Original Title: (Cobo Stablecoin Weekly Report 20 | The U.S. Stablecoin Battle: Banks, Data, and the Defense of $6.6 Trillion in Deposits)
Welcome to the 20th edition of the Stablecoin Weekly Report.
The main theme of this week is summed up in one word — the stablecoin war.
The battlefield primarily has several fronts:
First is the counterattack by banks. As stablecoins accelerate their penetration into the banking system, banks are both fiercely guarding their deposit base and attempting to monetize access to user financial data, creating new 'moats.'
Another front is in the Fintech giant Stripe. After streamlining backend operations (acquiring Bridge) and enhancing frontend distribution (acquiring Privy), Stripe is now directly entering the game to build its own Layer 1 from scratch. This has sparked debates over centralization versus decentralization and poses a challenge to the narrative that 'TradFi transactions will occur on Ethereum.' However, from a competitive landscape perspective, Stripe's real target is the market of Visa and SWIFT — in reality, it is seizing market share from payment networks.
Optimistically, this is still a positive incremental factor for the crypto industry. After all, this is a market worth hundreds of billions of dollars, and with every additional on-chain user, the entire crypto ecosystem gains a bit more market value support.
Market Overview and Growth Highlights
The total market value of stablecoins has reached $273.463 billion, with a week-on-week increase of $3.759 billion. In terms of market structure, USDT continues to dominate, accounting for 60.43%; USDC ranks second, with a market value of $66.793 billion, accounting for 24.42%.
Blockchain Network Distribution
Top three stablecoin networks by market capitalization:
· Ethereum: $138.595 billion
· Tron: $82.891 billion
· Solana: $12.091 billion
Top 3 networks with the fastest weekly growth:
· StarkNet: +60.40% (USDC accounts for 91.91%)
· XRPL: +24.88% (RLUSD accounts for 51.25%)
· Hyperliquid L1: +17.59% (USDC accounts for 95.61%)
Data from DefiLlama
Under the impact of stablecoins, the competition for data and deposits between banks and the crypto industry intensifies.
As stablecoins accelerate their penetration into the banking system, the competition between banks and crypto and fintech has evolved from 'cooperation' or 'opposition' to a systemic game across dimensions like data, funds, and regulation.
In the data domain, open banking is becoming a new frontline of conflict. JPMorgan announced plans in July to charge high fees to data aggregators like Plaid, stating that if they do not accept new fee agreements, their customer account information will 'no longer be accessible.' This is seen as a pressure tactic forcing fintech companies to accept new commercial terms. Meanwhile, JPMorgan has also suspended the re-entry of the crypto exchange Gemini, which its co-founder described as 'Operation ChokePoint 2.0.'
This series of actions indicates that large banks are trying to reshape industry rules by raising data access costs, while blocking APIs serves as the ultimate bargaining chip. Executives from fintech and crypto companies like Klarna, Robinhood, and Gemini jointly wrote to the Trump administration, urging a halt to such charging models to prevent hindering market competition and the mainstream adoption of crypto.
Another battle revolves around the 'deposit defense war' related to interest payments on stablecoins. The banking lobbying group BPI is pushing for legislative changes to close loopholes that allow exchanges and related companies to issue returns, specifically targeting models such as Coinbase and PayPal. They argue that yield-generating stablecoins could siphon trillions of dollars in deposits during economic downturns, impacting credit creation and financing costs. Banks are trying to lock in funding pools through legislation, while crypto platforms retain yield mechanisms within compliance frameworks to enhance the attractiveness of stablecoins and compete for the position of deposit substitutes.
The core of these two struggles is that banks are leveraging their monopolistic resources in the traditional system — data and deposit bases — to build new entry barriers to limit the market space for emerging competitors. Regulation has become the main tool for both sides: banks attempt to shape moats through rules, while fintech and crypto companies leverage regulation to promote openness and de-monopolization.
If banks win the data battle, stablecoin firms will face higher operating costs; if banks win the funding battle, the competitiveness of stablecoins' yields 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-Developed Chains: Stripe's Future Payment Blueprint.
