Original Title: "Cobo Stablecoin Weekly Report 20 | US Stablecoin Full-scale War: Banks, Data, and a $66 Trillion Deposit Defense Battle"

Welcome to the 20th edition of the Stablecoin Weekly Report.

The main theme of this week can be summed up in just one word — Stablecoin War.

The battlefield mainly consists of several fronts:

Firstly, there is the counterattack from banks. As stablecoins rapidly penetrate the banking system, banks are defending their deposit base while also trying to monetize user financial data access, creating a new "moat" around their services.

Another front is at the Fintech giant Stripe. Following the backend integration (acquiring Bridge) and frontend enhancement (acquiring Privy), Stripe is now directly entering the battlefield by building its own Layer 1 from scratch. This has sparked debates on centralization versus decentralization and challenged the narrative that "TradFi transactions will occur on Ethereum." However, in terms of competitive landscape, Stripe is actually targeting Visa and SWIFT's market — essentially competing for market share in the payment network.

From an optimistic perspective, this is still a positive development for the crypto industry. After all, this is a multi-billion dollar market, and for every additional on-chain user, the entire crypto ecosystem gains more market capitalization support.

Market Overview and Growth Highlights

Total Stablecoin Market Cap reached $273.463 billion, with a weekly increase of $3.759 billion. In terms of market share, USDT continues to dominate at 60.43%; USDC comes in second with a market cap of $66.793 billion, accounting for 24.42%.

Blockchain Network Distribution

Top Three Stablecoin Networks by Market Cap:

· Ethereum: $138.595 billion

· Tron: $82.891 billion

· Solana: $12.091 billion

Top 3 Networks with the Fastest Weekly Growth:

· StarkNet: +60.40% (USDC accounts for 91.91%)

· XRPL: +24.88% (RLUSD Dominance 51.25%)

· Hyperliquid L1: +17.59% (USDC Dominance 95.61%)

Data source: DefiLlama

The Battle of Data and Deposits Between Banks and the Crypto Industry Amid Stablecoin Disruption

As stablecoins accelerate their penetration into the banking system, the competition between banks and the crypto and fintech sectors has escalated from "cooperation" or "opposition" to a systemic game in dimensions such as data, funds, and regulation.

In the data field, open banking has become a new conflict frontline. JPMorgan Chase (JPMC) announced in July this year its plans to charge high data access fees to data aggregators like Plaid and made it clear that if new fee agreements are not accepted, customer account information will "no longer be accessible." This has been seen as a pressure tactic to force fintech companies to accept new business terms. At the same time, JPMC has also halted the re-entry of the cryptocurrency exchange Gemini, labeled by its co-founder as "Operation ChokePoint 2.0."

This series of actions indicates that large banks are attempting to reshape industry rules by raising data access costs, with blocking APIs being the ultimate bargaining chip. Executives from fintech and crypto companies such as Klarna, Robinhood, and Gemini jointly petitioned the Trump administration to prevent such fee models to avoid hindering market competition and the mainstream adoption of the crypto industry.

Another battle revolves around the "Deposit Defense War" regarding stablecoin interest. The Bank Policy Institute (BPI) has pushed for amendments to block exchanges and affiliated entities from circumventing the distribution of earnings, directly naming models like Coinbase and PayPal. The reason given is that yield-bearing stablecoins may siphon off trillions of dollars in deposits during an economic downturn, impacting credit creation and financing costs. Banks are attempting to lock up funds through legislation, while crypto platforms are keeping the earnings mechanism within a compliance framework to enhance the attractiveness of stablecoins and compete for deposit substitutes. Under the U.S. stablecoin interest prohibition order, yield-bearing stablecoins can still pass on returns from underlying assets to users through financial engineering, challenging the banks' control over value distribution and customer relationships.

The core of these two battles is banks leveraging their monopoly resources in the traditional system – data and deposit bases – to build new entry barriers to restrict the market space of emerging competitors. Regulation has become a primary tool in the struggle: banks are trying to shape moats through rules, while fintech and crypto companies leverage regulation to promote openness and anti-monopoly practices.

If banks succeed in the data competition, stablecoin enterprises will face higher operating costs; if banks gain the upper hand in the fund competition, the competitive advantage of stablecoin yields will be weakened. Whichever outcome, it will directly shape the competitive landscape between on-chain finance and traditional finance.

