Ethereum Takes the Lead and Banks Take the Hint

Spoiler alert: banks are going to win the stablecoin race.

It was another week of historic stablecoin milestones, as Tether's supply exceeded $180 billion and major Wall Street banks explored joint stablecoin initiatives. 

Stripe's infrastructure platform launch and America's first federally regulated stablecoin marked significant institutional validation amid growing regulatory scrutiny from global authorities. Let’s dive in. 

Key Highlights

• Tether USDT Supply Tops 180 Billion as Ethereum Flips Tron: Tether's USDT supply exceeded 180 billion, with Ethereum overtaking Tron as the dominant network. The stablecoin giant is eyeing the $200 billion milestone, demonstrating unprecedented market growth.

• Major Banks Explore Joint Stablecoin Initiative: Bank of America, Citigroup, and Goldman Sachs are among the major financial institutions exploring a collaborative stablecoin project. This project represents Wall Street's coordinated effort to establish institutional digital dollar infrastructure.

• Stripe Unveils Open Issuance Platform: Stripe launched Open Issuance, enabling rapid stablecoin creation and signaling the company's strategic positioning as an infrastructure provider for the next generation of digital currency deployment.

Market Leadership and Infrastructure

Tether's USDT supply surpassed $180 billion as Ethereum overtook Tron to become the dominant stablecoin network, positioning the issuer toward a $200 billion milestone. This network shift demonstrates institutional preference for Ethereum's infrastructure despite higher transaction costs, validating the platform's security and decentralization advantages. I’m glad to see Ethereum overtake Tron because despite Tron’s popularity, I think Ethereum is a way better network in terms of decentralization and its culture. 

Stripe unveiled Open Issuance, enabling rapid stablecoin creation and fundamentally transforming how companies deploy digital currencies. This infrastructure platform tries to position Stripe as the backbone for next-generation stablecoin deployment, similar to how its payment processing infrastructure powers modern e-commerce. Congrats to the team! 

Circle emphasized USDC as the most trusted stablecoin in regulated financial markets, while analysts argue that Circle is the premier stablecoin investment opportunity. Projections suggest USDC will "supplant fiat" in the $20 trillion cross-border payments market, indicating a massive addressable market opportunity.

Nansen CEO declared that "the dollar on blockchain" represents crypto's biggest success story, validating stablecoins' practical utility over speculative applications. DWS recognized stablecoins emerging as a core payments infrastructure, while Safe and Circle collaborated to establish USDC as the industry standard through multisig smart account integration. Despite crypto’s cipher punk origins, it’s clear that fiat on the blockchain is a great product market fit. 

MIT professors emphasized that stablecoin success depends on interoperability, highlighting technical coordination requirements across fragmented blockchain ecosystems for mainstream institutional adoption. I’m at the ABA banking conference (pic below related) and I can tell you interoperability of stablecoins is a theme I’m seeing across all banking discussions about stables. 

Banking Integration and Regulatory Framework

Speaking of banking…

Bank of America, Citigroup, and Goldman Sachs explored joint stablecoin initiatives, representing unprecedented Wall Street coordination in digital currency development. This collaborative approach addresses regulatory concerns while establishing institutional-grade infrastructure competing with existing stablecoin issuers.

Paxos claimed that trust company-issued stablecoins represent the "safest" path for global finance, emphasizing regulatory oversight advantages. Anchorage Digital Bank onshored USDtb as America's first federally regulated stablecoin, marking a historic regulatory milestone that established compliance precedents for future issuance. I’ve seen this argument playout before, the problem with trust company’s arguing that their stables are better than their alternatives is that the market has voted and they prefer USDC and Tether, not Paxos dollar or USDtb. Obviously USDtb is the newer entrant but Paxos dollar has been around a long time and has never reached the critical mass that USDC has. We’ll see what happens. 

According to co-founder Zach Abrams, Stripe's stablecoin unit Bridge applied for national bank trust charters, indicating strategic positioning for comprehensive banking regulatory oversight. Bank of North Dakota partnered with Fiserv to launch state stablecoin initiatives including the Rough Rider coin (which I wrote about last week), demonstrating sovereign digital currency development at the state level. Mark my words: banks will be the winners in the stablecoin race. 

However, regulatory scrutiny intensified globally. Bank of England Governor Bailey vowed stronger international action on stablecoin risks, while the IMF flagged stablecoins as a potential $305 billion "crypto timebomb" threatening global financial stability. Tether's $300 million Celsius claims settlement raised stablecoin liability concerns, highlighting ongoing legal and regulatory complexities. Crypto is already a bad word in TradFi circles, but when you add the word “tImE bOmB”, it’s clear your intent is to spook bank executives. 

But don’t let that scare you - I think banks are going to be the best positioned to win the stablecoin race as every issuer is pursuing a bank license.

Corporate Expansion and Technical Innovation

Canadian stablecoin consortiums developed collaborative frameworks addressing domestic regulatory requirements and market infrastructure needs. Maestro's audited indexer unlocked lending and stablecoin capabilities on Bitcoin networks, expanding functionality beyond Bitcoin's native limitations.

Legend Trading secured MiCA licenses in Ireland while unveiling Legend FXN as a regulated stablecoin-to-fiat settlement hub. Visa Direct piloted stablecoin prefunding, modernizing cross-border business payments and demonstrating how traditional payment networks integrate digital dollar infrastructure. We do something similar at BVNK, email me if you’re interested in learning more. 

Consumer applications expanded with Stripe, enabling subscription payments through stablecoins, fundamentally transforming recurring payment infrastructure. FGA Trust expanded custody capabilities for Hong Kong stablecoin issuers, while S&P Global leveraged Chainlink for stablecoin peg stability ratings, bringing traditional credit analysis methodologies to digital assets. Chainlink is one of my favorite projects in the industry, always exciting seeing their newest developments. 

Taiwanese stablecoin infrastructure company OwlTing secured Nasdaq listings, validating international capital markets' recognition of digital currency infrastructure companies as legitimate investment opportunities comparable to traditional fintech platforms.

The convergence of 180 billion supply milestones, major bank collaboration, and comprehensive regulatory framework development confirms stablecoins' evolution into essential global financial infrastructure requiring sophisticated compliance architectures and institutional-grade security protocols.

Stay tuned for next week's issue as we continue tracking this transformative landscape.

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