB International's entry will provide institutional investors with a more regulated and secure channel for crypto asset trading, potentially attracting more traditional financial capital into the digital asset market while reinforcing Hong Kong's position as a crypto financial hub in Asia.

South Korean Financial Regulator to Submit Stablecoin Regulatory Bill in October

Key Points Overview

· According to South Korean media MoneyToday, the Financial Services Commission (FSC) plans to submit a stablecoin regulatory bill to the National Assembly in October, which will be included in the second digital asset legal framework being developed in South Korea;

· The bill will establish regulations for stablecoin issuance requirements, collateral management, and internal risk control systems, aligning with new President Lee Jae-myung's commitment to establishing a local currency-pegged stablecoin market;

· The four major banks in South Korea (Kookmin, Woori, Shinhan, and Hana Bank) plan to meet next week with Circle President Heath Tarbert to discuss stablecoin-related matters.

Why It Matters

· This move signifies that major Asian economies are accelerating the construction of stablecoin regulatory frameworks, forming a global network of stablecoin regulation alongside the U.S., Japan, and other countries. South Korea's push for domestic currency stablecoin development reflects strategic considerations for digital financial sovereignty, aiming to counter the challenge posed by Trump’s efforts to strengthen the global dominance of the U.S. dollar through stablecoins. As regulatory clarity around stablecoins increases in the Asian market, it will provide a clearer legal environment for cross-border payments and financial innovation while offering more certainty for institutional investors' participation.

Japan Approves First Yen-Pegged Stablecoin JPYC, Plans to Issue $7 Billion in Three Years

Key Points Overview

· The Financial Services Agency (FSA) of Japan is expected to approve the issuance of the first yen-pegged stablecoin by fintech company JPYC as early as this fall, which will be available for sale within weeks after registering as a money transfer business this month;

· JPYC will be fully backed by highly liquid assets such as deposits and government bonds, maintaining a 1:1 peg with the yen;

· The plan is to issue 1 trillion yen (approximately $6.81 billion) within three years, attracting interest from hedge funds, wealth management institutions, and covering uses such as arbitrage trading, cross-border remittances, and DeFi.

Why It Matters

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

Coinbase, DCG, and Other Crypto Giants Form "American Innovation Project" Educational Nonprofit Organization

Key Points Overview

· Coinbase, DCG, Kraken, Paradigm, and other crypto industry giants have jointly established the "American Innovation Project" (AIP), operating as a 501(c)(3) nonprofit organization to enjoy tax-exempt status;

· AIP is led by DCG's Senior Vice President of Policy Julie Stitzel and will engage directly with congressional members and their staff to provide education on cryptocurrencies and decentralized technologies, but legally cannot "make influencing legislation a primary part of its activities";

· Board members include influential industry policy figures such as Kristin Smith, Chair of the Solana Policy Institute, Allie Page, COO of the Blockchain Association, and Nick Carr, Policy Strategist at Coinbase.

Why It Matters

· This reflects a strategic shift in the crypto industry towards more diversified methods of influencing policy-making. By choosing the 501(c)(3) nonprofit model instead of traditional lobbying organizations, these companies can maintain political influence while avoiding certain legal restrictions and tax burdens. The establishment of this organization comes at a time when the regulatory environment for crypto is becoming increasingly complex, demonstrating that industry leaders are seeking to strike a balance between education and lobbying to create favorable conditions for shaping the future regulatory landscape.

Capital Layout

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

Key Points Overview

· Loop Crypto has completed a new round of strategic financing led by Fabric Ventures and VanEck, with Helius and Plug and Play participating for the first time, and existing investors like a16z crypto continuing to support, bringing total financing to over $6 million;

· Data shows that Loop's platform transaction volume in Q2 2025 increased by 344% year-on-year, with stablecoin transactions accounting for 98% of all transactions and 94% of total payments, helping merchants cover customers in over 120 countries;

· The platform supports traditional payment features such as authorized storage of payment methods, recurring payments, and usage-based billing, while also offering advantages like minute-level payment collection, integration completed within days, and instant settlement in fiat/stablecoins.

