Tag:

Stablecoin

Trump-Backed USD1 to Supplant Tether, USDC as Top Stablecoin by 2028: Blockstreet

by admin August 31, 2025

In brief

Blockstreet is creating a complimentary ecosystem for USD1, the Trump-backed stablecoin.
Co-founder Kyle Klemmer believes that it will outmatch all other stablecoins by 2028.
World Liberty Financial’s WLFI governance token becomes tradable on Monday.

By the time U.S. President Donald Trump’s second term is over, USD1 will have become the world’s most dominant stablecoin, according to Blockstreet co-founder Kyle Klemmer.

“With the team, the backing, and just the overall excitement that the blockchain community has, I can certainly see USD1 being the most widely adopted stablecoin in the world by 2028,” he told Decrypt in a recent interview. “USDC is the first target.”

Blockstreet’s stated mission as a “USD1-native launchpad” is to amplify World Liberty Financial’s vision, and the firm has been tasked with integrating the stablecoin from the Trump family’s crypto venture into crypto and traditional markets. The little-known firm, which debuted in mid-July, is also “helping bank the unbanked,” Klemmer added.

Blockstreet co-founder Matthew Morgan, a former cannabis entrepreneur, is an advisor to World Liberty and serves as CIO at ALT5 Sigma Corporation. The financial infrastructure firm unveiled a crypto treasury strategy centered around World Liberty’s governance token earlier this month.

Klemmer’s prediction, and goal for USD1, could face a high bar. Although stablecoins are a $285 billion industry today, JPMorgan analysts expect the sector to grow to $500 billion by 2028. And Bernstein analysts foresee the market reaching $2.8 trillion in the next five years.

That’s not to mention stiff competition from existing players like Tether and Circle—the issuers of USDT and USDC, respectively—or new entrants like Citigroup and Bank of America that recently passed legislation could unlock. But Klemmer is optimistic about USD1’s chances, based on the amount of outreach he’s received so far.

“There’s a lot of people all around the world who are incredibly complimentary of what the current administration is doing,” he said of President Trump. “They’re very excited about what World Liberty is trying to accomplish with USD1. A lot of people, the first thing that they say is, ‘How can we help?’”

World Liberty debuted a year ago. While the project has yet to deliver on its initial promise of crypto borrowing and lending services, its USD1 stablecoin has been out since April, growing to $2.5 billion meanwhile, according to crypto data provider CoinGecko. For comparison, Tether’s USDT and Circle’s USDC are worth $71 billion and $167 billion, respectively.

Klemmer said USD1’s appeal isn’t limited to its technical capabilities, noting that some crypto users appreciate it in relation to the government’s shifting approach toward the industry.

“It stands for a change,” he said, in reference to USD1. “There’s a very large appetite of countries, sovereign wealth funds, and other larger bodies that see the opportunities that are presented with USD1 and relate to that.”

The token was tapped in May by Emirati state-owned investment firm MGX as its vehicle of choice for making a $2 billion investment in Binance, the world’s largest crypto exchange, which faced intense regulatory scrutiny under the previous White House administration.

U.S. Senator Elizabeth Warren (D-MA) was among lawmakers that slammed the setup as “shady,” claiming it’s a high-profile example of crypto-powered corruption. “If we don’t do it, China’s going to,” the president has said in defense of his broader crypto push.

So far, USD1 has been issued on Ethereum, BNB Chain, Tron, and Solana. The stablecoin has been adopted by some exchanges, including Coinbase and Binance, but he foresees everyday payments as a “more clear and pressing” use case for USD1 to solve.

World Liberty’s WLFI governance token, which has been limited to accredited investors since its debut, is scheduled to begin trading on Monday, as the token becomes transferable. Some analysts have warned of potential losses for retail investors, citing its high fully-diluted value.

Klemmer said Blockstreet is still waiting on a clear game plan for USD1’s rollout, but he said that he’s aware of some “very lofty goals” that the team behind World Liberty has.

“It’s the fastest-growing stablecoin to date, and I think it will continue to be the fastest-climbing stablecoin of all time,” Klemmer said, “until it surpasses Tether and takes its place.”

Daily Debrief Newsletter

Start every day with the top news stories right now, plus original features, a podcast, videos and more.

Source link

August 31, 2025 0 comments

GameFi Guides

Stablecoin Platform M0 Raises $40 Million in Series B Round

by admin August 31, 2025

In brief

M0 raised $40 million in Series B funding.
The firm separates stablecoin reserve management from programmability.
M0 is supporting the debut of MetaMask’s mUSD stablecoin.