AI, Stablecoin, and Custom Chain: Stripe's Blueprint for the Future of Payments

Another battle unfolded this week around the "payment blockchain," moving beyond the debate between centralization and decentralization to the choice of underlying architecture. Both Stripe and Circle have successively launched their own Layer 1 blockchains, directly challenging the Ethereum L2 solutions that have dominated the mainstream narrative for years. While the expectation was that traditional financial giants would leverage Layer 2 solutions like Rollups to access the crypto ecosystem, they have now both chosen to build their own underlying networks, bypassing existing scaling solutions to control the foundation of transactions and settlements.

Externally, this move may seem like a natural extension of giants pursuing their own interests, but such an interpretation overlooks a deeper strategic logic. Building a custom blockchain is a necessary step for Stripe as it navigates the dual waves of stablecoins and AI, upgrading from a payment gateway to a data and smart services platform. Stablecoins are rapidly penetrating banking, merchant, and consumer systems at an unprecedented pace, driving a restructuring of payment and settlement architecture. Previously, Stripe had already laid out its stablecoin front-end and back-end services (acquiring Privy and Bridge), and the launch of Tempo integrates issuance, distribution, and clearing, directly competing with SWIFT's cross-border settlement and Visa/Mastercard's card payment clearance systems.

The goal of launching Tempo is not merely to replace existing rails but to provide Stripe's core customers—merchants—with on-chain payment infrastructure that balances performance, cost, and compliance. In a context where general-purpose public blockchains struggle to meet supply chain and cross-border settlement needs, Tempo can utilize permissioning and zero-knowledge proofs to achieve sub-second settlement and stable fees, bypassing external network rules and natively capturing end-to-end transaction data. This data not only provides high-quality material for AI risk control and credit modeling but can also be transformed into value-added services, filling the gap in transaction profits post stablecoin impact on the quadripartite model.

From a higher perspective, Stripe's custom chain aims to deeply integrate the payment network with the data network, elevating payments from a low-margin basic function to a programmable enterprise operations infrastructure. Controlling the underlying chain means flexible adjustments to performance and regulatory rules while combining on-chain settlements with AI value-added services to create an operational and data-driven closed-loop advantage. This layout is not only about cost efficiency but also about the future of business relationships and data ownership.

Despite concerns from the outside about centralized "walled gardens," optimistically, this will bring in more compliant capital and real users, shifting funds and businesses that were previously in the traditional financial system to crypto infrastructure. For Ethereum, this isn't a zero-sum competition but an expansion of overall capacity, providing more stable liquidity and asset underpinning for native applications like DeFi.

Macro Trends

Global Stablecoin Regulation Divergence or Acceleration of Industry Concentration

Key Takeaways

· The EU's MiCA, the US's GENIUS Act, and Hong Kong's Stablecoin Regulation show significant differences in the issuer, reserve requirements, licensing regime, and more.

· Different regulatory frameworks force issuers to establish parallel compliance systems, increasing costs and operational friction, making it difficult for small stablecoin companies to survive.

· Experts suggest that regulatory fragmentation will concentrate market power among well-capitalized major issuers, potentially driving long-term global regulatory convergence.

Why It Matters

· In the short term, regulatory competition will continue, potentially limiting stablecoins to specific jurisdictions; long-term risks and growth in cross-border transaction volumes will drive international coordination.

Bernstein: Coinbase Emerging as a Core Player in Ethereum Ecosystem, Target Price $510

Key Takeaways

· Ether has risen 80% since June 5, driven by Circle's listing and stablecoin minting on Ethereum; Coinbase earns ETH revenue through its L2 Base Chain and staking business.

· Base processes over 9 million transactions daily, with an annualized revenue of around $75 million, becoming a major token issuance platform; Coinbase integrates all Base tokens into its main exchange, boosting ETH-denominated trading fee revenue.

· Coinbase holds approximately 136,800 ETH (worth $590 million) and has launched the Base App wallet to strengthen its ecosystem presence.

Why It Matters

· Coinbase benefits across multiple points in the Ethereum chain's infrastructure, transactions, and asset holdings, directly tying into ETH's ecosystem growth dividend.