Another battle this week revolves around 'payment blockchains' and has extended from the centralized versus decentralized debate to choices of underlying architecture. Stripe and Circle have launched their own Layer 1 blockchains, directly challenging Ethereum's L2 solutions that have dominated the mainstream narrative for years. Initially, it was expected that traditional financial giants would rely on Rollup and other L2 solutions to integrate into the crypto ecosystem, but now they have all chosen to build their own underlying networks, bypassing existing scaling routes and taking control of the foundation of transactions and settlements.
To the outside world, this action seems more like a natural extension of giants seeking profit, but such interpretations overlook the deeper strategic logic behind it. Self-developed blockchains are Stripe's inevitable move to upgrade from payment channels to a data and intelligent service platform amidst the dual waves of stablecoins and AI. Stablecoins are rapidly penetrating banking, merchants, and consumer systems, driving a reconfiguration of payment and settlement architectures. Stripe had previously laid out stablecoin frontend and backend services (acquiring Privy and Bridge), and the launch of Tempo integrates issuance, distribution, and clearing, directly targeting SWIFT's cross-border clearing and Visa/Mastercard's card payment clearing systems.
The goal of launching Tempo is not merely to replace existing links but to provide Stripe's core customers — merchants — with an on-chain payment infrastructure that balances performance, cost, and compliance. In a context where universal public chains struggle to meet the needs of supply chains and cross-border settlements, Tempo can employ permissioned and zero-knowledge proof mechanisms 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 also be transformed into value-added services, filling the gap in transaction profits post-stablecoin disruption.
From a higher dimension, Stripe's self-built chain aims to deeply integrate payment and data networks, upgrading payments from low-margin basic functions to programmable corporate operational infrastructure. Controlling the underlying link allows flexible adjustments of 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 ownership of future business relationships and data power.
Despite external concerns about centralized 'walled gardens,' optimistically, this will bring more compliant capital and real users, shifting funds and business that originally stayed within 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.
Macroeconomic Trends
Global regulatory divergence for stablecoins may accelerate industry concentration.
Key Takeaways
· The EU's MiCA, the U.S. GENIUS Act, and Hong Kong's stablecoin regulations show significant differences regarding issuers, 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 promoting 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 increasing cross-border transaction volumes will drive international coordination.
Bernstein: Coinbase is growing into a core player in the Ethereum ecosystem, with a target price of $510.
Key Takeaways
· Ether has risen 80% since June 5, driven by Circle's listing and the stablecoin minting volume on Ethereum; Coinbase earned ETH revenue through its L2 Base chain and staking business.
· Base processes over 9 million transactions daily, generating approximately $75 million in annual revenue and becoming a major token issuance platform; Coinbase integrates all Base tokens into the main exchange, enhancing ETH-denominated trading fee revenue.
· Coinbase holds approximately 136,800 ETH (worth $590 million) and launched the Base App wallet to strengthen its ecological layout.
Why It Matters
· Coinbase benefits from multiple points in Ethereum's on-chain infrastructure, trading, and asset holdings, directly tying to ETH ecosystem growth dividends.
Nobel laureate economist Simon Johnson: U.S. lax crypto legislation may trigger stablecoin runs and systemic risks.
Key Takeaways
· The author criticizes the GENIUS Act and CLARITY Act for overly catering to the interests of the crypto industry, weakening regulation and failing to effectively prevent stablecoin runs and risks to capital and liquidity.
· The bill allows foreign issuers to hold high-risk assets denominated in non-U.S. dollars as reserves, which could trigger liquidity crises and market panic when the dollar appreciates.
· Relaxing restrictions on conflicts of interest and self-dealing may recreate financial risks reminiscent of the 1920s and increase stablecoins' use in illegal transactions.
Why It Matters
· Loose regulation may push the U.S. toward becoming the 'crypto capital,' but at the same time sow the seeds for financial panic and systemic collapse.
Regulatory Compliance
Google Play's new regulations require some crypto wallets to operate under a license, excluding non-custodial wallets.
Key Takeaways
· Google Play will require licensing for crypto wallet applications starting October 29 in the U.S., Europe, and 15+ other regions, adhering to industry standards.
· In the U.S., developers need to register as money service providers or remittance agencies; in the EU, they need to register as crypto asset service providers (CASP).
· Google clarifies that non-custodial wallets are not affected by the new regulations; previously, it faced 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-issued tokens in tax-exempt accounts.