Switzerland-based stablecoin platform M0 raised $40 million in Series B funding, as it seeks to shake up the relationship between token issuers and blockchain developers, according to a press release on Thursday.

The funding round, which included Polychain Capital, Ribbit Capital, and the Endeavor Catalyst fund, also saw participation from existing investors like Pantera and Bain Capital Crypto, M0 said. The firm has now raised $100 million since its establishment in 2023.

The development comes as several firms aim to capitalize on a stablecoin boom by positioning themselves as a conduit to the crypto space for companies in the traditional business world, following this year’s passage of stablecoin regulation in the U.S.

“Centralized issuance and simple white-labeling models are far from enough,” M0 co-founder and CEO Luca Prosperi said in a statement. “We want to empower the builders of great fintech products to actually control the digital dollar stack they utilize.”

The company says it has a “first-principles” approach to stablecoins by separating stablecoin reserve management from programmability. That means regulated entities manage the assets backing stablecoins on M0’s platform—like cash and U.S. Treasuries—while developers can use M0 to define who can create, hold, and move the assets.

Stablecoins that debut through M0’s platform are application-specific, and M0 said that its platform surpassed $300 million in aggregate supply in July, more than doubling from January.

M0’s platform will support the debut of MetaMask’s mUSD stablecoin, M0 said. The team behind the self-custodial wallet signaled a week ago that its dollar-pegged token would be debuting on Ethereum and the layer-2 scaling network Linea later this year. (Disclosure: MetaMask parent company Consensys is one of 22 investors in Decrypt, which retains editorial independence.)

M0 highlighted other builders on its platform, including the token protocol Noble, stablecoin protocol Usual, gaming operating system Playtron, and payments firm KAST.

Stablecoin platform Bridge, which was acquired by payments giant Stripe for $1.1 billion last year, was integrated into M0’s platform as its first U.S.-regulated issuer, M0 said on X earlier this month.

Bridge is set to provide licensing and monitoring for mUSD, in addition to reserve management, but M0 noted that other firms can tap Bridge by issuing stablecoins through its platform.

Daily Debrief Newsletter

Start every day with the top news stories right now, plus original features, a podcast, videos and more.

Source link

August 31, 2025 0 comments

Crypto Trends

Stablecoin Dominance Drops To 60%

by admin August 31, 2025

Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure

Based on recent figures, USDT dominance dropped to nearly 60% on August 29. It is the weakest hold Tether has had since March 2023.

Nevertheless, USDT’s market cap is $168 billion and Circle’s USDC is $70.37 billion — both all-time highs. So the physical magnitude of the coins is greater, but the share of the market under each’s control is moving.

Rising Competitors Make Inroads

According to figures from DefiLlama, the first half of 2024 saw USDT dominance at approximately 70%. USDC then had around 18% of the market.

That figure has risen and is now at approximately 30%. DAI, which used to capture about 3.5%, has dropped to 1.85%. These adjustments indicate money is transferring between stablecoins and not exiting the space.

Source: DefiLlama

One New Token Stands Out

Ethena’s USDe stands out. Introduced in December 2024, USDe already has 4.32% dominance with a market capitalization of $12.25 billion.

That’s a quick ascent for a token that had just come out late last year. Trump-associated World Liberty Financial’s USD1 holds 0.88% market share.

Data have revealed those figures together with the bigger market-cap numbers for USDT and USDC, which makes it clear: competition is increasing while total numbers rise.

Source: DefiLlama

Regulatory Pressure Shapes Markets

Tether’s market share loss isn’t merely about competitors. It has also refused to implement Europe’s MiCA stablecoin regulations, and exchanges deleted USDT from certain European listings.

The US has enacted the GENIUS Act that includes new transparency obligations for stablecoin issuers. Those reforms make compliance an even larger consideration in who captures market share in the future.

Total crypto market cap currently at $3.71 trillion. Chart: TradingView

Investors Are Choosing Options

Some institutions and traders appear to like stablecoins that are backed by issuers that commit to new regulations. Others are experimenting with newer tokens or models that offer alternative types of backing or schemes.

That is one reason why USDC’s share is expanding rapidly and why smaller tokens such as USDe can acquire share rapidly. But the absolute expansion of USDT and USDC indicates the industry as a whole is growing even if its internal composition shifts.