Nobel Laureate Economist Simon Johnson: US Loose Cryptocurrency Legislation Could Trigger Stablecoin Bank Runs and Systemic Risks

Key Takeaways

· The author criticizes the GENIUS Act and the CLARITY Act for overly catering to the interests of the crypto industry, weakening regulation, and failing to effectively prevent stablecoin runs, capital, and liquidity risks.

· The bill allows foreign issuers to hold non-dollar-denominated high-risk assets as reserves, which could trigger a liquidity crisis and market panic when the dollar appreciates.

· Relaxing restrictions on conflicts of interest and self-trading may reproduce 1920s-style financial risks and increase the use of stablecoins in illicit transactions.

Why It Matters

· Loose regulation could lead the United States to become the "Crypto Capital," but at the same time, it lays the groundwork for financial panic and systemic collapse.

Regulatory Compliance

Google Play's New Policy Requires Some Crypto Wallets to Be Licensed, does not involve non-custodial wallets

Key Highlights

· Starting October 29, Google Play will require crypto wallet apps in 15+ regions, including the US and Europe, to be licensed and comply with industry standards

· In the US, developers need to register as Money Services Businesses or Money Transmitters; in the EU, they need to register as Crypto Asset Service Providers (CASP)

· Google clarifies that non-custodial wallets are not affected by the new policy, which had previously sparked controversy over removing crypto apps

Why It Matters

· The new policy may drive the compliance of custodial crypto wallets, strengthening KYC and AML measures

“Token Launch Roth IRA” Allows Crypto Founders to Include Pre-IPO Tokens in a Tax-Free Account

Key Highlights

· Startup AnchorZero introduces a scheme that enables crypto founders to deposit pre-IPO tokens into a Roth IRA for tax-free appreciation

· The mechanism relies on Anchorage Digital Bank's custody, similar to Peter Thiel's early move to put PayPal shares in an IRA

· Critics argue that the scheme exacerbates tax inequality and further deepens the negative public perception of "insider profiting" in the crypto industry

Why It Matters

· Although legal, the mechanism is highly controversial and may attract regulatory scrutiny, potentially harming the cryptocurrency industry's fairness and reputation

SEC Commissioner Hester Peirce Rarely Defends Privacy Tech, Echoing Cypherpunk Ideals

Key Takeaways

· Peirce, in her speech, referenced Eric Hughes, author of the "Cypherpunk Manifesto," in support of anonymous technologies such as cryptographic mixers, privacy coins, and decentralized mesh networks

· She criticized the "third-party doctrine" that gives the government warrantless access to banking data, advocating that bank records should enjoy Fourth Amendment-equivalent privacy protection

· Peirce acknowledged that privacy tools should be allowed even if they could be used for illicit purposes to reduce reliance on third parties for information

Why It Matters

· As a senior U.S. financial regulator, Peirce's stance is notably aligned with the cryptocurrency community's core privacy values, which may influence future policies and regulatory attitudes

a16z and DeFi Education Fund Urge SEC to Create Safe Harbor for NFTs and DeFi Applications

Key Takeaways

· a16z and DeFi Education Fund wrote to SEC Commissioner Hester Peirce, suggesting that non-high-risk NFT and DeFi applications be exempt from broker registration requirements

· The letter stated that a safe harbor could provide regulatory clarity, retain SEC oversight over high-risk activities, and enable developers to build fearlessly in the U.S.

· Previously, a16z had proposed an NFT safe harbor to the SEC and suggested a similar mechanism for airdrops and network tokens

Why It Matters

· If adopted, the safe harbor would lower compliance barriers, reduce the risk of misusing traditional securities regulations to stifle innovation applications

Paxos Reapplies for U.S. National Trust Bank Charter, Aligning with Stablecoin Regulation

Key Highlights

· PayPal's PYUSD issuer Paxos has applied to convert its New York limited purpose trust charter to a U.S. national trust bank charter, subject to OCC supervision.

· If approved, it can custody customer assets and settle payments nationwide but cannot take deposits or make loans.

· This move follows the enactment of the GENIUS Act stablecoin legislation, with similar institutions like Ripple and Circle also submitting charter applications recently.

Why It Matters

· A federal charter helps stablecoin issuers enhance compliance and institutional client trust.

