Original Title: "Cobo Stablecoin Weekly Report No. 17 | Stablecoins Impact the US Banking System, PayPal Building Intermediary-Free Payment Infrastructure"

Welcome to the 17th edition of the Cobo Stablecoin Weekly Report.

The passage of the "GENIUS Act" marks a new stage in US crypto legislation. The controversy surrounding the "CLARITY Act" in both houses of Congress has revealed two regulatory philosophies: one focusing on functional definition and generality, while the other concentrates on financial nesting and the stablecoin system itself.

Faced with the impact of stablecoins, the banking system has begun to respond, from restructuring distribution paths and introducing on-chain credit collateral to outsourcing interest rate generation to tokenized assets. It is evolving towards modularity and interoperability to adapt to the era of on-chain asset participation in liquidity generation.

PayPal, on the other hand, has chosen to bypass banks and directly build a unified interface between digital assets and fund flows. In the future, through PYUSD and PayPal World, it may package clearing, settlement, remittance, user entry points, and merchant networks, attempting to establish a crypto-native payment stack that does not require a bank intermediary.

In the rapidly moving capital landscape, value is shifting from intermediation costs and scarcity to speed of flow, composability, and network effects. A new financial order is reorganizing itself among interfaces.

Market Overview and Growth Highlights

Total stablecoin market capitalization reached $265.217 billion, with a weekly increase of $4.502 billion. In terms of market structure, USDT continues to maintain its dominant position with a 61.8% share, while USDC ranks second with a market cap of $64.807 billion, accounting for 24.44%.

Blockchain Network Distribution

Top three stablecoin market cap networks:

1. Ethereum: $132.37 billion

2. Tron: $81.992 billion

3. Solana: $11.592 billion

Top 3 Fastest Growing Networks of the Week:

1. TON: +7.85% (USDT share 79.49%)

2. Hedera: +6.96% (USDC share 99.86%)

3. Polygon: +5.60% (USDT share 43.29%)

Data source from DefiLlama

From Distribution to Credit Creation to Financial Engineering: Stablecoins Are Permeating the Banking System

With the implementation of the GENIUS Act, stablecoins have begun to continuously penetrate the core architecture of the traditional banking system.

The collaboration between PNC and Coinbase marks the official endorsement of stablecoins as a "distribution channel" by traditional financial institutions. Customers can directly buy, sell, and custody crypto assets within the banking interface. The tokenized money market fund launched by Goldman Sachs and BNY Mellon has atomized the traditional core financial asset of "USD + Treasury Bonds" and migrated it to the blockchain, shifting the role of banks from passive custodians to active native on-chain asset issuers. Stablecoins are rewriting the technical structure of the front end of banking systems, redefining the entry standards for "programmable dollars."

More structurally significant is JPMorgan Chase's plan to include Bitcoin and Ethereum in the collateral list for issuing USD loans. This action fundamentally incorporates on-chain assets into the M2 generation path, allowing crypto assets to participate in the banking credit creation system. When on-chain assets become collateral for the US dollar, stablecoins are no longer just a "digital shadow" of traditional finance but part of the currency creation system.

Anchorage's USDtb model demonstrates sophisticated financial engineering. The USDtb issued by Anchorage does not directly bear interest obligations but outsources interest generation to BlackRock's tokenized money market fund product, BUIDL, and then channels the interest to token holders through custody logic. This architecture cleverly redefines "interest" as a natural attribute of the underlying asset rather than a legal obligation of the stablecoin itself, thereby circumventing the SEC's regulatory definition of "yield-bearing tokens." In this model, stablecoins essentially become a "yield-wrapping interface," reconstructing functional relationships within institutional gaps.

This series of developments shows us a trend: for banks to embrace stablecoins, they must accept functional decoupling and layered design. The traditionally integrated financial system is being dismantled into recomposable on-chain modules for compliance, interest-bearing functions, custody, and trading, among others.

Stablecoins are forcing the banking system to evolve into a modular, programmable financial infrastructure. A set of financial LEGO bricks that can be arbitrarily recombined is the possible future state of banking.

