Cointelegraph

Internet access in Iran was cut on Thursday by the government as protests spread across the Middle Eastern country, raising the question: Can its citizens still use crypto? 

Around seven million people, out of the country’s 92 million population, are estimated to be crypto users, according to Statista. TRM Labs tracked roughly $3.7 billion in total crypto flows in Iran between January and July 2025.

But internet access has been cut off in the country as protests began over worsening economic conditions, and after the Iranian rial hit record lows against the US dollar.

Some outside observers, such as Bitwise CEO Hunter Horsley, have even suggested buying Bitcoin (BTC) could be a solution as a store of wealth. 

Source: Cloudflare Radar

Options for crypto without Internet

Without access to the internet, Iranians will find it far more difficult to transact using cryptocurrency. However, several technologies available today could make a difference. 

Elon Musk’s Starlink satellite internet equipment, for one, can provide high-speed internet in areas that previously had no reliable options.

There have been calls for Musk to deploy Starlink to restore internet in the country as he did during a previous blackout in June 2025. Unconfirmed reports claim Musk has quietly granted the request.

Bitcoin infrastructure company Blockstream could provide another option for crypto users. Its satellite network can broadcast Bitcoin data anywhere in the world without using the internet. 

Starlink provides two-way high-speed internet by connecting user dishes to satellites that relay data globally via laser and ground stations.

Some clever users have also found that Jack Dorsey’s decentralized peer-to-peer messaging service, Bitchat, which uses a Bluetooth mesh network to send messages, can also allow Bitcoin transaction data to be sent between phones. 

However, eventually a device with internet is required before it can be confirmed on-chain.

Chromestats show Bitchat has been downloaded more than 1.4 million times since its launch, with over 19,828 coming in the last day and more than 460,724 in the last week.

Other tools in development for offline crypto use

Meanwhile, there are also several tools in the works to allow crypto use offline. 

Darkwire, a tool that uses long-range radio to create a decentralized mesh network to send data, such as Bitcoin transactions, without the internet, was unveiled by its pseudonymous creator Cyb3r17 in May 2025.

Related: Afghanistan internet blackout ’a wake-up call’ for blockchain decentralization

Similar to Blockstreams satellites and Bitchat, eventually, a device in the network requires the internet for the transaction to be verified and added to the blockchain. Darkwire is listed on GitHub as undergoing a major rewrite.

In 2022, a South African software developer, Kgothatso Ngako, reportedly created a different solution known as Machankura. The tool lets users send and receive Bitcoin using phones without an internet connection by leveraging the mobile telecom network, according to a March 2023 Forbes report and the project's website.

Magazine: Big questions: Would Bitcoin survive a 10-year power outage?

The massive crypto crash in October decimated market makers, ending an era where crypto traders were able to make easy money, says crypto exchange BitMEX.

The crash between Oct. 10 and 11 wiped out $20 billion in the “most destructive event for sophisticated market makers in crypto history,” BitMEX said in its State of Crypto Perpetual Swaps in 2025 report released on Thursday.

A feedback loop of auto-deleveraging, where exchanges liquidate profitable, leveraged positions to cover themselves and prevent further losses, broke the market makers’ ‘safe’ delta-neutral strategies,” forcing them to pull liquidity and leave orderbooks at multi-year lows, BitMEX said.

“For years, perpetual swaps have been a great source of alpha for yield: farm the funding, capture the spread, and trust the exchange engine to maintain the walls,” it added. “That era of easy yield and structural stability appeared to end in 2025.”

Thinnest crypto order books since 2022

Market makers are critical to ensuring there are always counterparties to trades and usually hold crypto and bet against, or short, the token to minimize risk.

When auto-deleveraging mechanisms during the October crash forcibly closed the market makers’ short hedges, they were left holding “naked spot bags in a free-falling market.”

“This breach of the ‘neutrality’ promise caused MMs [market makers] to pull liquidity globally in Q4, resulting in the thinnest orderbooks seen since 2022,” BitMEX said.

Source: BitMEX

BitMEX said that the strategy, where traders could arbitrage between the spot and futures markets, “has become overcrowded” with funding rates dropping to 4%, “killing the funding rate trade” and underperforming Treasury bills.

Market makers split, while users move to on-chain perps

Meanwhile, BitMEX added that last year also saw the market split into “fair matchers” and “predatory B-Book exchanges,” where the platform operates as a market maker and has “‘abnormal trading’ clauses to void profitable trades.”

“It became clear that aggressive B-Book operations were taking the other side of user trades and refusing to pay out when they lost,” BitMEX said.

BitMEX also noted that crypto trading volumes “migrated aggressively to high-performance Perp DEXs like Hyperliquid,” but warned that decentralization is not the solution for market manipulation.

It said that the Plasma (XPL) token launch in September gave attackers a “liquidation map” and saw illiquid pre-launch tokens with no price oracle being manipulated to trigger liquidations on on-chain perp positions.

BitMEX argued the attack “demonstrated that on-chain transparency cannot protect users as much as credible [centralized exchanges] can.”

“The failure of unproven, high-risk platforms has cleared the air for battle-tested exchanges and genuine innovations to thrive,” it said.

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Stablecoin payment flows could tap $56.6 trillion by 2030, according to Bloomberg Intelligence, a rise that would make stablecoins one of the most important payment tools in global finance.

Stablecoin payment flows was $2.9 trillion in 2025, according to Bloomberg. Hitting $55.6 trillion would require a staggering 81% compounded annual growth rate (CAGR) over the next five years.

This could be driven by increasing institutional adoption and rising reliance on stablecoins in countries where people are seeking protection from inflation and economic instability.

Stablecoin payment flows between 2024 and 2025 and project flows through to 2030. Source: Bloomberg Intelligence

USDT is dominating CeFi, but USDC is winning DeFi

Bloomberg noted that Tether (USDT) continues to be the most used stablecoin for everyday payments, business transactions and as a savings vehicle, while Circle’s USDC (USDC) stablecoin is the most preferred on decentralized finance platforms.

Stablecoin flows rose 81% year-on-year in 2025; however, the share of volume on decentralized crypto platforms fell, Bloomberg reported, citing data from crypto analytics platform Artemis.

Artemis co-founder Anthony Yim attributed this shift to the growth in US dollar stablecoin usage in emerging economies as they continue to navigate an “increasingly unstable geopolitical landscape.”

Despite the shift, USDC still recorded higher transaction volume, reaching $18.3 trillion in 2025 compared with USDT’s $13.3 trillion. 

The two stablecoins accounted for more than 95% of the record $33 trillion in transaction volume last year, which marked a 72% year-on-year increase.