Key Takeaways
· Startup AnchorZero launched a solution allowing crypto founders to deposit pre-issued tokens into Roth IRAs for tax-free appreciation.
· The mechanism relies on Anchorage Digital Bank custody, similar to Peter Thiel's early practice of putting PayPal equity into an IRA.
· Critics claim the plan exacerbates tax unfairness and deepens the public's negative perception of the crypto industry as one of 'insider profits.'
Why It Matters
· Although legal, this highly controversial mechanism may attract regulatory attention and damage the fairness and image of the crypto industry.
SEC Commissioner Hester Peirce rarely defends privacy technology, resonating with Cypherpunk ideals.
Key Takeaways
· Peirce quoted Eric Hughes, author of the Cypherpunk Manifesto, in her speech, supporting anonymous technologies such as crypto mixers, privacy chains, and decentralized physical networks.
· She criticizes the 'third-party principle' that grants the government the power to obtain bank data without a warrant, arguing that bank records should enjoy privacy protections equivalent to the Fourth Amendment.
· Peirce acknowledges that privacy tools should be allowed even if they may be used for illegal purposes to reduce dependence on third-party information.
Why It Matters
· As a senior figure in U.S. financial regulation, Peirce's stance is unusually aligned with the core privacy values of the crypto community, potentially affecting future policies and regulatory attitudes.
a16z and DeFi Education Fund urge SEC to establish a safe harbor for NFT and DeFi applications.
Key Takeaways
· a16z and DeFi Education Fund wrote to SEC Commissioner Hester Peirce, suggesting an exemption from broker registration requirements for NFT and DeFi applications that do not involve high risk.
· The letter states that the safe harbor can 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 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 will reduce compliance barriers and lower the risk of misusing traditional securities laws to crack down on innovative applications.
Paxos reapplies for a national trust bank license in line with new stablecoin regulations.
Key Takeaways
· PayPal PYUSD issuer Paxos applies to convert its New York limited-purpose trust license to a national trust bank license under OCC supervision.
· If approved, it could manage customer assets and settle payments nationwide, but could not accept deposits or issue loans.
· This move closely follows the implementation of the GENIUS Act on stablecoin legislation, with Ripple, Circle, and other similar institutions also recently submitting license applications.
Why It Matters
· A federal license helps stablecoin issuers improve compliance and institutional client trust.
The Hong Kong Securities and Futures Commission has released robust custody standards for virtual assets to enhance customer 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 move stems from recent overseas incidents of virtual asset custody vulnerabilities and local targeted reviews revealing insufficient monitoring.
· The new standards will be incorporated into core regulatory requirements, promoting the industry to adopt more advanced custody technologies and establish effective custody frameworks.
Why It Matters
· Strengthening custody and security standards can reduce the risk of platform security incidents and enhance the compliance and international trust of Hong Kong's virtual asset market.
U.S. sanctions target the crypto network supporting the ruble stablecoin A7A5 and the shut down exchange Garantex.
Key Takeaways
· The U.S. Treasury sanctions 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 processed over $100 million in illegal transactions; after being shut down, its successor platform Grinex used A7A5 to restore customer fund access, with A7A5 achieving a daily transaction volume of $1 billion.
· Sanctioned entities include issuer Old Vector, A7 LLC and its subsidiaries, as well as multiple Russian executives and their affiliated organizations, fully prohibiting their entry into the 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 Association: Stablecoins may lead to $6.6 trillion outflow of 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 payments on stablecoins.
· The report cites Treasury data, warning that if vulnerabilities are not addressed, stablecoins could lead to a $6.6 trillion outflow of bank deposits.
· The BPI notes that exchanges and their affiliates can bypass the ban through 'rewards,' weakening regulatory effects.
Why It Matters
· If vulnerabilities are not addressed, stablecoins will impact the deposit base of banks and raise loan costs.
Fintech and crypto companies jointly urge Trump to prevent 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 say this move will 'stifle innovation' and force small financial tools to shut down.
· Industry organizations such as FTA and American Fintech Council are involved in a joint letter, calling to maintain an open financial ecosystem and prevent large banks from hindering competition.
Why It Matters
· Data access fees may weaken the competitiveness of open banking and open finance models, limiting the development space for emerging payments and crypto services.