The SFC Issues Virtual Asset Custody Standards in Hong Kong to Enhance Customer Asset Security

Key Highlights

· The Securities and Futures Commission (SFC) of Hong Kong has sent a circular to licensed virtual asset trading platforms, outlining minimum standards for robust custody, covering executive responsibility, cold wallet infrastructure, third-party wallet applications, and real-time threat monitoring.

· This action was prompted by recent overseas virtual asset custody vulnerabilities and inadequate monitoring identified in local Hong Kong-targeted reviews.

· The new standards will be incorporated into core regulatory requirements, driving the industry to adopt more advanced custody technologies and establish effective custody frameworks.

Why It Matters

· Strengthening custody and security standards can reduce platform security incident risks, enhance compliance in the Hong Kong virtual asset market, and increase international credibility.

US Sanctions Crypto Network Supporting Ruble Stablecoin A7A5 and Shut-Down Exchange Garantex

Key Highlights

· The U.S. Treasury Department has sanctioned companies and executives associated with the Ruble stablecoin A7A5 and the closed exchange Garantex, accusing them of laundering ransomware proceeds and evading sanctions.

· Garantex had processed over $100 million in illicit transactions. After being seized, its successor platform Grinex restored customer fund access using A7A5, with daily trading volumes of A7A5 reaching $1 billion.

· The sanctioned entities include issuer Old Vector, A7 LLC and its subsidiaries, as well as multiple Russian executives and their affiliated entities, being entirely barred from the U.S. dollar clearing system.

Why It Matters

· The U.S. is ramping up pressure on Russia's financial network by targeting the use of stablecoins and cryptocurrency exchanges to evade sanctions.

American Bankers Association: Stablecoins Could Lead to $6.6 Trillion Outflow from U.S. Bank Deposits

Key Highlights

· The American Bankers Association (ABA) released a report urging Congress to fix a loophole in the "GENIUS Act" that prohibits stablecoins from earning interest.

· Citing Treasury Department data, the report warns that if the loophole is not addressed, stablecoins could lead to a $6.6 trillion outflow from U.S. bank deposits.

· The ABA points out that exchanges and affiliates could circumvent the ban through "reward" mechanisms, undermining the regulatory impact.

Why It Matters

· Failure to address the loophole could disrupt the banking deposit base and increase the cost of lending.

Fintech and Crypto Companies Unite to Urge Trump to Stop Banks Charging Customer Data Access Fees

Key Highlights

· CEOs of various fintech and crypto companies such as Klarna, Robinhood, Gemini, Kraken, PayPal, and Stripe jointly sent a letter to Trump, opposing large banks charging third parties for customer data access.

· JPMorgan has announced it will start charging data aggregators, while PNC is considering similar measures; the industry warns that this move will "stifle innovation" and force smaller financial tools to shut down.

· Industry organizations like FTA and the American Fintech Council joined the joint effort, calling for the preservation of an open financial ecosystem to prevent large banks from hindering competition.

Why It Matters

· Data access fees could undermine the competitiveness of open banking and the open finance model, restricting the development space for emerging payment and crypto services.

Capital Deployment

Tether and IDG Capital Lead $16 Million Funding Round for Cross-Border Payment Firm Transak

Key Highlights

· Cross-border payment infrastructure company Transak has secured a $16 million strategic investment led by Tether and IDG Capital to expand its stablecoin payment network

· The platform has processed over $2 billion in transaction volume, with approximately 30% coming from stablecoins, covering 75 countries, 450+ applications, and serving over 10 million users for fiat-to-stablecoin conversions

· Transak holds multiple regulatory licenses and plans to expand into the Middle East, Latin America, and Southeast Asia markets

Why It Matters

· Stablecoins are becoming the global payment infrastructure, with capital reinforcing compliant cross-border infrastructure to accelerate adoption in emerging markets

Coinbase Relaunches Stablecoin Bootstrap Fund to Enhance DeFi Liquidity

Key Highlights

· Coinbase has relaunched the Stablecoin Bootstrap Fund through its subsidiary, Coinbase Asset Management, with initial funding going to Aave, Morpho, Kamino, and Jupiter

· The fund, which initially supported protocols like Uniswap, Compound, and dYdX with USDC liquidity in 2019, now sees USDC's on-chain annual trading volume reach $2.7 trillion