USDT continues to dominate the market from a valuation perspective, however, boasting a $186.9 billion market cap compared with USDC’s $74.9 billion.

Related: Nexo to offer zero-interest crypto lending for BTC and ETH holders 

The stablecoin market currently sits at $312 billion, with the US Treasury estimating in April that it would reach $2 trillion by 2028.

Adoption at nation-state and institutional level

Since US President Donald Trump signed the GENIUS Act into law in July, Canada and the UK have renewed efforts to implement stablecoin frameworks in 2026 or the near future, potentially signalling a broader movement to integrate stablecoins into mainstream finance worldwide.

Meanwhile, institutional adoption is ramping up, with remittance platform Western Union set to launch a stablecoin settlement system on the Solana blockchain sometime in the first half of 2026, while MoneyGram and Zelle are also rolling out stablecoin solutions to fuel faster cross-border payments.

Magazine: How crypto laws changed in 2025 — and how they’ll change in 2026

More than 56% of the Bitcoin network is now powered through sustainable means and is set to rise further as Bitcoin mining brings more green energy projects online, according to tech investor and ESG expert Daniel Batten.

“Bitcoin mining could be the century’s most important sustainable innovation,” said Batten in a lengthy X post on Thursday.

He pointed out that a lot has changed since 2021 when Bitcoin mining was powered by just 34% sustainable energy.

The latest data from Batten, Willy Woo, and the Digital Assets Research Institute (DARI) shows that just a little over four years later, 56.7% of Bitcoin mining is now sustainable energy. 

However, Batten argues that Bitcoin does more than just use green energy — it can also help the industry grow. 

Bitcoin is removing bottlenecks to on-grid renewables 

Bitcoin mining removes major bottlenecks that slow down green energy adoption by acting as an immediate buyer for renewable projects stuck in ten to 15-year interconnection queues, he said.

This can help cut renewable project payback periods from eight years to three and a half years, making clean energy investments more attractive. 

Related: Nine myths about Bitcoin energy use challenged by data, ESG expert says

BTC mining operations also provide flexible demand that stabilizes grids with variable renewable sources, giving operators confidence to add more solar and wind capacity.

Bitcoin miners by power source. Source: Daniel Batten 

Replacing fossil fuels with clean electric heat

Around 50% of global energy goes into heating, which is mostly fossil fuel-based. Bitcoin mining’s waste heat offers a clean alternative, he argued.

Examples given included district heating by mining firm MARA, which warms 80,000 residents in Finland, around 2% of the country’s population, using Bitcoin mining heat.

Multiple companies now offer Bitcoin-powered home heaters, and there are multiple industrial applications, such as solar-powered Bitcoin mining to deliver heat for greenhouses in the Netherlands. 

Funding renewable energy R&D

“Bitcoin mining has been responsible for reviving mothballed renewable energy technologies such as OTEC (Ocean Thermal Energy Technology),” said Batten.

OTEC is a renewable technology mothballed since the 1980s due to cost constraints.  Miners can help to solve the problem by providing revenue without costly grid connections.

BTC mining also powers microgrids in rural Africa through “Gridless Compute,” bringing electricity to 8,000 previously unconnected homes in Kenya, Malawi, and Zambia.

Bitcoin can benefit Ocean Thermal Energy Technology. Source: Makai Ocean Engineering

Eliminating harmful methane emissions

Bitcoin mining tackles three major carbon-intensive practices: gas peaker plants, landfill methane, and oil field flaring. 

Several innovative companies are now utilizing this otherwise wasted primary emission to mine Bitcoins, preventing it from simply being burned off and increasing emissions. 

“The combined impact of carbon-negative Bitcoin mining is that mitigation has already reached 7% of the Bitcoin network’s emissions,” Batten said, concluding: 

“Bitcoin mining has emerged as a linchpin for addressing four systemic barriers to climate progress, as demonstrated by both real-world data and case studies.”

Magazine: Big questions: Would Bitcoin survive a 10-year power outage?

Developers of privacy-focused Zcash have announced they’re already working on a new wallet for the cryptocurrency, less than a day after their high-profile exit from Electric Coin Company (ECC).

“The team from the Electric Coin Company that launched Zcash, and created the Zashi wallet, is now launching a new wallet for Zcash, using the same Zashi codebase we built,” said former ECC CEO Josh Swihart late on Thursday.

The code name for the wallet is cashZ and will be launched in a “few weeks,” he added. Users of the existing Zcash (ZEC) wallet, Zashi, will be able to migrate to the new one seamlessly. There were no other details about the new wallet. 

The move comes just hours after the team exited ECC due to a clash over nonprofit rules and governance tensions. 

Swihart reassured users of the privacy coin and wallet that “the entire team that worked at Electric Coin Company and built Zashi is still 100% focused on full-stack Zcash development.”

“We aren't launching any new coins, we're just scaling Zcash. To do that, it required that we leave and start a new Zcash-focused company.”

More than 3,800 people have already signed up for the new wallet. Source: Cashz.org

ZCash devs want to go back to cypherpunk roots 

On the website, Swihart gave more reasons why the team decided to start a new company. “First, Zcash is cypherpunk, and we need an organization built around that understanding,” he said. 

The second reason was alignment. Swihart argued that privacy in crypto is normal, just as it is with physical cash. Fighting for these rights requires an organization with courage and the ability to move quickly without bureaucratic constraints.

Nonprofits focus on rule-following while startups focus on innovation, said Swihart.

“Anyone who's been in crypto more than a few years knows that the entanglement of nonprofit foundations and tech startups has been the cause of endless drama.”

Thirdly, Zcash has experienced a rebirth over the past two years and is no longer a small project. To compete with Bitcoin (BTC), Ethereum (ETH), and Solana (SOL) with billions of users, they need an organizational structure built to scale rapidly.

ZEC shows minor recovery 

The privacy token has dumped more than 21% since the upheaval, falling below $400 on Thursday.

ZEC saw a minor recovery after the announcement during early trading on Friday when it moved back to $430. However, the asset remains down 86% from its 2016 all-time high of $3,191 and down 38% from its 2025 high of just under $700, according to Coingecko. 

Magazine: 2026 is the year of pragmatic privacy in crypto — Canton, Zcash and more

The Optimism Foundation has floated a major shakeup to the dynamics of the layer 2’s OP token, proposing to allocate 50% of its Superchain revenue to regular buybacks of the asset. 

Optimism Grants council member Michael Vander Meiden shared the proposal via X on Thursday, highlighting that “after many years of being a ‘useless gov token’ the value of the OP token will finally be tied to network activity.”