Market Share Is Not Static

This phase should remind readers that market share can shift even when totals rise. USDT’s drop to 60% is meaningful because it marks the first time since March 2023 that dominance touched these levels.

It also points to a market where compliance choices, product design, and fresh entrants all matter.

Featured image from Unsplash, chart from TradingView

Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.

Source link

August 31, 2025 0 comments

NFT Gaming

Fintech Rain Raises $58 Million to Fuel Stablecoin Push on Visa Network

by admin August 30, 2025

In brief

Stablecoin fintech Rain has raised $58 million.
The Visa-backed company, which issues cards, has raised a total of $88.5 million from big backers like Sapphire Ventures, Dragonfly, Galaxy Ventures, and Samsung Next.
Stablecoins are a hot topic since President Donald Trump signed the GENIUS Act.

Stablecoin-backed card company Rain, which partnered with Visa this year, has raised $58 million as part of a series B funding round, the company said in an announcement Thursday.

The raise brings the company’s total funding to $88.5 million. Rain, which closed its A round five months ago, said the money would be used to grow the firm’s platform and “give global institutions the most flexible, modular, and compliant stablecoin infrastructure available.”

Venture capital firm Sapphire Ventures led the funding round, with Dragonfly, Galaxy Ventures, Endeavor Catalyst, Samsung Next, Lightspeed, and Norwest also contributing.

“Stablecoins are shifting to the backbone of global commerce,” Rain CEO and co-founder Farooq Malik said. “In its earliest form, money moved instantly. We’ve spent centuries slowing it down.”

Rain this year partnered with Visa to push ahead with its stablecoin-linked cards.

In the release, Rain said that is intent on making stablecoins “instantly usable anywhere Visa is accepted through its physical and virtual card programs, processing millions of transactions across 150+ countries.”

The company said that it had grown transaction volume by tenfold this year with such portfolio partners as Nuvei, Avalanche, Dakota, and Nomad using Rain infrastructure for merchant payouts, everyday consumer purchases, B2B spend, and cross-border payroll.

Visa has been making major inroads into the crypto space, particularly with stablecoins. In April, it partnered with Bridge, a unit of payment services provider Stripe, to offer stablecoin-linked debit cards in Latin American countries. In 2021, it announced that it supported USDC on Ethereum.

Stablecoins are digital tokens running on blockchains that are pegged to non-volatile assets, usually dollars. With a stable value, such cryptocurrencies were previously used by traders to enter and exit digital asset trades without the need for banks.

But now, banks, major companies, including Meta and Amazon, and even U.S. states are all interested in issuing the tokens, which are supposed to accelerate payments leveraging blockchain technology.

U.S. President Donald Trump in July signed the GENIUS Act into law, establishing a framework for issuing and trading stablecoins in the U.S.

“Stablecoins have scaled to hundreds of billions in circulation, but until now, they couldn’t be easily spent,” said Sapphire Ventures President Jai Das, who will join Rain’s board. “Rain is working to fix that by connecting stablecoins to Visa’s global network, turning them into money you can actually use for everyday commerce.”

Daily Debrief Newsletter

Start every day with the top news stories right now, plus original features, a podcast, videos and more.

Source link

August 30, 2025 0 comments

NFT Gaming

Tron Cuts Network Fees By 60% To Strengthen Position In Stablecoin Market

by admin August 30, 2025

Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure

The Tron (TRX) network has made headlines by approving a significant reduction in transaction fees, cutting them by up to 60% following a majority vote within the community, as rising fees have been seen as a barrier to user participation and ecosystem development.

Fee Adjustments On Tron

The proposal to lower fees was driven by rising transaction costs that have accompanied an increase in TRX’s value, the network’s native token, which has doubled since 2024.

The proposal alleged that while higher fees are essential for the Tron network’s overall security and stability, they have also eroded Tron’s competitive edge, making it imperative to adjust them.

The increase in TRX prices has led to a corresponding rise in fees for transactions, particularly affecting Tether’s USDT stablecoin and other contracts on the platform.

As a result, the earlier 50% reduction in energy unit prices, established by a previous proposal, has been negated, prompting this latest response from the Tron Super Representative community.

The 1-D chart shows TRX’s price trending upwards despite the overall market correction. Source: TRXUSDT on TradingView.com

As of this writing, TRX trades at $0.33, up by 107% year-to-date, being in the top performers in the cryptocurrency market during the same period, outpacing tokens like Bitcoin (BTC), Ethereum (ETH) and other altcoins such as Solana (SOL) and Cardano (ADA).