Why It Matters

· The financing and explosive growth of Loop Crypto validate that stablecoins are becoming the new infrastructure for global payments. The platform serves not only direct merchants but also empowers billing platforms like OpenPay through APIs, creating a network effect in the payment ecosystem. Data shows that merchants accepting cryptocurrency payments cover twice as many countries as those that only accept fiat payments, indicating that stablecoins are addressing global business pain points such as high foreign exchange fees, multiple payment processor integrations, and long settlement times. The continued investment from top-tier institutions reflects strong market expectations for the growth of stablecoin payments, signaling that crypto payment infrastructure is accelerating its integration into mainstream business systems.

PayPal and Coinbase Ventures Jointly Invest in Mesh, Total Financing Exceeds $130 Million

Key Points Overview

· Crypto payment infrastructure company Mesh has received a new round of investment from institutions including PayPal Ventures and Coinbase Ventures, bringing its total financing to over $130 million;

· This round of financing comes just five months after Mesh's $82 million Series B funding led by Paradigm in March of this year, with the specific amount undisclosed but at least $10 million, some of which is settled in PYUSD stablecoin;

· Mesh's "SmartFunding orchestration engine" addresses asset mismatch issues in crypto payments, allowing users to pay with over 100 cryptocurrencies, while merchants settle instantly in stablecoins or fiat.

Why It Matters

· Traditional payment giants and crypto companies are accelerating the integration of payment infrastructure. As the technology provider for PayPal's "Pay with Crypto" service, Mesh has integrated with major exchanges like Coinbase and Binance, covering hundreds of millions of users. The continued investment from several well-known institutions indicates a positive market outlook for the integration of crypto payments with traditional payment systems, positioning Mesh to play a role similar to that of Visa and Mastercard in the card payment sector in building a global crypto payment network.

Circle Acquires Consensus Engine Malachite to Support Upcoming Arc Stablecoin Blockchain

Key Points Overview

· USDC stablecoin issuer Circle has acquired the consensus engine Malachite developed by Informal Systems, which will be used to support its newly announced Arc blockchain focused on stablecoin finance;

· The acquisition includes the underlying technology and intellectual property of Malachite, with nine employees from Informal Systems joining the Circle team, though the specific transaction amount has not been disclosed;

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

Why It Matters

· This acquisition marks a significant step for Circle, the USDC issuer with a total market capitalization of $65 billion, towards building its own blockchain infrastructure, reflecting a strategic shift from relying on third-party platforms to constructing a proprietary ecosystem. As the stablecoin market is expected to grow to a trillion-dollar scale and reshape cross-border payments, Circle can gain greater autonomy, lower transaction costs, and higher scalability through the Arc blockchain. This initiative could accelerate the mainstream adoption of stablecoins in the global financial system and promote further integration of traditional payments with blockchain technology.

New Product Launch

MetaMask Joins Stablecoin Competition, Set to Issue mUSD Stablecoin

Key Points Overview

· MetaMask has confirmed that it will launch its own dollar stablecoin, mUSD, this year, initially issuing it on Ethereum and the Layer 2 network Linea developed by Consensys;

· mUSD will be issued by Bridge, a U.S. licensed issuer under Stripe, based on the blockchain infrastructure of the M0 platform, allowing users to spend globally at Mastercard merchants through the MetaMask Card;

· The collaboration between Bridge and M0 provides customized stablecoin solutions for enterprises, reducing development time from "over a year of complex integration" to "a few weeks," with MetaMask being the first case.

Why It Matters

· This move signifies that the stablecoin market is shifting from being merely a trading tool to a core component of application ecosystems. With the GENIUS Act providing regulatory clarity, the use of dedicated stablecoins is becoming a new trend. MetaMask, as a mainstream crypto wallet with tens of millions of users, entering the competition will significantly expand the penetration of stablecoins in payment and everyday use scenarios. Through the partnership model of Bridge and M0, more applications can launch their own stablecoins without dealing with complex compliance and technical issues, accelerating the diversification and popularization of the stablecoin ecosystem and promoting the adoption of digital dollars globally.