The proposal was initially submitted in the Optimism governance forum on Wednesday. It outlines a plan to direct 50% of incoming Superchain revenue to monthly Optimism (OP) buybacks that will flow back into the token treasury. 

“These tokens can then be burned or distributed as staking rewards as the platform evolves. Governance will retain oversight over parameters that control the buyback and the token treasury,” the Optimism Foundation said. 

OP buyback proposal. Source: Optimism 

Optimism wants to grow OP utility beyond governance

The move is part of a push to expand OP utility beyond primarily governance into something that is “tightly aligned with the growth of the Superchain,” and could provide a major boost to OP holders and builders within the ecosystem. 

“As the Superchain evolves, the token may take on additional functionality aligned with the network’s long-term decentralization and resilience, including roles in securing shared infrastructure, coordinating sequencer rotation, and enabling collective governance over core protocol functions,” the Optimism Foundation said. 

Related: Ethereum is the Linux of blockchain, says co-founder Vitalik Buterin

The proposal outlined the importance of relativizing OP to reflect the growth of Optimism from being an “experiment” in Ethereum scaling to an ecosystem hosting a significant amount of total layer 2 activity. 

“The Superchain captured 61.4% L2 fee market share and processes 13% of all crypto transactions, and that share continues to rise. The OP token should be aligned with that momentum and growth,” the team said. 

Optimism’s Superchain was launched back in February 2023 and consists of a network of layer-2 (L2) chains built with the project's open-source OP stack. The ecosystem hosts chains such as Unichain, Ink and Coinbase’s L2 Base. 

The OP token saw a tough 2025, with the price declining by nearly 83% over the past 12 months. The price has yet to bounce this week on the news of the proposal.

 Magazine: China’s Ethereum’ in civil war, Japan to embrace Bitcoin ETFs: Asia Express

Ongoing sanctions against nation-states last year pushed the total value of crypto received by illicit addresses to its highest in history, as blacklisted entities sought to evade sanctions at scale.

Throughout 2025, there were “unprecedented volumes associated with nation-states’ on-chain behavior,” blockchain analytics firm Chainalysis said in their 2026 crypto crime report on Thursday.

Illicit cryptocurrency addresses received at least $154 billion in 2025, a 162% increase year-over-year from 2024’s $59 billion, primarily driven by the value received by sanctioned entities. 

At the same time, Russia, which is facing sanctions due to its invasion of Ukraine, launched its ruble-backed A7A5 token in February 2025, and transacted over $93.3 billion in less than one year.

“In 2025, we tracked a notable rise in nation-state activity in crypto, marking the latest phase in the maturation of the illicit on-chain ecosystem,” the Chainalysis team said.

Source: Chainalysis

The Global Sanctions Inflation Index estimated there are just under 80,000 total sanctioned entities and persons globally in May 2025. While the Center for a New American Security found that in 2024, the US alone issued “an unprecedented” number of sanctions, with 3,135 entities added to its Specially Designated Nationals and Blocked Persons List.

Illicit stablecoin usage mirrors legitimate activities

Just as stablecoin volumes have blossomed over the past year, a similar trend has emerged in illicit circles, with stablecoins dominating illicit transactions, accounting for 84% of all volume, according to Chainalysis.

“This mirrors broader ecosystem trends where stablecoins occupy a sizable and growing percentage of all crypto activity due to their practical benefits: easy cross-border transferability, lower volatility, and broader utility,” the Chainalysis team said.

Related: Russia mulls relaxing crypto rules to blunt impact of Western sanctions

Illicit crypto use remains below 1% of all tx volume

Chainalysis speculates that as it identifies more illicit addresses, the value received by illicit crypto addresses will likely increase as 2026 unfolds. However, it's still just a drop in the ocean, with 99% of crypto transactions not related to illicit use.  

“These illicit volumes are still dwarfed by the broader crypto economy, which largely consists of legitimate transaction volumes,” the Chainalysis team said, adding that “the illicit share of all attributed crypto transaction volume increased slightly from 2024 but remains below 1%.”

Compared to fiat, the United Nations Office on Drugs and Crime has estimated in the past that global criminal proceeds make up an average of 3.6% of global domestic product.

Magazine: When privacy and AML laws conflict: Crypto projects’ impossible choice

Bitcoin could reach $2.9 million by 2050 once it becomes a settlement currency for international and domestic trade and makes its way into more central bank reserves, analysts at asset manager VanEck predict.

The $2.9 million price target assumes a 15% Compounded Annual Growth Rate (CAGR) and Bitcoin (BTC) settling 5-10% of global international trade and 5% of domestic trade by 2050, according to VanEck’s head of digital assets research, Matthew Sigel and senior investment analyst, Patrick Bush.

Global liquidity expansion and monetary debasement would be the primary drivers of Bitcoin’s price rise, they said in a note on Thursday: “Bitcoin is not a tactical trade in this framework; it functions as a long-duration hedge against adverse monetary regime outcomes.”

“While short-term price action remains a function of global liquidity cycles and leverage, the long-term value accrual will be driven by Bitcoin’s convergence with the structural deficiencies of the sovereign debt system.”

Sigel and Bush estimated that central banks could hold 2.5% of their assets in Bitcoin, while a $2.9 million price would imply that Bitcoin represents 1.66% of the world’s financial assets.

The $2.9 million price point was VanEck’s base case, while a bear scenario sees a 2% CAGR to $130,000 and a bull scenario a 20% CAGR to $52.4 million.

Key assumptions for Bitcoin in base, bear, and bull scenarios for 2050. Source: VanEck

Bitcoin is already being used in global trade, particularly in sanctioned countries like Venezuela, Iran and Russia, but has seen little adoption among G7 countries.

Bitcoin would surpass some of today’s major currencies

Data from SWIFT, the largest international payments network, shows the US dollar accounted for 47.8% of international trade as of September 2025, followed by the Euro and British Pound at 22.8% and 7.4%, respectively.

The Japanese yen and Chinese yuan round out the top five at 3.7% and 3.2%.

Share of SWIFT international trade settlement in fiat currencies as of September 2025. Source: SWIFT

If Bitcoin were to claim a 5-10% share under VanEck’s model, it would be about as widely used as the British pound is today for international trade settlement.

Related: Bitcoin trader maintains $76K BTC price target as 2026 comeback fizzles

The 15% CAGR that VanEck assumes is a fall from the 25% CAGR VanEck used in December 2024, when it estimated that a US Bitcoin reserve of 1 million coins could reduce America’s debt by 35% by 2049.