Capital Layout
Tether and IDG Capital lead a $16 million investment in cross-border payment provider Transak.
Key Takeaways
· Cross-border payment infrastructure company Transak raised $16 million in strategic funding led by Tether and IDG Capital to expand its stablecoin payment network.
· The platform has processed over $2 billion in transaction volume, with approximately 30% coming from stablecoins, covering 75 countries, 450+ applications, and serving over 10 million users for fiat and stablecoin conversions.
· Transak holds multiple regulatory licenses and plans to expand into the Middle East, Latin America, and Southeast Asia.
Why It Matters
· Stablecoins are becoming the underlying network for global payments, with capital increasing compliance for cross-border infrastructure, accelerating the rollout in emerging markets.
Coinbase restarts the stablecoin Bootstrap Fund to enhance DeFi liquidity.
Key Takeaways
· Coinbase restarts Stablecoin Bootstrap Fund through its subsidiary Coinbase Asset Management, with initial funding directed towards Aave, Morpho, Kamino, and Jupiter.
· The fund initially provided USDC liquidity to protocols such as Uniswap, Compound, and dYdX in 2019; now USDC's annual on-chain transaction volume has reached $2.7 trillion.
· The new fund aims to provide deeper stablecoin liquidity for mature and emerging protocols, and to collaborate with early teams to promote stablecoin growth.
Why It Matters
· Leading trading platforms injecting funds could enhance the market depth for DeFi stablecoins, accelerating the adoption of stablecoins in on-chain finance.
GPU collateralized stablecoin platform USD.AI raised $13 million in funding.
Key Takeaways
· The stablecoin lending protocol USD.AI 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 the private testing phase.
· Plans to launch an ICO and gamified distribution model to further expand the market at the intersection of AI and on-chain finance.
Why It Matters
· Integrating AI hardware with stablecoin credit opens up new asset classes beyond on-chain unsecured loans.
Market Adoption
Nuvei launches a stablecoin channel to accelerate cross-border payments in emerging markets.
Key Takeaways
· Canadian payment company Nuvei provides services in over 200 markets and is now integrating stablecoins in the backend for same-day cross-border settlements.
· Adopting a 'stablecoin sandwich' model to bypass the bottleneck of agency banks, enhancing payment efficiency in underdeveloped areas.
· The new plan is primarily aimed at emerging markets with restrictions on cross-border payments and incomplete 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 intensifies its stablecoin business, targeting a future $2 trillion market.
Key Takeaways
· Visa's crypto chief Cuy Sheffield promotes the expansion of stablecoin settlements, collaborating with banks and fintech, while considering the future issuance of its own stablecoin.
· Its stablecoin settlement service has supported operations 7 days a week, with a cumulative settlement volume exceeding $200 million, with initial clients including BBVA and Rain.
· Collaborating with payment companies like Yellow Card in emerging markets such as Africa to explore the use of stablecoins in cross-border remittances, liquidity management, and treasury operations.
Why It Matters
· As a global payment giant, Visa is expanding market share through stablecoin operations, competing for dominance in payment infrastructure in emerging markets and on-chain finance.
Blue Origin tickets can now be purchased with cryptocurrencies and stablecoins.
Key Takeaways
· Blue Origin collaborates with payment technology company Shift4 to support payments for New Shepard suborbital flights using BTC, ETH, SOL, USDT, USDC, and other cryptocurrencies and stablecoins.
· Users can make instant, secure payments directly through wallets like Coinbase and MetaMask.
· New payment methods support global instant settlements in U.S. dollars, operating around the clock to meet the diverse payment needs of the high-end travel market.
· New Shepard has sent over 75 passengers to the Kármán line in outer space, and ticketing is now open to all upcoming commercial flights for crypto payments.
Why It Matters
Opening the space tourism gateway for high-net-worth crypto users expands Blue Origin's customer base while demonstrating the potential applications of crypto payments in high-value transaction scenarios.
Global grocery giant Spar will support stablecoin and crypto payments in 300 supermarkets in Switzerland.
Key Takeaways
· Spar collaborates with Binance Pay and DFX.swiss to launch stablecoin and crypto payments in over 300 supermarkets across Switzerland, covering 100+ digital assets.
· Currently, 100 stores have been enabled, with the remaining stores to be integrated over the next few months, providing instant settlement in Swiss francs.