Circle Launches Cross-Chain USDC Settlement Service Gateway Supporting 7 Major Blockchains

Key Points Overview

· Circle has officially launched the Gateway cross-chain service, enabling instant access to a unified USDC balance across multiple chains within 500 milliseconds, currently supporting Arbitrum, Avalanche, Base, Ethereum, Optimism, Polygon, and Unichain;

· Gateway serves multi-chain users without requiring idle funds, allowing exchanges to withdraw USDC without bridging infrastructure, and custodians to provide seamless cross-chain access for clients;

· Several partners have already integrated, including Dfns and Enclave, with plans to expand to the ARC network and more blockchains in the future.

Why It Matters

· Circle Gateway serves as a unified solution for cross-chain liquidity, breaking through traditional bridging delays and capital efficiency limitations, providing a simplified USDC usage experience for payment providers, exchanges, and wallets. Through a unified balance system, users can achieve cross-chain asset transfers in milliseconds, significantly reducing cross-chain costs, improving capital efficiency, and promoting USDC's dominant position in the multi-chain ecosystem, providing seamless infrastructure support for DeFi and payment applications.

Reown Partners with Payy to Create Seamless On-Chain Privacy Banking Services, Simplifying Crypto Payment Experience

Key Points Overview

· "Financial Internet Connection Layer" Reown has partnered with on-chain privacy bank Payy to jointly address the technical friction issues in crypto payments;

· Reown will provide Payy with multi-chain support, smart wallet connections, and automatic token exchange features, allowing users to choose their preferred blockchain and pay directly with USDC;

· Payy, developed by Polybase Labs founded by former Apple iOS engineer Sid Gandhi, integrates stablecoins, privacy chains, and fiat deposit and withdrawal channels, and has previously launched a privacy-protecting crypto Visa card.

Why It Matters

· This collaboration demonstrates that crypto payment infrastructure is moving towards specialized division of labor. Reown focuses on providing payment orchestration services, while Payy specializes in privacy banking on-chain. Such modular collaborations accelerate industry innovation, making the stablecoin payment experience closer to the convenience of traditional finance while retaining the privacy and security advantages of blockchain.

Visa and Wirex Enable Real-Time Settlement System for EURC Euro Stablecoin

Key Points Overview

· Visa and crypto payment company Wirex have achieved real-time settlement using the EURC euro stablecoin issued by Circle in Europe, marking the first practical application of EURC in a production environment;

· This deployment follows Visa's integration of EURC into its settlement platform last month, marking a commercial breakthrough for non-U.S. dollar stablecoins in large payment networks;

· This move brings more efficient cross-border transaction processing capabilities to the European payment market, reducing settlement times and costs, and providing merchants with more convenient euro-denominated payment options.

Why It Matters

This deployment marks a substantial advancement in the global payment sector's trend towards de-dollarization. With the EURC stablecoin gaining recognition from payment giants like Visa, the euro stablecoin is expected to achieve broader adoption in Europe and globally. This not only enhances the euro's competitiveness in the digital payment space but also provides European businesses with a localized alternative to U.S. dollar stablecoins, potentially driving the development and application of more regional stablecoins.

SoFi Partners with Lightspark to Launch International Remittance Service Based on Bitcoin Lightning Network

Key Points Overview

· U.S. digital bank SoFi has announced a partnership with Bitcoin Lightning Network service provider Lightspark, planning to launch a blockchain-based cross-border remittance service next year, becoming one of the first U.S. banks to offer such services;

· The service will initially launch in Mexico and gradually expand to other countries, allowing users to make international transfers directly through the SoFi app at lower fees and faster speeds;

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

Why It Matters

· This marks a re-embrace of crypto technology by traditional financial institutions, particularly recognizing the application value of the Bitcoin Lightning Network in solving real payment issues. As mainstream financial institutions like U.S. banks and JPMorgan explore the application of blockchain technology in the remittance sector, SoFi's move may lead a new wave of institutional adoption. Additionally, this represents SoFi's strategic initiative to re-enter the crypto space after initially launching crypto trading services in 2019, which were scaled back due to regulatory pressures following the FTX collapse, showing a return of institutional confidence in the application prospects of crypto assets and blockchain technology in payment scenarios.