PayPal Launches Global Payment Interconnect Platform PayPal World, Incorporating Stablecoins and AI Proxy Shopping into Its Strategic Framework

PayPal has announced the launch of the global payment interconnect platform PayPal World, aiming to reshape the cross-border payment network structure and global business interaction paradigm. As a "payment network aggregator," PayPal World's initial integrations include Mercado Pago, India's UPI, WeChat Pay International Tenpay Global, and its own PayPal and Venmo, covering nearly 2 billion consumers and merchants globally. By unifying integration to bridge multiple "walled gardens," merchants can access and reach a global audience in one go, significantly reducing the technological barriers to payment compatibility. Users can also complete cross-border transactions within local payment tools without switching apps.

The key to this product integration lies in PayPal's first integration of the P2P-focused Venmo with the B2C commercial payment network, bridging the personal and business scenarios to form a collaborative closed loop. Through PayPal World, this integration is further extended globally, enabling seamless cross-border remittances for individuals as if sending a message and allowing merchants to instantly receive funds from any payment ecosystem, establishing an Account-to-Account (A2A) settlement path.

This evolution is driven by the modernization of the payment infrastructure through cloud computing and API standardization. By deconstructing the high-cost intermediaries in the traditional payment chain (correspondent banks, card networks, SWIFT, etc.), PayPal is transitioning from a meshed interconnection to a lower-friction, more programmable A2A architecture. Looking ahead, the next stage may move towards the blockchain, building a more automated, 24/7, low-cost clearing and settlement channel to serve new types of settling entities like AI agents.

From a long-wave historical perspective, the value logic of finance is undergoing a shift: from arbitrage mechanisms relying on geographic barriers and physical frictions to an efficiency paradigm centered around compressing "time in transit" of funds. PayPal World is a structural response to this trend. In this new paradigm, stablecoins will become part of the infrastructure. If A2A is the starting point, then stablecoins are the extension of that path, with the ultimate goal being a high-frequency, low-latency, composable capital network.

PayPal has explicitly advanced its stablecoin strategy and AI Agent payment layout, even willingly sacrificing traditional fiat float interest income to incentivize users to convert their balances to PYUSD, enhancing ecosystem stickiness and liquidity. Its growth model is also shifting from fee-driven and stock revenue to high-frequency circulation and network dominance evolution.

The significance of PayPal World may be understood as an experiment in "post-friction capitalism." In this stage, value no longer comes from owning scarce resources or intermediary fees but from the speed of fund movement, composability, and network effects. The traditional bundled package of payments (clearing, settlement, remittance, fees) is being unbundled, then reconstructed around digital assets (such as PYUSD) and unified interfaces (such as PayPal World).

The Future of Cryptocurrency Regulation in the U.S.: CLARITY Act and the Regulatory Philosophical Divide

As the GENIUS Act establishes a stablecoin regulatory framework, U.S. cryptocurrency legislation is entering the next phase. The recently passed Digital Asset Market Clarity Act by the House of Representatives attempts to further clarify regulatory boundaries and establish a set of division standards centered around "control": platforms holding user assets and having an intermediary nature will face stringent regulation, requiring them to comply with KYC, AML, fund segregation, and other regulatory constraints; while truly decentralized protocols where users interact directly with smart contracts will receive exemptions, reflecting a structural response to risks seen in platforms like FTX.

The Senate's bill presents a different regulatory philosophy. This version introduces the concept of an "ancillary asset," referring to tokens that are issued through investment contracts but do not inherently represent equity or ownership rights. Issuers can self-certify to the SEC that these tokens are non-securities, and if the SEC does not object within 60 days, they can be treated as commodities. While the House emphasizes control rights and platform roles, the Senate focuses more on whether the tokens themselves possess financial rights attributes, with an overall orientation towards providing an operational compliance path for issuers.

The divergence between the two chambers in defining standards essentially reflects a different judgment on "what should be regulated": a focus on regulatory focal points or on regulating financial attributes. This difference not only involves ideology but also directly impacts the allocation of regulatory authority—the House version is primarily under the CFTC, while the Senate retains the SEC's initial screening authority. Future regulations may not be a single-framework coverage but may present a multi-layered system based on ownership structure, governance, and asset attributes.