· Merchants can save up to two-thirds on card processing fees, with over 1,000 merchants in Switzerland supporting Bitcoin payments.
Why It Matters
· This is Switzerland's first nationwide retail crypto payment implementation, which may accelerate the adoption of digital currencies in everyday consumption scenarios.
Citigroup plans to enter crypto custody and payments, focusing on stablecoin assets.
Key Takeaways
· Citibank is evaluating the launch of cryptocurrency custody and payment services, initially focusing on high-quality assets backed by stablecoins.
· Plans include custody for crypto-related ETFs, benefiting from the legislative push for Bitcoin, Ethereum spot ETFs, and stablecoins.
· Citigroup has been actively investing in the blockchain and tokenization field in recent years, 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 level of crypto asset custody and payments.
New Product Updates
Coinbase's development platform adds the 'netUSDChange' security policy for server wallets.
Key Takeaways
· Coinbase Development Platform (CDP) adds the 'netUSDChange' strategy 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 the capital exposure of high-risk transfers.
Why It Matters
· Providing more refined risk control tools for on-chain applications helps enhance the safety of institutions and developers in large transactions.
MetaMask, an Ethereum wallet, will launch a U.S. dollar stablecoin.
Key Takeaways
· MetaMask, a leading Ethereum wallet, plans to announce the U.S. dollar stablecoin mUSD this week, launching by the end of the month.
· The platform has over 30 million monthly active users, collaborating with Stripe's Bridge and M^0 to issue and introduce Blackstone for custody and fund management.
· Stablecoin yields will come from highly liquid assets like short-term U.S. Treasury bonds.
Why It Matters
· Leading wallets issuing stablecoins will accelerate their use and the internal circulation of benefits within the Ethereum ecosystem.
Coinbase teams up with Mercuryo to reduce MetaMask users' USDC on-chain costs.
Key Takeaways
· Coinbase collaborates with crypto payment platform Mercuryo to reduce MetaMask users' USDC on-chain fees by about 50%.
· Offers apply to both new and existing users; Base is incubated by Coinbase; MetaMask is the mainstream wallet for Ethereum.
· This move closely follows the announcement by USDC issuer Circle to build a Layer 1 native stablecoin using USDC as gas.
Why It Matters
· Reducing on-chain costs can promote the circulation of USDC in Ethereum and Base ecosystems, solidifying Coinbase's position in the stablecoin competition.
Circle launches the stablecoin native chain Arc, with a Q2 net loss of $4.82 billion.
Key Takeaways
· Circle's Q2 revenue was $658 million, with a net loss of $4.82 billion impacted by IPO-related non-cash expenses.
· Launching an EVM-compatible Layer 1 blockchain Arc, using USDC as gas, aimed at payment, foreign exchange, and capital market applications.
· The circulation of USDC increased by 90% year-on-year to $61.3 billion, with on-chain transaction volume reaching $5.9 trillion, raising its market share to 28%.
Why It Matters
· Self-developed chains can strengthen USDC's foundational role in payments and settlements, directly participating in the stablecoin infrastructure competition.
Binance collaborates with Spain's BBVA to provide off-chain custody services.
Key Takeaways
· Binance partners with Spain's third-largest bank BBVA to provide off-chain custody, storing assets in U.S. Treasury bonds held by BBVA, which can serve as trading collateral.
· This arrangement separates trading from funds, reducing counterparty risk arising from exchange bankruptcy.
· This continues Binance's strategy of introducing third-party custody (like Sygnum, FlowBank) in response to market concerns about fund safety following the FTX incident.
Why It Matters
· Strengthening user asset isolation mechanisms helps enhance exchange compliance and market trust.
Worldcoin competitor Humanity Protocol launches with an $1.1 billion valuation.
Key Takeaways
· Hong Kong-based decentralized identity network Humanity Protocol launches with a mainnet valuation of $1.1 billion, using zero-knowledge transport layer security protocol (zkTLS) to connect Web2 certificates with Web3 services.
· zkTLS allows users to verify qualifications related to frequent travelers, finance, education, etc., without disclosing underlying data, avoiding biometric privacy risks.
· Future expansions will include on-chain ticketing, decentralized governance, and Sybil attack prevention platforms.
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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