Short-Term Profit Impact Expected

Justin Sun, the founder of Tron and a prominent figure in the crypto space, announced this decision on social media platform X (formerly Twitter). He highlighted that the upcoming fee reduction will be the largest fee cut since the network’s inception back in 2017 along with the TRON Foundation.

Sun alleged that in the short term, this reduction is expected to impact the networ’s profitability, given that the network relies on transaction fees as a primary revenue source.

However, Sun expressed confidence that the long-term benefits would outweigh these initial drawbacks. By encouraging increased user engagement and higher transaction volumes, Tron aims to foster a more vibrant ecosystem that ultimately enhances profitability.

To ensure that the fee structure remains competitive and sustainable, the network’s Super Representative community plans to conduct quarterly reviews of network fees.

These assessments will take into account various factors, including fluctuations in TRX prices, levels of network activity, and overall growth rates. In his social media post, Sun further stated:

On August 26, 2025, the Tron Super Representative community proposed to reduce Tron network fees by 60%. This is the largest fee reduction since the founding of the Tron network. The proposal has already passed and will take effect at 20:00 (GMT+8) this Friday

Featured image from DALL-E, chart from TradingView.com

Source link

August 30, 2025 0 comments

NFT Gaming

Bluprynt completes first KYI verification of a global stablecoin with USDC

by admin August 29, 2025

Bluprynt, an embedded compliance and blockchain infrastructure solutions platform, has completed a know your issuer verification of USDC, the first such milestone with a global stablecoin.

Summary

Bluprynt announced the successful completion of know your issuer for Circle’s stablecoin USDC.
Stablecoin regulation is among top areas of focus for regulators amid global adoption.

Bluprynt announced on Aug. 29 that it successfully conducted a Know Your Issuer verification for USDC (USDC), the stablecoin issued by Circle. It’s a major step in the move to establish a KYI benchmark, with authenticity and compliance transparency key to the global adoption of digital assets across finance.

The U.S.-based platform, whose compliance solutions are powered by artificial intelligence, achieves KYI verification by “cryptographically binding Circle’s verified identity and mint authority directly to USDC tokens at the point of issuance.”

Verification ensures investors, custodians and financial institutions can instantly authenticate the USDC stablecoin’s provenance.

Crypto and stablecoin regulation

With regulators, including the Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation and U.S. Securities and Exchange Commission increasing their regulatory oversight as they demand for stronger provenance, Blueprint’s significant milestone is even more notable.

According to Bluprynt chief executive officer Chris Brummer, USDC is not just a stablecoin ready for the regulation under the OCC, FDIC and SEC, but also an asset set against future compliance challenges.

“What we need are cryptographically native solutions that are fit for purpose, combining ease with rigor,” Brummer noted. “KYI embodies this principle by offering regulators and issuers a practical, verifiable tool to strengthen trust and transparency in digital finance.”

USDC, pegged to the U.S. dollar, is the world’s second largest stablecoin by market capitalization behind Tether (USDT).

Circle’s stablecoin boasts a market cap of over $70 billion while USDT stands at around $167 billion, and the two companies account for nearly two thirds of revenue across crypto.

As stablecoins hit the global adoption stage, compliance has become a key requirement. This trend has seen Circle take a proactive approach towards meeting required guidelines, including as laid out in stablecoin frameworks such as the European Union’s MiCA and the GENIUS Act in the U.S.

Source link

August 29, 2025 0 comments

NFT Gaming

Bitcoin Liquidity Weakens As Stablecoin Growth Down To $1.1B

by admin August 28, 2025

Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure

Data shows stablecoin market cap expansion has slowed to just $1.1 billion recently, signaling weakening liquidity for Bitcoin and other coins.

Stablecoin Market Cap Growth Is Significantly Down Compared To Earlier Highs

According to data from on-chain analytics firm CryptoQuant, stablecoin growth has been cooling recently. “Stablecoins” refer to cryptocurrencies that have their price tied to a fiat currency, with US Dollars being the most popular option.

Investors generally store their capital in the form of these tokens when they want to avoid the volatility that comes with coins like Bitcoin. Many holders who buy into stables, however, eventually plan to venture back into the volatile side of the market. Since stablecoins can potentially be swapped into BTC and other assets, their supply can be looked at as a sort of available “dry powder” for the cryptocurrency sector. As such, expansions in this supply can prove to be a bullish sign.