The two chambers are expected to reach a compromise text before the resumption of Congress in September. Even if the final legislation is not promptly passed, this round of negotiations has revealed a tiered trend in U.S. digital asset regulation—following stablecoins, core areas such as DeFi, ICOs, and platform intermediaries will gradually enter the institutional track, and their path choices will determine the direction and discourse power of the U.S. in the global encrypted financial order.

Market Adoption

Polygon USDC Transfer Volume Surges 141%, Mainly Driven by South America

Key Takeaways:

· Year-to-date, small USDC transfers (below $1,000) on the Polygon network have surged by 141%, surpassing Solana in such transfers and becoming the primary blockchain for processing small USDC payments

· Aishwary Gupta, Global Head of Payments and Real-World Assets at Polygon Labs, stated that the Tron network's transaction fees have significantly risen (from $3.3 a year ago to over $7 now), prompting users to seek alternative solutions, with USDC transfers on Polygon costing only a fraction of a penny

· The growth is primarily from the South American region, especially users in Argentina and Brazil, with nearly 50% of stablecoin transfers in Argentina using USDC

Why It Matters:

Amid a 27% expansion of the stablecoin market this year to reach a historic high of $2.62 trillion, Polygon is repositioning itself as a payment and real-world asset tokenization platform. While Tron still commands 60% of stablecoin trading volume with over $810 billion in stablecoins, compared to Polygon's mere $28 billion, the high transaction fees on Tron have created a market opportunity for Polygon, especially in the realm of everyday micropayments in developing countries. With Standard & Poor's predicting the stablecoin market to reach $2 trillion by 2028 and Bernstein estimating a potential growth to around $4 trillion over the next decade, Polygon's payment strategy may place it advantageously as Wall Street and traditional financial institutions enter the stablecoin space.

U.S. Seventh-Largest Bank PNC Partners with Coinbase

Key Points:

· PNC Bank, with $557 billion in assets, and crypto exchange giant Coinbase have announced a strategic partnership aimed at expanding digital asset solutions for PNC clients (including institutional investors) and enhancing banking services.

· PNC clients will soon be able to directly buy, hold, and sell cryptocurrencies through the PNC Bank interface, with the service supported by Coinbase's institutional-grade Crypto as a Service (CaaS) platform, ensuring secure transactions and custody.

· As a mutually beneficial collaboration, PNC will provide its top-tier banking services to Coinbase while Coinbase will contribute its professional crypto trading and custody tools to PNC, leveraging each other's strengths to enhance customer experience.

Why It Matters:

· This partnership marks a significant milestone in the trend of convergence between traditional finance and the crypto industry. The entrance of the seventh-largest U.S. bank into crypto services will greatly enhance the accessibility and legitimacy of digital assets in the mainstream financial system. Following in the footsteps of large banks like JPMorgan Chase exploring crypto asset services, PNC's move further confirms that the U.S. banking industry is rapidly embracing digital assets to provide convenient cryptocurrency access channels for retail and institutional investors, significantly expanding the potential user base of cryptocurrencies.

Global Remittance Giant Western Union Explores Launching Stablecoin Services in Digital Wallets

Key Points:

· Global remittance giant Western Union is seeking to integrate stablecoins into its digital wallet infrastructure, with company CEO Devin McGranahan stating in an interview with Bloomberg that they are exploring partnerships to provide stablecoin deposit and withdrawal services.

· McGranahan views stablecoins as an opportunity rather than a threat, and the company is evaluating how to offer stablecoin products to customers in its global digital wallet

· Western Union sees three key opportunities for stablecoin services: enabling faster cross-border transfers, facilitating the conversion between stablecoins and fiat currency, and providing a value store for customers in volatile economies

Why It Matters:

· Following President Trump's signing of the GENIUS Act, stablecoins have gained mainstream acceptance. Western Union, as a leader in the traditional remittance industry, entering the stablecoin space demonstrates the acceleration of the financial services industry's transition to digital assets. The GENIUS Act established a federal regulatory framework for stablecoins, requiring stablecoins to be fully backed by the U.S. dollar or other highly liquid assets and imposing annual audit requirements on issuers with a market cap exceeding $500 billion. Western Union, a traditional financial giant with 175 years of history, embracing stablecoins will bring significant changes to the cross-border payment market, particularly offering customers in volatile economies a more stable and faster financial service option.

