Welcome to Crypto Week!

It's another week of incredible stablecoin ecosystem evolution. Institutional competition intensifies across global licensing regimes, and innovative yield-bearing alternatives challenge traditional dollar-pegged models. In the US, all eyes are on Congress, which is poised to pass the Genius act in the House and hopefully be signed into law before EOW. 

The momentum continues, with regulatory frameworks maturing and corporate strategies becoming increasingly sophisticated. Let jump in:

Key Highlights

• It’s Crypto Week in Washington: The GENIUS Act is advancing through Congress with rare bipartisan backing, marking a pivotal moment for stablecoin regulation in the U.S. The bill would establish clear rules for federally approved stablecoin issuers, putting pressure on unregulated giants like Tether and signaling Washington’s preference for bank-integrated digital dollar infrastructure. This is one of 3 blockchain bills in the House.

• Tokenized Treasuries Hit $7.4B: Tokenized Treasury holdings surged to $7.4 billion as traders increasingly ditch traditional stablecoins for yield-bearing alternatives, signaling a fundamental shift in how investors approach dollar-denominated digital assets and potentially reshaping the entire stablecoin landscape.

• 40+ Firms Race for Hong Kong Stablecoin Licenses: Over 40 companies are competing for Hong Kong's coveted stablecoin licenses, demonstrating unprecedented institutional interest in Asia's premier financial hub and validating the territory's regulatory framework as the global gold standard for stablecoin oversight.

• Ripple's Trust License Bid: Ripple's pursuit of a U.S. trust license is a massive strategic pivot that could redefine its stablecoin operations. If granted, it would provide direct access to traditional banking infrastructure and potentially position RLUSD as a major competitor to established players.

Regulatory Framework Evolution

Global regulatory momentum continues accelerating as central banks worldwide reassess their stablecoin oversight strategies. Korea's central bank is lobbying for an expanded role in stablecoin supervision, building on last week's developments where Treasury Secretary Scott Bessent declared markets would choose US-regulated stablecoins over CBDCs "all day, every day.” He’s not wrong about that sentiment in the US; there’s an anti-CBDC bill being considered in the House of Representatives called the Anti-CBDC Surveillance State Act, which would prevent the Federal Reserve from issuing a digital U.S. dollar. This preference for market-based solutions is spreading internationally, with Australia now considering whether to follow the US regulatory drift favoring stablecoins over central bank digital currencies.

The Bank of England has acknowledged tokenization and stablecoins as increasingly relevant to the broader financial system, marking a significant shift in institutional recognition. This follows the pattern we’re observing with traditional banking infrastructure rapidly integrating stablecoin capabilities, where banks could potentially unlock $10.1 trillion for Treasury markets through stablecoin adoption. We keep going back to this stat in numerous headlines each week because it’s such a staggering figure that can’t be ignored by the depository institutions who stand to benefit the most. 

And yet all of this still just feels like background noise to the biggest news in the digital asset industry: Bitcoin hits new all time highs (over $120k). Crypto week is off to a WILD start. 

Corporate Strategy and Market Innovation

Traditional financial institutions are executing increasingly sophisticated stablecoin strategies. Danal shares jumped 12% following their stablecoin trademark application, demonstrating how market participants value early positioning in the rising trend of digital dollars. This mirrors the broader trend with Mastercard and Visa accelerating stablecoin adoption by integrating PYUSD, USDC, and other stablecoins for global payments.

However, the most significant development involves yield-bearing alternatives challenging traditional stablecoin models. Tokenized Treasuries reaching $7.4 billion represent a fundamental market evolution; participants are increasingly seeking yield rather than simple dollar stability. This shift builds on the earlier observation that banks are eyeing Ethereum for stablecoin infrastructure, with 51% of stablecoins operating on the network. I see this a lot at BVNK, where most enterprises want to use the network with the most users and adoption. 

Corporate adoption continues expanding through strategic partnerships. Unicorn fintech Airwallex is building a dedicated stablecoin team despite apparent CEO skepticism, indicating institutional recognition of stablecoin inevitability regardless of personal and corporate preferences. This one made me chuckle as several of my colleagues have noticed Jack’s critical stablecoin takes. If you can’t beat ‘em, join ‘em! (I happen to think he’s also a brilliant marketer because any harsh critique of a huge trend baits a ton of social media engagement).  

Infrastructure Development and Security

Technical infrastructure continues to mature through strategic investments and partnerships. Tether's investment in Crystal Intelligence aims to boost stablecoin oversight capabilities, addressing regulatory concerns about transaction monitoring and compliance. This builds on the broader enforcement trends, including the Department of Justice's record $225 million USDT seizure.

Platform integration expanded with Trump-backed USD1 trading pairs going live on Tron's Sun.io, continuing the multi-chain expansion trends. However, security concerns persist, exemplified by DWF Labs-backed USDf experiencing depeg events amid questions about backing quality. This highlights ongoing risks in stablecoin offerings relative to the collateral backing them. I’m occasionally asked about the liquidity risks associated with stablecoins, and events like these highlight why I encourage enterprises to stick with more established issuers like Circle, Paxos, Paypal, and Tether. 

Payment infrastructure development accelerated this week through multiple partnerships. Next Generation selected Sumsub to power fraud prevention and KYC for stablecoin-driven payment ecosystems (fun fact, we use Sumsub at BVNK), while Primer and dtcpay partnered to support both fiat and stablecoin transactions. These developments complement the recent news of Binance Pay enabling 80+ French Riviera merchants to accept stablecoins instantly, demonstrating continued geographic expansion.

Funding activity continues to grow, with Cedar Money raising $9.9 million in seed funding specifically for stablecoin adoption initiatives. This continues the venture capital momentum from previous weeks, where stablecoin startup funding surpassed 2021 peaks as institutional money pours into the sector.

Crypto week is off to a great start and I’m excited to see how these developments continue to evolve the financial system toward greater accessibility and opportunity for everyone.

Curious to learn more about stablecoin infrastructure for your enterprise? Reply to this newsletter or send me an email at [email protected] to learn how BVNK’s payment platform can unlock faster settlement and global access with stablecoins. You can also follow me on X for more insights.