Original Title: "Cobo Stablecoin Weekly Report NO.24 | Why is PayPal All in on the Issuance Right of a Stablecoin?"

The core event of this week was undoubtedly the Hyperliquid community's bidding war for the issuance of a native stablecoin. This was a game involving a $5.5 billion worth of floating capital, which not only attracted DeFi native powers such as Frax and Ethena but also brought in financial technology giants like Stripe and PayPal, making the stablecoin race far beyond the crypto circle.

This is the first time a decentralized protocol has attempted on a large scale to challenge the profit model of financial technology. Each project bidding party has chosen to transfer the floating capital revenue to the community in order to obtain the most scarce "distribution entry point." As a result, this competition is no longer limited to token issuance but also marks a key turning point for stablecoins towards "from issuance to distribution."

With the continuous lowering of the stablecoin issuance threshold, it can be foreseen that more communities and brands will issue their own stablecoins, returning the revenue to users and ecosystems. "Monetary sovereignty" is transitioning from an idea to reality and gradually becoming a new consensus in the industry.

Market Overview and Growth Highlights

Total stablecoin market capitalization reached $287.876b (approximately $287.876 billion), with a weekly decrease of $353.58m (approximately $353.58 million). In terms of market dominance, USDT continues to maintain its lead with a share of 58.88%; USDC ranks second with a market cap of $72.012b (approximately $72.012 billion), accounting for 25.02%.

Blockchain Network Distribution

Top Three Stablecoin Networks by Market Cap:

· Ethereum: $154.314b

· Tron: $79.239b

· Solana: $12.465b

Top 3 Fastest Growing Networks of the Week:

· M By M^0 (M): +20.77%

· PayPal USD (PYUSD): +14.78%

· Ethena USDtb (USDTB): +12.94%

Data source: DefiLlama

$5.5 Billion Floating Capital: Who Will Win the Issuance Right of Hyperliquid's Stablecoin

In the Hyperliquid community, a $5.5 billion stablecoin bidding war has entered a crucial stage. On the surface, this is just the launch of a native stablecoin called USDH, but fundamentally, it involves the reallocation of reserve interest. In the past, this portion of annual interest earnings totaling hundreds of millions of dollars flowed mainly to Circle, Coinbase, and other issuers and distributors (with $5.5 billion USDC accounting for 7.6% of the total supply, Circle has accumulated over $120 million in interest income, still receiving approximately $620,000 daily). The Hyperliquid community hopes that by issuing its own native stablecoin, USDH, this portion of interest income will flow back to the community. As a result, numerous bidders have put forward generous terms, with projects like Frax, Ethena, Agora, Sky, and others even willing to relinquish 95% or even 100% of the interest back to the community. This means that stablecoin issuance itself is no longer a profit center but rather a ticket to enter the distribution layer. The Hyperliquid user network and liquidity position are sufficient to render the previous "issuer-exclusive income" model obsolete, overturning the core logic that once allowed USDT to monopolize profits.

The proposal paths of the various bidders vary. DeFi camps such as Frax and Ethena favor a "nested doll" model, leveraging an intermediate layer linked to Hyperliquid's USDC reserves to mint and anchor USDH issuance, thereby expanding their demand pools and benefiting the community in return; Native Markets, as a key figure in the Hyperliquid community, has joined the bidding, collaborating with Stripe-Bridge to promote USDH as an API-level asset with fiat on/off-ramps and multi-chain payment capabilities, aiming to achieve expansion through embedded real-world merchant penetration. In contrast, Paxos has partnered with PayPal, leveraging its extensive user and merchant network to drive rapid stablecoin adoption from the top down. The former represents a progressive, developer-driven expansion logic, while the latter emphasizes immediate access and efficiency coverage, embodying the two paths of stablecoin distribution.

Polymarket's prediction market data shows that Native Markets' odds of winning have exceeded ninety percent. Regardless of the final outcome, Circle's reliance on reserve interest is being shaken. With the proliferation of "Stablecoin-as-a-Service" (STaaS), the moat of the stablecoin race will shift from reserve size to distribution channels. Hyperliquid's bidding war may be the first case of this shift, but it won't be the last. This implies that in the future, we will see more communities and brands choosing to issue their own stablecoins, channeling earnings back to the community, ecosystem, and users, gradually making "monetary sovereignty" a new industry consensus.

Stripe's Most Promising Profit Engine: Monetizing Distribution Rights

Last week, Stripe officially launched its in-house Tempo payment chain, completing the stablecoin payment's full-stack closed loop: Privy provides a frictionless wallet, Bridge handles issuance and compliant settlement, and Tempo takes on final settlement. Individually, these three projects do not have unique advantages as there are already many similar products on the market. However, when they are API-ized and harmoniously orchestrated into Stripe's network, stablecoins are no longer just "another payment method" but become a core component of the payment orchestration layer. This allows stablecoins' advantages in cross-border, micropayments, and programmable payments to be optimally combined with traditional channels, unlocking new business models and capturing more diversified value. This means that for merchants, there is hardly any change on the front end; meanwhile, in the background, Stripe can now dynamically route the optimal path in real-time between ACH, card networks, and Tempo+Bridge, making stablecoins the invisible infrastructure of the payment network.