Macro Trends

Latin America Quietly Undergoing Financial Transformation, Cryptocurrency Offering Freedom to the Unbanked

Key Highlights:

· Chainalysis' 2024 report indicates that strict capital controls and hyperinflation rates exceeding 100% in countries like Argentina and Venezuela are driving cryptocurrency adoption, with people increasingly relying on digital wallets and stablecoins to access the U.S. dollar

· The unbanked population in Latin America is staggering, with over 50% in Mexico, 43% in Peru. Cryptocurrency is providing these groups with a financial services channel that bypasses the traditional banking system

· A lack of financial literacy and regulatory uncertainty are major barriers, emphasizing the importance of community-driven education and clear policy frameworks. Brazil and Colombia have already established VASP licensing systems

Why It Matters:

· Cryptocurrency adoption in Latin America is fundamentally reshaping the financial landscape, offering financial freedom to historically excluded low-income, rural, and minority groups from the traditional banking system. As governments in Mexico, Brazil, and other countries collaborate with crypto firms to develop regulatory frameworks, and regions like Costa Rica foster "crypto tourism," digital assets are poised to lower cross-border payment costs (current U.S. remittance costs are as high as 6.4%) and enhance financial inclusivity. This trend has a significant impact on the economic independence and reduction of wealth disparity in the Latin American region, but the ability to build a truly inclusive infrastructure remains a key challenge.

BofA Predicts GENIUS Act Will Drive Stablecoin Market Growth by $750 Billion

Key Takeaways:

· Bank of America's report states that with President Trump signing the GENIUS Act, US stablecoin regulation has reached a turning point, and the short-term stablecoin supply could increase by $250-750 billion

· The bank is prepared to issue its own stablecoin, leaning towards an alliance model. BofA CEO Brian Moynihan has stated that the bank is ready to enter the stablecoin market at the right time

· Analysts expect consolidation in the stablecoin industry in the next 2-3 years, with broader adoption of stablecoins and other tokenized assets following the passage of the CLARITY Act

Why It Matters:

· The GENIUS Act is driving a transformation of the US financial system, with banking giants entering the scene to reshape the stablecoin market landscape. The growth of stablecoin reserves may impact US Treasury bond demand, prompting the Treasury Department to adjust its short-term debt issuance strategy. Despite the gradual rise of cross-border applications, most bank executives believe stablecoins will not disrupt the domestic payment system in the short term. The current total value of the stablecoin market is around $2700 billion, and BofA's predicted growth is equivalent to a 9-28% increase, reflecting financial institutions' optimistic expectations for the market outlook post-regulatory clarity.

New Product Update

Circle's USYC Becomes Binance Institutional Client OTC Collateral

Key Takeaways:

· Circle has announced a partnership with Binance, where its yield-generating US Treasury bond token USYC is now available as collateral for Binance institutional client OTC derivative trades, mimicking practices in traditional financial markets

· USYC will be held through Binance Banking Triparty or its institutional custody partner Ceffu and will be issued natively on the BNB Chain, allowing users to seamlessly explore the on-chain world

· USYC offers nearly instantaneous interchangeability with USDC, enhancing capital efficiency, enabling users to convert near real-time between tokenized cash and treasuries, meeting the market trend of doubling demand for US Treasury bond tokenization since 2025

Why It Matters:

· This partnership represents a significant step towards bridging the institutional-grade crypto market with traditional financial practices. The integration of Circle's US Treasury bond token USYC with the world's largest exchange Binance provides institutional investors with a new avenue for optimized collateral management and yield generation, while also driving the expansion of the tokenization ecosystem for real-world assets. This trend showcases the accelerated convergence of crypto finance with traditional financial infrastructure, especially in the innovation of capital market tools.