Magazine: Davinci Jeremie bought Bitcoin at $1… but $100K BTC doesn’t excite him

Bank of America has joined Goldman Sachs in lifting Coinbase from “neutral” to “buy” this week, citing Coinbase’s lead role in bringing the financial system on-chain and becoming an “everything exchange.”

In a research note released on Thursday, BofA said Coinbase’s expansion from trading to tokenizing real-world assets, including stocks and exchange-traded funds, as well as its move into prediction markets, is positioning it to cross-sell more products to new and future users and lead a “new financial system.”

“While the stock is off 40% from its July highs, under the surface of the 4Q25 crypto correction the company’s product velocity has increased and its [total addressable market] expanded in parallel.”

BofA said Coinbase (COIN) shares could rise around 38% from their current price to reach $340 as short interest in COIN reverses, while the tax-loss harvesting pressure seen in late Q4 is easing.

Extract of BofA’s research note on Coinbase. Source: Matthew Sigel

On Monday, investment bank Goldman Sachs also assigned Coinbase a “buy” rating, explaining the recent market pullback had left crypto stocks trading at a discount, potentially setting the stage for a rebound in early 2026.

COIN shares were volatile over the course of 2025

Coinbase has fallen 5.6% over the past 12 months to $245.6, but throughout the year has traded as low as $151.8 and as high as $419.8, amounting to a volatile 176.6% difference between the prices.

COIN’s change in share price over the last month. Source: Google Finance

Related: Temple Digital Group launches 24/7 institutional trading built on Canton

Base token, Trump will also push COIN this year

BofA is also bullish on Coinbase potentially launching a token for its Ethereum layer-2 network, Base, stating it would raise billions of dollars and incentivize developers and early adopters to build and use more decentralized finance applications onchain.

Another catalyst for Coinbase is US President Donald Trump having three more years in office to push his vision of making the US the crypto capital of the world, BofA noted:

“The world is still in the early innings of crypto adoption, and we see Coinbase as the trusted platform with #1 market share in the US which makes it a perfect TradFi partner.”

The bank, however, flagged Binance’s potential return to the US market and further crypto price corrections as two obstacles that could limit COIN’s upside in 2026.

Magazine: Davinci Jeremie bought Bitcoin at $1… but $100K BTC doesn’t excite him

New York Assemblyman Clyde Vanel has reintroduced legislation to the US state’s lower house that aims to restrict what event contracts prediction markets such as Kalshi and Polymarket can offer.

Vanel resubmitted the Oversight and Regulation of Activity for Contracts Linked to Events, or ORACLE Act, to the New York State Assembly on Wednesday, which was first introduced in November and aims to ban certain markets tied to politics, sports, the stock market and others.

Prediction markets have gained popularity over the past year and offer bets on a range of events, but markets on sports are a particular money maker, with Foresight Ventures research finding up to 90% of Kalshi’s volume was tied to sports.

The bill would ban sports event contracts tied to the outcome of a particular match, such as NFL games during the season, but would still allow bets on the outcome of the league, such as the winner of the Super Bowl.

It would also ban “prop betting” — contracts that focus on particulars of the game, such as the first scoring team or wagers around a particular player.

Monthly trading volumes on Polymarket (blue) and Kalshi (green) have skyrocketed over the past four months to record highs. Source: Token Terminal

Prediction market platforms have already crossed paths with regulators in multiple states, with agencies arguing that they need gambling licenses to operate.

Kalshi, in particular, has sued multiple state gambling regulators, including the New York State Gaming Commission, to argue that it is regulated under federal law.

New York bill to ban politics, “death markets”

Vanel’s bill would also ban prediction markets around politics, deaths, or a “catastrophic event.”

Markets allowing bets on elections or government actions, such as which political party will win the US midterms, would be outlawed, as would markets that relate to “war, state or national emergencies, natural or human-made disasters, mass shootings, acts of terrorism, or public health crises.”

The bill would also ban so-called “death markets,” which allow wagers on the death or killing of people, along with markets allowing speculation on the price of a publicly traded company.

Platforms must also provide a way for users to self-exclude and limit the amount of time and money they spend on the platform. Markets that continue to operate in New York after being ordered to stop would be fined $1 million a day until they do.

Magazine: How crypto laws changed in 2025 — and how they’ll change in 2026

Nexo has launched a zero-interest crypto lending product that allows Bitcoin and Ether holders to borrow against their assets through fixed-term loans.

According to a company announcement, the product, called Zero-interest Credit, offers fixed-term loans for users who hold Bitcoin (BTC) and ETH (ETH), with repayment conditions set in advance. Loans are settled at maturity and can be repaid using either stablecoins or collateral, depending on market conditions.

The offering expands a structured lending model that had previously been available only through Nexo’s private and OTC channels, where it facilitated more than $140 million in borrowing during 2025, according to the company.

Borrowers choose the loan size and duration up front, with terms that prevent liquidation before maturity and define the repayment range. At the end of the term, loans can be settled using either stablecoins or collateral, with the option to renew under new terms.

Nexo is a crypto financial services company founded in 2018 that offers crypto-backed loans, trading and savings services to users across 150 jurisdictions.

In April 2025, the company said that it would reenter the US market after withdrawing in late 2022 and settling a case with the Securities and Exchange Commission for $45 million in early 2023.

Defi lending grows in 2025

Crypto lending has evolved significantly since 2022, when companies such as Celsius and BlockFi were widely blamed for amplifying market contagion and deepening the fallout from the FTX collapse.

In 2025, centralized lenders including Nexo, Ledn, Xapo Bank and Coinbase expanded their crypto lending offerings under more conservative, fully collateralized structures, while decentralized finance (DeFi) protocols also recorded strong growth.

According to DefiLlama data, DeFi lending products grew from about $48.15 billion in total value locked (TVL) on Jan. 1, 2025, to a peak of $91.98 billion on Oct. 7, 2025.

DeFi lending total value locked. Source: DefiLlama

Although the market trended lower following the Oct. 10 crypto liquidation event, activity stabilized in November and total value locked (TVL) currently stands at around $66 billion.

The DeFi lending market is led by Aave, with more than $22 billion in outstanding loans backed by over $55 billion in deposited assets, according to DefiLlama data.

Morpho ranks second, supporting roughly $3.6 billion in outstanding loans backed by about $10 billion in supplied liquidity.

Magazine: How crypto laws changed in 2025 — and how they’ll change in 2026

The Commodity Futures Trading Commission (CFTC), a US financial regulator, issued a no-action letter to crypto derivatives exchange Bitnomial on Thursday, clearing the way for the exchange to offer event contracts and prediction markets.