Macroeconomic Trends

Global Major Banks Lay Out Stablecoin Infrastructure, Targeting Crypto Asset Custody Market

Key Points Overview

· Financial institutions such as Franklin Templeton, BNY Mellon, Goldman Sachs, Citigroup, Deutsche Bank, and JPMorgan are actively building crypto asset custody infrastructure, viewing it as a strategic entry point into the digital asset space;

· The first state-issued stablecoin in the U.S. from Wyoming has chosen Franklin to manage its reserve funds, highlighting the important role of traditional financial institutions in the stablecoin custody sector;

· Custody services (asset safekeeping, record-keeping, and reserve management) align closely with existing banking compliance frameworks, providing a natural advantage for managing stablecoin reserves and tokenized assets.

Why It Matters

· As regulations become clearer, major banks view custody as a long-term strategic layout rather than a short-term profit opportunity. Controlling stablecoin reserves and the liquidity of tokenized assets is expected to position them at the core of the future financial system. Major stablecoin issuers like Tether and Circle manage over $100 billion in reserves, and the recently signed GENIUS Act provides clearer rules for stablecoins, prompting banks to seize this emerging market and avoid being outpaced by startups as in the fintech era. For banks, custody represents a strategic opportunity to shape new financial infrastructure.

Goldman Sachs Predicts Stablecoin Market Size Will Reach Trillions of Dollars

Key Points Overview

· Goldman Sachs' latest research report indicates that the payment sector is the most obvious market opportunity for stablecoin expansion, with the market size expected to reach trillions of dollars in the future;

· Goldman Sachs forecasts that the USDC issued by Circle will grow by $77 billion by the end of 2027, benefiting from recently passed stablecoin legislation and the expansion of the crypto ecosystem;

· U.S. Treasury Secretary Scott Bessent has stated that the market size for dollar-backed stablecoins could reach $2 trillion or more, expanding the use of the dollar globally.

Why It Matters

· Goldman Sachs' prediction further validates the importance of stablecoins as emerging financial infrastructure. The current global stablecoin market size is $271 billion, with USDT still holding a dominant position. However, as the U.S. regulatory framework becomes clearer, Tether has indicated that it is formulating a strategy for the U.S. market, while major U.S. banks like Bank of America also plan to issue their own dollar stablecoins. This indicates that the stablecoin ecosystem is entering a phase of institutional competition, expanding from primarily serving crypto trading to broader payment applications, becoming a core battleground in the competition for digital currencies.

Stablecoins Face Stricter KYC Challenges in Emerging Markets

Key Points Overview

· Stablecoins are transitioning from trading tools to everyday payment tools in emerging markets, with Nigeria completing approximately $3 billion in small transfers via stablecoins in the first quarter of 2024;

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

· Stablecoins have a clear advantage in the global $669 billion remittance market: 24/7 availability, minute-level settlement, and resistance to local currency fluctuations, but the Financial Action Task Force (FATF) warns that inconsistent compliance could lead to illicit fund flows.

Why It Matters

· Stablecoins are becoming the payment infrastructure in emerging markets, especially in high-inflation countries and cross-border payment sectors. As mainstream financial institutions begin to adopt stablecoin technology, compliance requirements will become a key challenge for industry expansion. Regulators require stablecoin providers to adhere to the same KYC standards, sanctions screening, and "travel rules" as traditional banks, which is both a sign of industry maturity and a decisive factor in whether stablecoins can become mainstream in global payments. Differences in regulatory approaches and risks of sanctions evasion will test the compliance capabilities of the stablecoin ecosystem.

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