Square Initiates Rollout of Bitcoin Payment System, Aiming for Full Adoption by 2026

Key Highlights:

· Square, founded by Jack Dorsey, has begun introducing Bitcoin payment capabilities for its merchant network, with initial merchants now able to accept BTC payments via the Lightning Network

· Payments are settled near-instantly through the Bitcoin layer-two solution Lightning Network, with Square handling the BTC-to-fiat conversion to lower the barrier for merchant adoption

· Square plans to have this service available to all merchants using its point-of-sale terminals by 2026, with the system undergoing a pilot at the Bitcoin 2025 conference in Las Vegas in May of this year

Why It Matters:

· Square has positioned the Lightning Network as the core technology to accelerate Bitcoin payment adoption, addressing a historical key barrier of slow Bitcoin transaction speeds. The Lightning Network, by establishing micropayment channels, enables transactions to be processed off-chain, significantly enhancing transaction speeds and reducing costs. As a payment giant, Square's move will greatly drive the practical application of Bitcoin as an everyday payment tool, providing millions of merchants with crypto payment options, while lowering the technical hurdles for merchants to accept cryptocurrency. This initiative is poised to be a significant milestone in mainstreaming Bitcoin payments.

Circle Launches Circle Gateway, Introducing New Infrastructure for Unified USDC Cross-Chain Balance

Key Highlights:

· Circle has unveiled the Gateway service, allowing users to instantly access a unified USDC balance on Avalanche, Basis, and Ethereum testnets without the need for traditional cross-chain bridging or pre-deployed funds

· The service provides sub-500ms fast cross-chain access while maintaining non-custodial nature, with users holding full control over USDC, and funds can only be moved through user signatures

· Circle plans to launch this service on the mainnet soon and has developed a comprehensive chain extension roadmap to support more blockchain networks in the future

Why It Matters:

· As a novel cross-chain infrastructure, Circle Gateway addresses a key pain point in current DeFi cross-chain operations. By providing liquidity across multiple chains through a single integration, it significantly reduces operating capital requirements and improves fund efficiency. This service represents a significant advancement in stablecoin infrastructure, promising to enhance user experience and mitigate cross-chain operation risks. Due to USDC's dominant position in the realm of crypto payments, this innovation could serve as a key catalyst in driving Web3 cross-chain interoperability standards.

Goldman Sachs and BNY Mellon Launch Tokenized Money Market Fund, BlackRock and Fidelity on Board

Key Highlights:

· BNY Mellon Bank has launched a tokenized money market fund via the LiquidityDirect platform, with ownership records and transactions taking place on the Goldman Sachs digital asset platform blockchain. BlackRock and Fidelity have signed on to participate

· BNY, as the world's largest custodial bank (managing $53 trillion in assets), will act as a fund shareholder service provider, custodian, and tokenization manager, responsible for token minting and burning

· The size of the tokenized U.S. Treasury market has reached $7 billion year-to-date, tripling from the previous year, but it represents only a small fraction of the $7 trillion total money market fund market. Considering the seamless and efficient trading enabled by tokenization, this market segment shows tremendous growth potential.

Why It's Important:

· This collaboration signifies that traditional financial institutions are rapidly adopting blockchain technology applications. The tokenized money market fund is competing on the same track as stablecoin issuers, vying for the market of "digitizing traditional USD funds and investing in treasuries to earn returns." Banks are both issuers of tokenized products (tokenized MMFs, tokenized deposits) and critical infrastructure providers for fund flows between crypto and traditional finance, and their strategic choices will have a profound impact on the overall market landscape. This trend will enhance institutional liquidity management efficiency while providing significant growth momentum and credibility endorsement for tokenizing traditional asset markets.