The CFTC letter alleviates Bitnomial from the strict reporting requirements for asset swaps under current US rules, a hurdle that is impractical for fast-moving platforms like prediction markets, where tens of thousands of these swaps may occur in a day.

Bitnomial must still provide transparent consumer-facing data on its website, including timestamps and sales data for contract markets, and provide relevant data to the CFTC when requested, according to the terms of the letter.

The first page of the CFTC no-action letter. Source: CFTC

All positions must also be collateralized, meaning they cannot be leveraged and must be backed 1:1 to ensure liquidity and prevent cascading liquidations that threaten the platform's solvency.

The no-action letter reflects the growing acceptance of prediction markets from US regulators, as blockchain technology opens up new financial use cases that were not possible with legacy financial infrastructure.

Related: Bitnomial gains CFTC approval to launch prediction markets in US

Prediction markets gain steam in the US since 2024

Prediction markets gained significant momentum in the US during the 2024 elections, with proponents arguing that they are better than polled data at forecasting outcomes.

Since that time, prediction market platforms like Polymarket and Kalshi have seen increased interest from institutional investors and broken into the cultural zeitgeist.

In September 2025, Kalshi and Polymarket were featured in a South Park episode, a long-running satirical show in the US that touches on major news events and cultural trends. 

The following month, Intercontinental Exchange (ICE), the owner of the New York Stock Exchange, invested $2 billion in Polymarket at a $9 billion valuation.

Polymarket founder Shayne Coplan (left) and Intercontinental Exchange CEO Jeffrey Sprecher (right) following $2 billion deal. Source: Shayne Coplan

Crypto exchange Coinbase agreed to acquire The Clearing Company, a prediction market startup, in December, as part of its push into prediction markets.

The deal is expected to close in January 2026, which is the year of the US midterm elections, which will likely boost trading volume on prediction markets as the election season kicks off.

Magazine: How crypto laws changed in 2025 — and how they’ll change in 2026

US President Donald Trump reportedly will not grant a pardon to Sam “SBF” Bankman-Fried, who is serving a 25-year sentence for his role in the collapse of cryptocurrency exchange FTX.

According to a Thursday interview with Trump by The New York Times, the president said he had no intention of pardoning Bankman-Fried and others, including music producer Sean Combs and former New Jersey Senator Robert Menendez. Bankman-Fried has been behind bars since August 2023 when a federal judge revoked his bail before his criminal trial. 

In the same interview, Trump pushed back against questions regarding potential conflicts of interest with the cryptocurrency industry. The president and his family have connections to the Bitcoin mining company American Bitcoin, the platform behind the USD1 stablecoin World Liberty Financial and through his personal memecoin, Official Trump (TRUMP).

“I got a lot of votes because I backed crypto, and I got to like it,” Trump told the Times. 

Bankman-Fried was sentenced to 25 years in prison in March 2024 following his conviction on seven felony counts related to his role in the misuse of customer funds at FTX. Other executives, including former Alameda Research CEO Caroline Ellison and former FTX Digital Markets co-CEO Ryan Salame, received substantially less prison time as part of plea deals with prosecutors.

Since his conviction and sentence, reports signaled that Bankman-Fried may have attempted to seek a presidential pardon from Trump by saying he had a “good relationship” with Republicans and cozying up to right-wing figures like Tucker Carlson. Polymarket gave users only a 6% chance on bets that Trump would pardon SBF before 2027.

Trump has pardoned other figures tied to the crypto industry. In January, shortly after taking office, he issued a pardon for Silk Road founder Ross Ulbricht. He also made waves in October by pardoning former Binance CEO Changpeng “CZ” Zhao, who served four months and whom Trump later said he didn’t know. 

SBF awaits appeal in federal court

Even without a pardon from Trump on the table, Bankman-Fried has legal recourse to have his conviction and sentence overturned. 

In November, the US Court of Appeals for the Second Circuit heard arguments from SBF’s lawyers about appealing the former CEO’s judgment. Although no notice had been posted to the public docket as of Thursday, the court is eventually expected to issue a decision. Should they deny SBF’s appeal, his last recourse would be to file for a review of the case with the Supreme Court. 

Ellison, who was sentenced to two years in prison, is scheduled to be released on Jan. 21. Federal Bureau of Prisons records showed that, in October, she had been transferred from the Federal Correctional Institution in Danbury, Connecticut to a Residential Reentry Management field office in New York City as part of her transition toward the end of her sentence.

Magazine: How crypto laws changed in 2025 — and how they’ll change in 2026

Bitcoin’s start of year (BTC) rally ran into stiff resistance near $93,000, triggering a pullback that has shifted the market’s focus back to key support levels. While the higher-time-frame (HTF) structure still looks fragile, the lower time-frame (LTF) signal suggests bulls may yet have room to regain control if critical levels hold.

Key takeaways:

Bitcoin rejected at $93,000 for the third time, slipping back toward weekly lows near $89,250.

Rising open interest during the dip suggests shorts are building positions near $90,000.

Strong passive bids around $90,000 could act as a springboard, or fail and open the door to the $86,000 to $87,000 range.

Bitcoin bulls need to hold $90,000

After an 8% surge to $93,000, Bitcoin printed a swing failure pattern (SFP) at the same resistance level for the third time. The rejection pushed BTC down to weekly lows near $89,250, reviving the risk of consolidation or bearish continuation in line with the broader HTF trend.

Bitcoin six-hour chart. Source: Cointelegraph/TradingView

Still, the LTF structure leaves room for a bullish response. Bitcoin is currently testing a key order block between $89,200 and $90,500, the first area of interest where bulls could attempt fresh long entries if momentum flips positive. 

Adding to this support, BTC continues to hold above the monthly rolling VWAP (volume-weighted average price), which turned bullish again at the start of 2026.

In the near term, Bitcoin could chop sideways into the weekly close. A decisive bullish engulfing recovery above $91,666 would mark the first confirmation of bullish continuation, forming a higher low on the LTF trend and potentially trapping late shorts positioned between $90,000 and $92,000.

Bitcoin open interest and price. Source: Coinalyze

Open interest data strengthens this setup. As BTC dipped from $92,000 to $90,000, open interest climbed sharply, a sign that short positions are building. If BTC can defend $90,000, a short squeeze becomes likely. A strong daily close above $91,700 would be the first signal, opening the path for another test of $93,000.

However, failure to hold above $89,000 would quickly expose internal liquidity between $86,000 and $87,000, giving sellers a clear downside target.

Related: 60K Bitcoin absorbed by accumulators as miners send it to exchanges: Will rally stall?