· The new fund aims to provide deeper stablecoin liquidity to both mature and emerging protocols and collaborate with early teams to drive stablecoin growth

Why It Matters

· Leading exchanges injecting funds or boosting DeFi stablecoin market depth, accelerating stablecoin adoption in on-chain finance

GPU-Backed Stablecoin Platform USD. AI Secures $13 Million Funding

Key Highlights

· The stablecoin lending protocol USD.AI has completed a $13 million Series A funding round, led by Framework Ventures, with participation from Dragonfly, Arbitrum, and others

· The platform collateralizes GPU hardware to provide USD-pegged loans to small and medium AI companies, attracting $50 million in deposits during the private testing phase.

· Plans to launch an ICO and gamified distribution model to further expand the market for AI combined with on-chain finance.

Why It Matters

· By combining AI hardware with stablecoin credit, it opens up a new asset class beyond collateral-free on-chain loans.

Market Adoption

Nuvei Launches Stablecoin Channel to Accelerate Cross-Border Payments in Emerging Markets

Key Highlights

· Canadian Montreal-based payment company Nuvei offers services in 200+ markets, now integrating a stablecoin backend for same-day cross-border settlements.

· Using a "stablecoin sandwich" approach to bypass intermediary bank bottlenecks, enhancing payment efficiency in underbanked regions.

· The new solution targets emerging markets with restricted cross-border payments and inadequate banking networks.

Why It Matters

· Stablecoin technology is becoming the foundation for cross-border settlements, improving payment scenarios that traditional banks find challenging to cover.

Visa Expands Stablecoin Business, Targeting a Future $2 Trillion Market

Key Highlights

· Visa's Head of Crypto, Cuy Sheffield, drives the expansion of stablecoin settlements, partnering with banks and fintech firms, and considering future issuance of proprietary stablecoins.

· Its stablecoin settlement service is already operational seven days a week, with a cumulative settlement volume exceeding $200 million, with initial customers including BBVA, Rain, and others.

· Collaborating with payment company Yellow Card in Africa and other emerging markets to explore the applications of stablecoins in cross-border transfers, liquidity management, and treasury operations.

Why It Matters

· As a global payment powerhouse, Visa is expanding its market share through stablecoin business, competing for dominance in payment infrastructure in emerging markets and on-chain finance.

Blue Origin Space Flights Now Available for Purchase with Cryptocurrency and Stablecoins

Key Highlights

· Blue Origin has partnered with payment technology company Shift4 to support payment for New Shepard suborbital flight tickets using BTC, ETH, SOL, USDT, USDC, and other cryptocurrencies and stablecoins

· Users can complete instant, secure payments directly through wallets such as Coinbase, MetaMask, etc.

· The new payment method enables global instant settlement in USD, processed 24/7, catering to the diverse payment needs of the high-end travel market

· New Shepard has already taken over 75 passengers beyond the Kármán line into outer space, and ticketing is now open for all upcoming commercial flights with cryptocurrency payments

Why It Matters

Opening up space tourism access for high-net-worth cryptocurrency users, expanding Blue Origin's customer base, and showcasing the application potential of cryptocurrency payments in high-value transaction scenarios

Global Grocery Giant Spar to Support Stablecoin and Cryptocurrency Payments in 300+ Supermarkets in Switzerland

Key Highlights

· Spar has partnered with Binance Pay and DFX.swiss to launch stablecoin and cryptocurrency payments across over 300 supermarkets nationwide in Switzerland, covering 100+ digital assets.

· Currently, 100 stores are live, with the remaining stores to be onboarded in the coming months, with payments settling instantly in Swiss Francs.

· Merchants can save up to two-thirds on card transaction fees, with over 1,000 Swiss merchants already supporting Bitcoin payments.

Why It Matters

· This marks Switzerland's first nationwide retail cryptocurrency payment rollout, potentially accelerating the adoption of digital currencies in everyday consumer scenarios.

Citi Plans to Enter Crypto Custody and Payments, Focusing on Stablecoin Assets

Key Highlights

· Citibank is evaluating the launch of cryptocurrency custody and payment services, with an initial focus on high-quality assets backed by stablecoins.

· The plan covers ETF custody related to crypto, benefiting from Bitcoin, Ethereum spot ETF, and stablecoin legislation progress.