JPMorgan to Launch Cryptocurrency Collateralized Loan Service as Early as 2025, Lending Rates May Face Downward Pressure

Key Points:

· JPMorgan plans to launch a dollar loan service that accepts cryptocurrencies such as Bitcoin and Ethereum as collateral as early as 2025, having previously allowed clients to use Bitcoin ETFs as collateral for loans

· The current size of the crypto lending market is $36.5 billion (lower than the peak of $64.4 billion during the 2021 bull market), with Tether, Galaxy Digital, and Ledn holding a 90% share of the non-DeFi lending market, and DeFi platforms providing $19.1 billion in loans

· Industry experts predict that with the entry of traditional financial giants like JPMorgan, cryptocurrency collateralized loan rates, currently above 12.5%, will see a significant decrease, potentially eventually aligning with home equity loan rates or personal lines of credit

Why It Matters:

· The world's largest bank, JPMorgan, stepping into the crypto lending space signals an industry-wide acceleration towards mainstream finance. CEO Jamie Dimon, who once called Bitcoin a "fraud," is now embracing crypto assets, reflecting an improvement in the regulatory environment and institutional demand growth. The global nature of Bitcoin as a universal collateral will make such loan products globally competitive, not limited to developed countries, offering more equitable financial service opportunities to crypto holders worldwide. This move may trigger other major banks to follow suit, accelerating the integration of crypto assets with the traditional financial system.

Capital Deployment

Figma Plans Auction-Based IPO to Raise $1.03 Billion, S-1 Filing Unveils Tokenized Stock Authorization Terms

Key Points:

· Following the regulatory halt of a $20 billion acquisition deal with Adobe, Figma shifts towards an independent IPO, intending to issue 12.47 million new shares and 24.46 million shares for resale, at a price range of $25-28 per share, with a valuation of up to $13.6 billion

· The company opts for an "auction-based IPO" over a traditional roadshow inquiry, requiring investors to submit limit orders to specify purchase price and quantity, aiming to gain more genuine market feedback and maximize the company's fundraising capability

· Figma disclosed in its SEC-filed S-1 document the ability to "pre-authorize the issuance of blockchain common stock," leaving room for future introduction of tokenized equity, although there are no immediate plans, indicating its forward-looking layout in equity structure and capital tools

Why It Matters:

· The return of Auction-based IPOs signifies that the primary market pricing mechanism is iterating towards higher efficiency and fairness, avoiding the systematic underpricing issue seen in traditional IPOs. More importantly, Figma's reserved tokenized equity space indicates that tech companies are exploring a new path for digitalizing their capital structure. This may bring near-public market liquidity features to unlisted equity, broadening investor access through on-chain settlement, global reach, and fractionalized trading. As one of the potentially largest tech IPOs this year, Figma's financing innovation sets an example for the next phase of tech company funding paradigm shift.

Regulatory Compliance

Anchorage to Issue First GENIUS Act-Compliant USDtb Stablecoin

Key Takeaways:

· The U.S.'s first federally chartered crypto bank, Anchorage Digital, has announced the issuance of Ethena Labs' USDtb stablecoin within the U.S. borders, marking the first stablecoin specifically designed to comply with the new GENIUS Act.

· USDtb is an interest-bearing U.S. dollar token, primarily collateralized by BlackRock's BUIDL and crypto assets to maintain a 1:1 peg to the U.S. dollar, as opposed to a traditional reserve model. Since its overseas issuance in December last year, it has locked in a value of $1.45 billion.

· Through this partnership, USDtb will enter the federal regulatory framework for the first time, with Anchorage providing a full suite of infrastructure for minting, redemption, and compliant distribution, making it a "fully regulated digital dollar."

Why It Matters:

· The domestic issuance of USDtb marks a significant milestone in the U.S. stablecoin market, not only validating the effectiveness of the GENIUS Act but also signaling that interest-bearing, compliant digital dollar products will be a core trend in future financial innovation. Anchorage's move places it in the same competitive race as existing USD stablecoin issuers like Circle, PayPal, as well as traditional banks exploring tokenized deposits, such as JPMorgan Chase and Citigroup. This competition will center around who can better provide a compliant, efficient, interest-bearing, and trusted digital dollar.