BTC buyers flood order book with passive bids

Data from CoinGlass shows the aggregated order book liquidity delta flashing strong passive bids around $90,000. Over the past two weeks, similar bid absorption has preceded short-term recoveries, a pattern that could repeat if buyers continue to defend this zone.

Bitcoin orderbook liquidity delta chart. Source: CoinGlass

That being said, futures trader Byzantine General cautioned that rising open interest cuts both ways. The analyst said, 

“Liquidations data suggests that there's a good amount of vulnerable longs in there. I could see a little bounce here at 90k, but ultimately it makes sense to me that it takes out those local lows around 86k.”

Related: Bitcoin trader maintains $76K BTC price target as 2026 comeback fizzles

The Truebit protocol reported a security incident “involving one or more malicious actors” with a smart-contract address suggesting the loss of $26 million worth of Ether.

In a Thursday X post, Truebit said it was in contact with law enforcement and “taking all available measures” following the security incident. Crypto sleuths monitoring the protocol reported that the exploit had resulted in the removal of 8,535 Ether (ETH), worth about $26.6 million at the time of publication.

Source: Truebit

The affected smart contract address provided by Truebit showed only small amounts of ETH stolen. However, analysis from Lookonchain and other sleuths signaled that the total amount of crypto stolen in the attack was worth more than $26 million.

It’s unclear what led to the multimillion-dollar exploit or whether user funds were at risk. Cointelegraph reached out to Truebit for comment on the incident, but had not received a response at the time of publication.

Almost immediately following reports of the exploit, the price of the Truebit (TRU) token plummeted to an all-time low. According to data from Nansen, the TRU price fell more than 99% to $0.0000000029 from about $0.16 at the time of writing. 

Truebit hack follows major exploits in 2025

December saw several significant hacks and exploits resulting in millions of dollars worth of digital assets stolen.

The Flow Foundation reported that an attacker had managed to counterfeit tokens on the network on Dec. 27, resulting in about $3.9 million in losses. Hackers also targeted Trust Wallet’s Chrome browser extension using a malicious update to steal $7 million.

Despite these incidents, blockchain analytics platform PeckShield reported on Jan. 1 that the total losses across the crypto industry due to exploits and hacks dropped to $76 million in December from $194 million in November .

Magazine: How crypto laws changed in 2025 — and how they’ll change in 2026

Temple Digital Group has launched a private, institutional trading platform built on the Canton Network, offering continuous, 24/7 trading of digital assets using a central limit order book and non-custodial market structure.

According to an announcement shared with Cointelegraph on Thursday, the platform supports trading in cryptocurrencies and stablecoins and is designed to allow institutions to transact with approved counterparties while maintaining privacy and regulatory oversight, with participants retaining custody of assets rather than relying on a central intermediary.

The system is built around a price-time priority central limit order book with sub-second matching and includes execution monitoring and transaction cost analysis tools intended for institutional trading desks, the company said.

The platform is live and onboarding institutional users, including asset managers, market makers and financial institutions, with support for tokenized equities and commodities planned for 2026.

Top blockchains for tokenized real-world assets. Source: RWA.xyz

Temple Digital Group is a New York–based digital asset infrastructure company that builds non-custodial trading infrastructure for institutional digital asset markets.

The Canton Network is a permissioned blockchain created by Digital Asset that allows regulated institutions to transact and settle tokenized assets onchain.

Institutional adoption accelerates on the Canton Network

The Canton Network drew increased institutional attention in late 2025, as companies announced new deployments involving tokenized funds, collateral and financing infrastructure.

In December, Franklin Templeton expanded its Benji tokenization platform to Canton, allowing its tokenized US government money market fund to be used as collateral within Canton’s institutional ecosystem. The fund held $828 million in assets at time of writing, according to industry data.

Tokenized US Treasury Funds. Source: RWA.xyz

On Dec. 9, Canton Network's creator, Digital Asset, and a group of major financial institutions completed a second round of onchain US Treasury financing on Canton. The trial showed that tokenized Treasurys can be reused as collateral in real time, highlighting how blockchain-based infrastructure can reduce frictions in traditional collateral and financing markets.

About a week later, the Depository Trust and Clearing Corporation (DTCC) said it plans to mint a subset of US Treasury securities on the Canton Network, extending blockchain-based settlement into market infrastructure that processed $3.7 quadrillion in transactions in 2024.

On Wednesday, Digital Asset and Kinexys by JPMorgan announced plans to bring JPMorgan’s US dollar deposit token, JPM Coin, natively onto the network.

The Canton Coin (CC) has risen sharply recently. It is up more than 40% over the past two weeks and more than 80% over the past month, according to CoinGecko data at the time of writing.

Source: CoinGecko

Magazine: Davinci Jeremie bought Bitcoin at $1… but $100K BTC doesn’t excite him

Morgan Stanley has plans to launch a digital asset wallet in 2026 as the financial services giant continues expanding its crypto investment product offerings to clients. 

The wallet is built to support cryptocurrencies and real-world tokenized assets (RWAs), including stocks, bonds and real estate, with plans to support more assets over time, according to Barron's. 

In September, the company announced that it would allow users of the E*Trade brokerage platform, which it owns, to trade cryptocurrencies including Bitcoin (BTC), Solana (SOL) and Ether (ETH) in 2026.

The total value of tokenized real-world assets is broken down by asset class. Source: RWA.XYZ

Cointelegraph reached out to Morgan Stanley for comment but had not received a response at time of publication. 

The announcements show that crypto and blockchain technology are gaining widespread adoption from established financial institutions in the traditional finance world. 

Related: Morgan Stanley’s Bitcoin ETF could offer strategic value beyond inflows, analysts say

Morgan Stanley pushes further into cryptosphere

Morgan Stanley announced several crypto-related developments for 2026, including several crypto exchange-traded fund (ETF) filings. 

The company filed applications with the US Securities and Exchange Commission (SEC) on Tuesday to issue spot BTC and SOL ETFs, which would be “passive” investment funds tracking the spot price of these cryptocurrencies by holding them.

Morgan Stanley also filed for a staked Ether ETF on Tuesday that would hold spot ETH while staking an undisclosed portion of the fund’s ETH to earn staking income.

Morgan Stanley’s S-1 form for an Ethereum ETF. Source: SEC

Staking is the process of pledging or locking up tokens to secure proof-of-stake blockchain networks, which can either be done directly as a validator processing transactions or through third-party delegation with a staking services provider.

Users who stake tokens are paid in the token of the blockchain they are securing — not fiat currencies or stablecoins.