Now, here is the chart shared by CryptoQuant that shows the trend in the 7-day change in the market cap of the major USD-based stables over the past year:

Looks like the stables have been observing a positive change in their market cap in recent days | Source: CryptoQuant on X

As displayed in the above graph, the late 2024 bull run was accompanied by a sharp positive change in the market cap of the stablecoins. At the peak, these assets observed weekly net inflows of around $7.7 billion. Another wave of inflows occurred in January of this year, with the metric peaking at $6.6 billion. Since then, the market has seen a cooldown in interest, with inflows into stables staying far from the earlier highs.

From the chart, it’s visible that the sharp burst in capital flows earlier this month could only manage a top of $4.8 billion. The interest also lasted quite briefly, and inflows disappeared soon after. At present, the metric is sitting at $1.1 billion, implying the market cap of the stablecoins is still growing, but clearly, the rate at which it’s happening isn’t close to the previous bull rally.

“Liquidity tailwinds are weaker, limiting Bitcoin’s upside momentum,” explains the analytics firm. It now remains to be seen how long the muted stablecoin inflows would last and whether a pivot to outflows would follow next.

In some other news, the Relative Unrealized Loss held by Bitcoin investors is still quite low even after the latest price decline, as on-chain analytics firm Glassnode has pointed out in an X post.

How the Relative Unrealized Loss has changed for the BTC network over history | Source: Glassnode on X

The Relative Unrealized Loss is a measure of the total unrealized loss held by the Bitcoin investors represented as a percentage of the market cap. At present, the metric’s value stands at just 0.5%, which is quite low compared to past bear markets.

BTC Price

At the time of writing, Bitcoin is floating around $113,400, up almost 2% over the 24 hours.

The trend in the BTC price over the past five days | Source: BTCUSDT on TradingView

Featured image from Dall-E, Glassnode.com, CryptoQuant.com, chart from TradingView.com

Source link

August 28, 2025 0 comments

Crypto Trends

Mastercard expands stablecoin push with Circle partnership

by admin August 27, 2025

Mastercard and Circle partnered to enable stablecoin settlements for merchants across Europe, the Middle East, and Africa.

Summary

Mastercard and Circle will enable settlement across the EEMEA region
USDC and EURC settlements happen instantly, with lower fees

Credit card giant Mastercard is deepening its involvement in stablecoins. On Tuesday, August 26, Mastercard and Circle partnered to enable USDC and EURC settlement for acquirers across Eastern Europe, the Middle East, and Africa.

“This is a key move for Mastercard. Our strategic goal is to integrate stablecoins into the financial mainstream by investing in the infrastructure, governance, and partnerships to support this exciting payment evolution from fiat to tokenized and programmable money,” Dimitrios Dosis, president, Eastern Europe, Middle East, and Africa, Mastercard.

The move means that Mastercard acquirers across the EEMEA region will be able to settle payments in Circle’s stablecoins. These companies, also called acquiring banks, connect merchants to the Mastercard payments network, collecting payments from customers and settling the funds with the merchants.

“Our expanded partnership with Mastercard will enable wider reach, global access, and scaled impact, so that USDC can become as ubiquitous as traditional payments. Together with Mastercard, we are advancing the role of stablecoins as a foundational tool for everyday financial activity worldwide,” Kash Razzaghi, Chief Business Officer at Circle.

Unlike traditional payments, stablecoin settlements can move instantly, with lower fees. Stablecoin payments can also be automatically programmed for specific purposes.

Mastercard backs stablecoin post-GENIUS Act

Following the passage of the U.S. GENIUS Act, credit card giant Mastercard has announced its intention to get more involved in the stablecoin business. Notably, the company hopes to leverage its reputation and existing connections to play a key role in the emerging ecosystem of stablecoin payments.

On July 17, the company praised stablecoins for their role in cross-border payments and remittances as a fast and low-cost alternative to traditional banking.

Source link

August 27, 2025 0 comments

Crypto Trends

Tokyo’s Monex Considers Launching Domestic Yen Stablecoin

by admin August 26, 2025

Tokyo-based publicly traded financial services company Monex Group is considering a Japanese yen-pegged stablecoin.

According to a Tuesday TV Tokyo report, Monex Group Chairman Oki Matsumoto told the outlet that the company is considering issuing a yen-pegged stablecoin in Japan.