Post-GENIUS Act Cryptocurrency Tax Rules Remain Unchanged, Taxed as Property

Key Takeaways:

· Despite the introduction of the GENIUS Act and the CLARITY Act passed by the House of Representatives, the IRS still considers cryptocurrency as "intangible property" for taxation purposes, maintaining the tax position established in 2014

· Cryptocurrency assets are not subject to securities wash sale rules and do not enjoy the 1256 tax treatment for commodity trades, with the only exception being Bitcoin futures contracts, which can benefit from a 60/40 capital gains split and year-end mark-to-market valuation

· The GENIUS Act focuses on reserve, audit, and disclosure requirements for stablecoin issuers, while the CLARITY Act clarifies the regulatory scope of the SEC and CFTC, but neither changes the tax classification of cryptocurrency assets

Why It Matters:

· The unchanged tax rules present pros and cons for traders. Cryptocurrency investors can continue to take advantage of the lack of wash sale rules for more flexible tax-loss harvesting but are unable to choose mark-to-market valuation under Section 475 or benefit from a 20% QBI deduction. Bitcoin ETF investors (such as Nasdaq IBIT, CBOE's FBTC) are still considered direct holders of property for tax purposes. This indicates that even as the regulatory framework becomes more robust, cryptocurrency tax rules still require specific legislative adjustments, and traders should develop tax strategies accordingly.

Polymarket Predicted to Acquire CFTC License to Re-enter the U.S. Market or Launch Its Own Stablecoin

Key Takeaways:

· Polymarket acquires the Florida-based exchange QCEX holding a CFTC license and its clearing entity QC Clearing for $112 million, providing a legal pathway to re-enter the U.S. market and serving U.S. users as a "licensed platform"

· Polymarket's political prediction market's liquidity and trading volume have surpassed many traditional derivatives platforms, particularly showing active performance before the U.S. election, indicating a strong demand from users for a compliant and efficient prediction platform

· Polymarket is considering issuing its own stablecoin as the second growth engine for platform value chain integration, internalizing interest income from user transaction funds to enhance the profit model and increase fund retention and user stickiness

Why It Matters:

· With the expected return of the Trump administration and a more open CFTC regulatory environment, the prediction market is transitioning from a niche tool to mainstream financial infrastructure. Polymarket's compliance strategy has demonstrated that in an era where high-frequency trading and information warfare converge, platforms with deep liquidity, regulatory pathways, and fund control will continue to capture user mindshare. The "prediction market + proprietary stablecoin" model will create a more robust ecosystem within the regulatory framework, building a lasting competitive advantage for the next market cycle.

Gauntlet Proposes Building a Sustainable On-Chain Regulatory Framework to Balance DeFi Regulation and Innovation

Key Takeaways:

· Breakthrough in U.S. crypto regulation: the first cryptocurrency bill signed into law, GENIUS Act passed in both houses, SEC Chairman considering providing "innovation exemptions" for DeFi intermediaries and issuers

· Gauntlet team proposes a regulatory framework based on managing $13 billion in assets: 1) Recognize the fundamental differences of DeFi in terms of self-custody, permissionless architecture, and traditional finance; 2) Establish clear standards including disclosure requirements and safe harbor provisions

· Regulation needs to focus on three key areas: disclosure and transparency (clear risk disclosure), accountability and liability (assigning responsibility based on direct control), self-custody system compliance (developing monitoring standards suitable for an intermediary-free environment)

Why It Matters:

· The current financial regulatory framework is designed based on a traditional intermediary model and cannot adapt to the new paradigm of DeFi's permissionless, self-custodial, and trustless transactions. As DeFi continues to reshape the financial landscape, establishing balanced regulatory rules that protect consumers and foster innovation is crucial. Reasonable regulation will enhance ecosystem sustainability, security, broader institutional adoption, while maintaining DeFi's core advantages of cost reduction, friction elimination, and universal financial access. The traditional American values of free enterprise, individual autonomy, and property rights align closely with DeFi's vision, providing a unique opportunity to establish a forward-looking regulatory framework.