Morgan Stanley initially offered crypto investment products to wealthy clients with at least $1.5 million in investible assets. In October, the company pivoted to allow all clients to invest in crypto products.

The company began recommending “conservative” crypto allocations in October. Morgan Stanley analysts recommended up to a 4% allocation for higher risk portfolios geared toward growth and a 2% allocation for “balanced risk” portfolios.

Magazine: Solana vs Ethereum ETFs, Facebook’s influence on Bitwise: Hunter Horsley

Coincheck Group, the Nasdaq-listed holding company behind one of Japan’s largest cryptocurrency exchanges, has agreed to acquire a 97% stake in Canadian digital asset manager 3iQ from its majority owner, Monex Group.

The stock-purchase transaction values 3iQ at $111.84 million, using Coincheck Group shares priced at $4 each. Coincheck Group said it intends to offer the same terms to 3iQ’s minority shareholders, which would give it full ownership if the deal is completed. 

The deal is expected to close in the second quarter, subject to regulatory approvals and other customary conditions.

Founded in 2012, 3iQ is a Canada-based digital asset manager that provides regulated cryptocurrency exposure through traditional investment products. The company was an early entrant in exchange-listed crypto funds and later expanded into staking-based exchange-traded funds (ETFs) and managed crypto strategies primarily for institutional investors.

Coincheck is a Japan-based cryptocurrency exchange launched in 2014 that offers regulated retail trading and custody services. In December 2024, it became the first Japanese cryptocurrency exchange to list on the Nasdaq.

According to the announcement, the 3iQ deal follows Coincheck Group’s recent expansion through acquisitions, including its October purchase of Paris-based crypto prime broker Aplo SAS and its March acquisition of staking services provider Next Finance Tech Co., as the company builds out its institutional and international operations.

US-based crypto exchanges make acquisitions

Recent acquisitions by Coincheck reflect a broader effort by crypto exchanges to diversify revenue beyond trading fees and expand into adjacent businesses.

In 2025, US-based exchange Coinbase made several acquisitions spanning infrastructure, consumer products and derivatives.

Early in the year, the exchange acquired Spindle, a blockchain-based advertising platform, and the team behind Roam, a Web3-focused browser. In July, Coinbase bought Liquifi, a platform used by early-stage token projects to manage compliance and token distribution.

Coinbase agreed in May to acquire Deribit for $2.9 billion, one of the largest deals in the sector, expanding its global derivatives business. To close the year, the company acquired The Clearing Company, adding onchain prediction markets to its product offerings.

Kraken also made several acquisitions in 2025, buying futures trading platform NinjaTrader in May to expand into traditional derivatives for US customers, followed by the August purchase of Capitalise.ai, a no-code trading automation startup.

In December, the company agreed to acquire Backed Finance AG, bringing tokenized equities issuance and settlement into its product suite.

Source: RWA.xyz

Magazine: Davinci Jeremie bought Bitcoin at $1… but $100K BTC doesn’t excite him

BlackRock’s fresh round of Bitcoin (BTC) buying takes place alongside a sharp slowdown in long-term selling, a combination that points to cooling downside pressure after the recent market pullback in  Q4. 

Key takeaways:

BlackRock added nearly $900 million worth of Bitcoin in the first week of January, rebuilding exposure after an end-of-2025 drawdown.

Long-term Bitcoin holders are selling at their lowest rate since 2017, despite elevated prices.

Onchain data pointed to a possible accumulation phase among certain wallet cohorts.

Data from Lookonchain indicated BlackRock has accumulated Bitcoin for the past three days, adding 9,619 BTC valued at roughly $878 million. The asset management company currently holds about 780,400 BTC, worth $70 billion.

BlackRock’s BTC holdings. Source: Arkham Intelligence

BlackRock’s BTC holdings peaked on Nov. 30 at around 804,000 BTC. At the time, that position was valued at roughly $96.5 billion. Although holdings fell to 771,000 BTC by Jan. 1, BlackRock has swiftly added close to 9,000 BTC during the first week of January.

The institutional buying coincided with a notable shift among long-term holders. Bitcoin’s Exchange Inflow Coin Days Destroyed (CDD) metric on Binance has fallen to its lowest level since 2017, signaling that older coins are barely moving onto exchanges. 

Bitcoin exchange inflow CDD on Binance. Source: CryptoQuant

For context, long-term holder supply dropped from over 15 million in July 2025 to 13.6 million in November 2025. Over the past couple of months, the long-term supply has not decreased further. 

Signs of BTC accumulation as recent sellers step aside

Onchain data from CryptoQuant helps explain this shift. The SOPR Ratio, which broadly compares whether recent buyers and long-term holders are selling at a profit or loss, has dropped to levels associated with market resets. Newer participants are selling at losses, while long-term holders remain profitable and largely inactive.

Bitcoin SOPR LTH-STH dynamics. Source: CryptoQuant

This pattern reflects a clean-up phase after sharp rallies, where speculative positions unwind, and coins change hands at lower prices. With Bitcoin down roughly 20% to 25% from its highs, this dynamic can mark the early stages of accumulation, provided selling pressure from recent buyers continues to drop.

Related: Morgan Stanley’s Bitcoin ETF could offer strategic value beyond inflows, analysts say

Bitcoin’s unrealized profit/loss data points to a reset

Bitcoin’s Net Unrealized Profit/Loss (NUPL) added another layer of context. The metric currently sits near the 0.3 level, a zone that has historically marked transitions from recovery into more constructive market conditions. Holders, on average, are back in moderate profit, but the market remains far from the excess seen near major cycle tops.

Bitcoin net unrealized profit/loss. Source: CryptoQuant

This positioning suggests a cautious transition phase rather than a clear breakout. Confidence appears to be rebuilding, but broader confirmation on both onchain and market structure would be needed before a stronger move. 

Related: Bitcoin averages 100% return after down years: Will the pattern repeat in 2026?

Key takeaways

Korea’s crypto bill is stalled over stablecoin issuer rules.

The central bank wants banks to remain in control, often framed as a “51%” threshold.

Regulators and lawmakers fear a bank-only model would limit competition.

Firms are lining up, with Toss planning a won-backed stablecoin once rules are finalized.

South Korea’s next major crypto law is being held up by a seemingly simple question: Who gets to issue a won-backed stablecoin?

The proposed Digital Asset Basic Act has slowed as regulators clash over whether stablecoins should be treated as bank-like money or as a licensed digital-asset product.

At the center is the Bank of Korea’s push for a “banks-first” model, ideally through bank-led consortia with at least 51% bank ownership, arguing that stablecoins could, in their view, spill over into monetary policy, capital flows and financial stability if they scale too quickly.