· Citigroup has been actively involved in the blockchain and tokenization field in recent years, with 18 industry investments from 2020 to 2024.

Why It Matters

· The entry of large Wall Street banks will enhance the institutionalization and compliance of crypto asset custody and payments.

New Product Showcase

Coinbase Development Platform Adds 'netUSDChange' Security Policy to Server Wallets

Key Takeaways

· Coinbase Development Platform (CDP) has introduced the 'netUSDChange' policy in its Server Wallets security suite.

· This feature can calculate the total USD value of a single transaction (covering native assets, ERC20, ERC721, ERC1155) and automatically block or allow based on a set threshold.

· Price calculation is based on the current market prices, aimed at helping developers reduce fund exposure in high-risk transfers.

Why It Matters

· Providing more refined risk control tools for on-chain applications helps enhance the security of institutions and developers in high-value transactions.

Ethereum Wallet MetaMask to Release USD Stablecoin

Key Takeaways

· Leading Ethereum wallet MetaMask plans to announce the USD stablecoin mUSD this week, with a launch by the end of the month.

· With over 30 million monthly active users, the platform collaborates with Stripe's Bridge and M^0 and introduces Blackstone for custody and fund management.

· Stablecoin yields will come from short-term US Treasury bills and other highly liquid assets.

Why It Matters

· A leading wallet issuing a stablecoin will accelerate the use and yield internal circulation of stablecoins in the Ethereum ecosystem.

Coinbase Teams Up with Mercuryo to Reduce MetaMask Users' USDC On-chain Costs

Key Takeaways

· Coinbase has partnered with the crypto payment platform Mercuryo to reduce the on-chain fees for MetaMask users on the Base network by approximately 50%.

· The discount is available to both new and existing users, with Base being incubated by Coinbase; MetaMask is a mainstream Ethereum wallet.

· This move follows closely after USDC issuer Circle announced the development of a stablecoin-native Layer 1 with USDC as Gas.

Why It Matters

· Lowering on-chain costs can promote the circulation of USDC in the Ethereum and Base ecosystem, solidifying Coinbase's position in the stablecoin competition.

Circle Launches Native Stablecoin Chain Arc, Reports Q2 Net Loss of $4.82 Billion

Key Takeaways

· Circle recorded Q2 revenue of $658 million but reported a net loss of $4.82 billion due to non-cash expenses related to its IPO.

· It launched the EVM-compatible Layer 1 blockchain Arc, using USDC as Gas, targeting payment, foreign exchange, and capital markets applications.

· USDC's circulating supply grew by 90% year-over-year to $61.3 billion, with on-chain transaction volume reaching $5.9 trillion and market share rising to 28%.

Why It Matters

· A proprietary chain can strengthen USDC's foundational position in the payment and settlement sector, directly engaging in stablecoin infrastructure competition.

Binance Collaborates with Spain's BBVA to Offer Off-chain Custody Services

Key Takeaways

· Binance has partnered with Spain's third-largest bank, BBVA, to provide customers with off-chain custody, storing assets in BBVA-held US Treasury bonds, which can be used as trading collateral.

· This arrangement will separate trading from funds, reducing counterparty risk in the event of exchange insolvency.

· This move continues Binance's strategy of introducing third-party custody solutions (such as Sygnum, FlowBank) in response to the FTX incident, addressing the market's concerns about fund security.

Why It Matters

· Strengthening the user asset segregation mechanism helps enhance the exchange's compliance and market trust.

Worldcoin Competitor Humanity Protocol Launches $1.1B Mainnet

Key Points

· Hong Kong-based decentralized identity network Humanity Protocol has launched its mainnet, valued at $1.1 billion, adopting a zero-knowledge Transport Layer Security protocol (zkTLS) to connect Web2 certificates with Web3 services.

· zkTLS allows users to verify credentials in areas such as frequent flyer programs, finance, education, without revealing underlying data, thus avoiding biometric privacy risks.

· It plans to expand to on-chain ticketing, decentralized governance, and a platform to prevent Sybil attacks in the future.

Why It Matters

· Providing privacy-first identity verification infrastructure, it is poised to challenge Worldcoin's dominant position in the decentralized identity and "proof of humanity" space.

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