Tether CEO Confirms Significant Progress in U.S. Market Positioning, Plans to Launch Institutional-Grade Stablecoin

Key Takeaways:

· Tether CEO Paolo Ardoino said in a Bloomberg interview that the company's plans to enter the U.S. market are "progressing smoothly" and expects to announce specific initiatives for the institutional market in the coming months

· This announcement comes just after President Trump signed the GENIUS Act last week, which established a federal framework for U.S. stablecoin regulation, requiring large stablecoin issuers to undergo annual audits

· Tether had previously revealed plans in April to launch a U.S.-based stablecoin designed specifically for institutional clients, focusing on providing faster settlement services, distinguishing it from its current globally largest USDT (market cap of $162 billion)

Why It Matters:

· Tether's entry into the U.S. market signifies the response and adaptation of the world's largest stablecoin issuer to the new regulatory framework. With the signing of the GENIUS Act, the U.S. stablecoin market will see a more standardized development environment and will also face strong competition from traditional financial institutions collectively owned by JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo. While Ardoino acknowledges that they may be at a disadvantage in the short term, he emphasizes that Tether has better technology and market understanding. At the same time, Tether's newly appointed CFO is leading efforts to achieve a full audit, which will enhance its compliance and credibility in the U.S. market. Unlike its competitor Circle, Tether has explicitly stated that it has no intention to go public, showing its unique strategic positioning.

Hong Kong Monetary Authority to Release Stablecoin Rules Next Week, HKMA Chief Warns Against Overhyping Stablecoins

Key Takeaways:

· The Hong Kong Monetary Authority will release a summary of stablecoin issuer rules next week, while HKMA Chief Eddie Yue warns of excessive market exuberance

· Several listed companies merely announcing intentions to venture into the stablecoin business have led to price surges and increased trading volumes, but HKMA will initially only approve a few stablecoin licenses

· HKMA emphasizes that even with a license, due to considerations of steady development and the initial resource investment required, there is uncertainty regarding the short-term profit contribution of stablecoin businesses to companies

Why It Matters:

The Hong Kong stablecoin regulatory framework is about to be implemented, but the HKMA has issued a clear warning against market "hype," indicating that regulatory authorities will adopt a cautious stance. Investors need to calmly assess the valuation of relevant companies and avoid blindly following the trend. This also implies that Hong Kong will adhere to a prudent approach in developing the virtual asset ecosystem, with license issuance being highly stringent, providing important decision-making references for market participants.

American Bankers Association Opposes Circle, Fidelity, and Ripple Obtaining Trust Bank Charters

Key Takeaways:

· Five banking associations, including the American Bankers Association, wrote to the OCC opposing the applications of Circle, Fidelity Digital Assets, Protego Trust, and Ripple for a national trust bank charter

· The banking associations criticized these crypto and stablecoin companies for not disclosing sufficient information for public comment, stating that 90% of the content in the applications of Circle and Ripple had been redacted

· The associations believe that these applications are essentially a "backdoor" approach to becoming a national bank, requesting the OCC to delay approval until the applicants disclose more details of their business plans

Why It Matters:

· The tension between the banking industry and the crypto industry is once again highlighted, with traditional financial institutions attempting to prevent crypto companies from entering the regulated financial system through a trust bank charter. The OCC's decision will directly impact the compliance path and business expansion capabilities of major stablecoin issuers like Circle, while also reflecting the challenges that regulatory agencies face in balancing innovation and financial stability. If crypto companies successfully obtain the charter, it will substantially enhance their legal status and competitiveness in the U.S. financial system.

Tether Assists in Freezing $1.6 Million USDT Related to Terror Funding

Key Takeaways:

· Tether announced that it assisted U.S. authorities in freezing and reissuing approximately $1.6 million USDT, which was linked to the BuyCash financial network in Gaza, a network allegedly associated with terror funding activities

· This action is part of a larger-scale civil forfeiture case by the U.S. Department of Justice, involving around $2 million used to support digital assets of designated terror groups

· Tether has assisted global law enforcement agencies in freezing over $2.9 billion USDT related to illicit activities, supporting more than 275 enforcement agencies in 59 jurisdictions, with over 2,800 wallets frozen through collaboration with U.S. agencies alone

Why It Matters:

The close cooperation between Tether and law enforcement agencies demonstrates the advantage of blockchain transparency in combating financial crimes. Unlike the traditional financial system, USDT transactions can be traced, frozen, and recovered, providing a new tool to combat terror financing. As the largest stablecoin issuer, Tether has shown compliance determination through proactive regulatory cooperation, which helps improve its regulatory image and enhance the legitimate status of stablecoins in the global financial system.

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