“Issuing stablecoins requires significant infrastructure and capital, but if we don’t handle them, we’ll be left behind,” Masumoto said. He concluded:

“We will respond properly.”Oki Matsumoto. Source: Wikidata

Related: Japan’s finance Minister endorses crypto as portfolio diversifier

Monex’s upcoming stablecoin

Monex Group’s stablecoin, should it issue one, would be backed by assets such as Japanese government bonds. Like many other stablecoins, it would be redeemable 1:1 with yen and is expected to be used for purposes such as international remittances and corporate settlements.

The company plans to leverage its ownership of local crypto exchange Coincheck and its Monex securities brokerage to expand the initiative. Matsumoto further revealed that Monex is considering acquiring European crypto-related companies, hinting at a possible announcement “within a few days.”

Final negotiations for the acquisition of candidate European crypto companies are reportedly underway. This would further expand the Monex Group’s Western presence, following the public debut of Coincheck Group, Coincheck’s parent company, on the Nasdaq stock exchange at the end of last year.

Related: Japan’s ‘slow’ approval culture stifles crypto adoption: Expert

Japanese stablecoins are within arm’s reach

The news follows recent reports that Japan’s Financial Services Agency (FSA) is preparing to approve the issuance of Japanese yen-denominated stablecoins as early as this fall. This would be the first time the country has allowed a domestic fiat-pegged digital currency.

This follows Circle’s USD Coin (USDC), a US dollar-pegged stablecoin, being approved for use within Japan in late March. The report followed a cryptocurrency subsidiary of the Japanese financial conglomerate SBI developing support for USDC just as local stablecoin rules began softening.

The changes in the local stablecoin ecosystem started after Japan lifted the ban on foreign stablecoins in 2023. In February of this year, the FSA approved a report from a working group recommending policy changes that ease stablecoin-related regulations.

Magazine: Stablecoins in Japan and China, India mulls crypto tax changes: Asia Express

Source link

August 26, 2025 0 comments

GameFi Guides

U.S. banks move to amend GENIUS stablecoin Act over “loophole”

by admin August 25, 2025

Major banking groups in the United States are pushing to change certain provisions of the recently passed GENIUS stablecoin Act, citing concerns over aspects of the law that could affect the traditional financial industry.

Summary

U.S. banking groups are lobbying lawmakers to reconsider certain provisions of the GENIUS stablecoin Act.
Banks argue that the current structure creates an uneven playing field that could threaten the future of traditional financial institutions.
Crypto industry groups have pushed back, stating that the provisions are a necessary feature to support innovation and maintain consumer choice.

On Aug. 25, the Financial Times reported that U.S. banking groups are actively lobbying lawmakers to reconsider certain provisions of the GENIUS legislation.

Passed earlier in July, the GENIUS Act marked the first official stablecoin law in the United States, set out to regulate the billion-dollar market and maintain the country’s dominance in the sector. Part of the regulation prevents issuers from directly paying interest or yield to stablecoin holders, a measure intended to protect stability in the system.

This provision means that while banks can issue their own stablecoins, they are prohibited from offering any interest. In contrast, crypto exchanges can still provide rewards to holders of third-party stablecoins, such as Circle’s USDC (USD Coin) or Tether (Tether). The groups describe this provision as a “loophole” that indirectly favors crypto exchanges over traditional banks, warning that it could prompt customers to shift deposits from banks to platforms offering higher returns, creating an uneven playing field.

The groups cited an April Treasury report that estimated stablecoins offering yield could move as much as $6.6 trillion away from the traditional banking system, warning that such outflows could jeopardize the stability of the banking sector.

However, representatives from the crypto industry have reportedly pushed back against the banks’ campaign, arguing that the concerns are overstated.

Crypto industry pushback: GENIUS Act “loophole” is not a flaw

Advocacy groups, including the Crypto Council for Innovation and the Blockchain Association, have argued that the “loophole” described in the GENIUS Act by the banks is not a flaw, but a necessary feature to maintain competition and innovation in the sector.

They contend that restricting exchanges from offering rewards to stablecoin holders would unfairly protect banks while limiting consumer choice. Industry figures like Coinbase’s chief legal officer, Paul Grewal, have also condemned the concerns, emphasizing that the industry should be allowed to evolve without unnecessary restrictions.

The GENIUS stablecoin has been celebrated as a regulatory milestone for the industry, championing the long-awaited clarity for the asset class. However, the ongoing dispute underscores the tensions emerging as rules take shape, highlighting the need for a careful balance to ensure both innovation and stability.

Source link

August 25, 2025 0 comments