The Financial Services Commission and lawmakers, meanwhile, are wary that a bank-dominated regime could materially limit competition and slow innovation.

The standoff is now expected to push the bill into 2026.

Why Korea cares about won-stablecoins

Stablecoins in South Korea are already important to local traders who move value into crypto markets, often via dollar-pegged tokens to access offshore liquidity. If stablecoin use scales, it could amplify cross-border flows and complicate foreign-exchange management, especially in a market where crypto participation and retail exposure are unusually high.

That is why the Bank of Korea continues to frame issuer rules as a “financial stability” decision. Officials argue that a cautious, staged rollout, starting with tightly regulated banks, reduces the risk of sudden outflows or a loss of control over how “private money” circulates.

At the same time, policymakers who want more companies to be allowed to issue won-backed stablecoins view the issue as one of competitiveness. If Korea does not build a trusted local option, users will continue to rely on foreign stablecoins, leaving the country with less regulatory visibility and fewer opportunities to grow a domestic stablecoin industry.

Did you know? In the 12 months through June 2025, stablecoin purchases denominated in Korean won totaled about $64 billion in South Korea, according to Chainalysis.

The regulatory backdrop

South Korea’s first major crypto regulatory act was the Act on the Protection of Virtual Asset Users. It is built around market safety, including the segregation and custody of customer funds, with banks designated as custodians for user deposits. The framework also mandates cold-wallet storage, criminal penalties for unfair trading and insurance or reserve requirements to cover hacks and system failures.

However, that “phase 1” framework is mainly focused on how exchanges and service providers protect users. The unresolved dispute lies in the next step, the proposed Digital Asset Basic Act, where lawmakers and regulators aim to define stablecoin issuance, supervision and issuer eligibility.

This is precisely where the bill is bogging down. When Korea tries to answer the question of who can issue stablecoins, the Bank of Korea and the financial regulator diverge.

Did you know? South Korea’s crypto rules require licensed service providers to keep at least 80% of customer assets in offline cold wallets to protect against hacks and theft.

Three institutions, three incentives

South Korea’s stablecoin standoff is ultimately a dispute over which institution should have primary responsibility when private money becomes systemically important.

The Bank of Korea is approaching won-backed stablecoins as a potential extension of the payments system and, therefore, as a monetary policy and financial stability issue. Its senior leadership has argued for a gradual rollout that begins with tightly regulated commercial banks and only later expands to the broader financial sector to reduce the risk of disruptive capital flows and knock-on effects during periods of market stress.

The Financial Services Commission views the same product as a regulated financial innovation that can be supervised through licensing, disclosure, reserve standards and ongoing enforcement, without hard-wiring the market to banks as the default winners.

That is why the FSC has pushed back against the idea that issuer eligibility should be determined mainly by ownership structure and why leaked and proposed approaches have reportedly examined multiple models rather than treating bank control as the only safe option.

Then there are lawmakers and party task forces, who are weighing political promises, industry pressure and the optics of competitiveness.

Some proposals have contemplated relatively low capital thresholds for issuers, which the central bank has described as increasing instability risks. Others argue that a bank-first regime could simply delay product market fit and push activity toward offshore dollar stablecoins.

Even the “51% rule” debate has a local twist. The Bank of Korea has warned that allowing non-bank corporates to take the lead could collide with Korea’s long-standing separation between industrial and financial capital.

Did you know? Major Korean exchanges such as Bithumb and Coinone added USDT/KRW trading pairs starting in December 2023, making stablecoins easier to access directly with the won.

The “51% rule”: What it is, why it exists and why it’s controversial

In its strictest form, the Korean media-dubbed “51% rule” suggests that a won-backed stablecoin issuer should be a consortium led by commercial banks, with banks holding at least a 51% ownership stake. This structure would effectively ensure that banks control governance, risk management and, crucially, redemption operations.

The logic is that if stablecoins begin functioning like money at scale, they can influence monetary policy transmission, capital flows and financial stability. A bank-led structure is intended to import prudential discipline from day one, including capital standards, supervisory culture, Anti-Money Laundering (AML) controls and crisis management, rather than attempting to bolt those safeguards on after a non-bank issuer has already reached systemic size.

The opposition is just as direct. The Financial Services Commission and pro-industry lawmakers argue that hard-wiring bank control into the rules could reduce competition, slow experimentation and effectively shut out capable fintech or payments firms that might deliver better distribution and user experience.

Critics also point out that mandatory ownership thresholds are an indirect way to regulate risk and not the only one, given the availability of reserve requirements, audits, redemption rules and supervisory powers.

It’s not just about who issues stablecoins

Even if South Korea ultimately allows non-banks to issue won-backed stablecoins, regulators still have plenty of levers to prevent the product from exhibiting shadow-bank-like risk characteristics.

The government’s draft approach has focused on reserve quality and segregation, steering issuers toward highly liquid, low-risk backing such as bank deposits and government debt. Reserves would be held through third-party custody and structurally separated from the issuer to reduce bankruptcy spillover.

Then there is the “money-like” principle of quick redemption at par. Publicly discussed proposals include clear redemption rules and tight timelines, which are designed to prevent a stablecoin from turning into a gated fund during periods of market stress.

Korea’s broader regulatory posture already points in this direction. The Financial Services Commission has been building a user-protection regime around custody standards and strict operational requirements, such as offline storage thresholds for customer assets, showing that regulators are comfortable setting concrete technical guardrails rather than relying solely on licensing decisions.

Industry pressure and what to watch in 2026

There is urgency. The regulatory standoff is unfolding while the market is already preparing for won-backed stablecoins.

Major commercial banks are gearing up for a bank-led model, while large consumer platforms and crypto-native players are exploring how they could issue or distribute a won-pegged token if the rules allow it. Multiple banks and major companies are reportedly positioning for this market even as the policy debate drags on.

Fintech firms, however, do not want to operate inside a bank-controlled consortium. Toss is a clear example. The company has said it is preparing to issue a won-based stablecoin once a regulatory framework is in place, treating legislation as the gate that determines whether the product can launch.

This push and pull is why delays matter. The longer Korea debates issuer eligibility, the more everyday stablecoin activity defaults to offshore, dollar-based infrastructure, and the harder it becomes to argue that the slow pace reflects a deliberate choice rather than lost time.

So, what happens in 2026? Scenarios under consideration include:

Staged licensing, with banks first and broader participation later, is an approach the Bank of Korea has publicly supported.

Open licensing with a “systemic” tier, where larger issuers face heavier requirements.

Bank-led consortia that are allowed but not mandatory, easing the fight over the “51% rule.”