However, Stripe's greatest differentiating competitive advantage is not the chain itself but in thoroughly commodifying infrastructure elements such as compliance, issuance, and settlement, and then shifting the competitive focus back to its core strengths—product and distribution. Leveraging its millions of merchant network, Stripe can bind white-label issuance to the merchant ecosystem through Bridge, allowing stablecoins to directly enter mainstream commercial scenarios. The value of this "distribution channel" far exceeds interest income on float, as it creates a non-speculative real-world use case for stablecoins. Furthermore, Stripe's API may even enable merchants to become issuers directly, embedding stablecoins into loyalty points or supply chain settlements. At that point, stablecoin penetration will no longer rely on speculative momentum but will naturally extend into the commercial network through the distribution layer. And when distribution becomes the scarcest resource, Stripe may even reverse-charge "tolls" to stablecoin giants like Circle. It can be said that the real strategic ace up the sleeve of stablecoins lies not in issuance but in controlling the distribution entry point.

If in the Hyperliquid proposal bidding, distribution capability was just a bonus point, then in Stripe's business blueprint, the monetization of distribution capability may become the future profit engine. Apart from settlement fees, API usage fees, and reserve interest differentials, the true moat lies in the control of the merchant gateway. Once network effects start to become evident, controlling distribution is tantamount to controlling the most valuable cash flow of stablecoins, and distribution rights themselves will become a new monetization layer.

New Product Express

Minnesota Credit Union Consortium Launches First U.S. Credit Union Stablecoin

Key Highlights

· St. Cloud Financial Credit Union plans to launch Cloud Dollar (CLDUSD) by the end of 2025, claiming it to be the first stablecoin issued by a credit union in the United States

· The stablecoin is jointly developed by blockchain company Metallicus and fintech provider DaLandCUSO, will be directly integrated with the credit union's banking system, enabling instant, low-cost transactions

· CLDUSD will be issued on the Metal blockchain, connected to existing credit union infrastructure via the Coin2Core software, aiming to retain deposits while offering a regulated means of fund movement

Why It Matters:

Under the GENIUS Act, small financial institutions are leveraging blockchain technology to compete with fintech companies, bringing traditional financial institution players into the $270 billion stablecoin market

Coinbase Launches AI Agent-Specific Crypto Micro-Payment Ecosystem "x402 Bazaar"

Key Highlights

· Coinbase engineers unveiled "x402 Bazaar," a discovery layer for AI agents dubbed the "Google for AI agents"; the platform is built on top of the x402 open-source payment protocol released earlier this year, which supports instant stablecoin payments on any website

· The initial projects launched include Prixe (enabling AI agents to create real-time stock price APIs for the latest financial reports) and various image and video generation endpoints; Coinbase's Director of Developer Platform Engineering, Erik Reppel, referred to it as a "pay-per-crawl" model that addresses payment concerns when AI agents access data or content

· Coinbase believes the content market size that AI agents might access will be significantly larger than the content market directly purchased by humans; as more services join, the potential for autonomous workflows will expand, allowing "any digital goods or digital media to be paid via x402"

Why It Matters

· This ecosystem combines encrypted micro-payments with AI technology, creating a new paradigm for "agent commerce." AI agents require access to various data, content, and services to make better decisions, and micro-payment mechanisms make this access economically viable. By establishing standardized payment protocols and a discovery layer, Coinbase is building a bridge between AI agents and content/service providers, creating infrastructure for AI autonomous workflows. This not only expands the use cases of cryptocurrency in practical applications but also creates new revenue models for content creators and API providers, potentially being a significant step in the convergence of the AI economy and the crypto economy

MegaETH Launches USDm Stablecoin in Collaboration with Ethena, Subsidizing Sequencer Fees with Reserve Yield

Key Highlights

· Ethereum scaling solution MegaETH partners with DeFi protocol Ethena to launch the USDm stablecoin, utilizing stablecoin reserve yield to cover network operational costs instead of bidding up sequencer fees like most layer-two networks

· USDm will be issued through Ethena's USDtb framework, with its reserve primarily holding BlackRock's tokenized US Treasury bond fund (BUIDL) and a liquidity stablecoin, initially supporting swaps with USDtb rather than direct fiat redemption, aiming to reduce transaction costs and maintain stability

· This model aims to harmonize chain and ecosystem incentive mechanisms, addressing the issue of increased fee unpredictability after EIP-4844 reduced data costs. The MegaETH testnet is live, achieving 10-millisecond block times and over 20,000 transactions per second throughput

Why It Matters

· MegaETH's USDm model represents a new approach to layer-two network revenue models by allocating stablecoin reserve yield to network operations rather than as chain profits, potentially creating a lower and more stable fee environment for users and developers. The collaboration with Ethena also brings scale and compliance infrastructure, with Ethena being the issuer of the third-largest stablecoin USDe, with around $13 billion in TVL. Its USDtb has approximately $1.5 billion in circulation and is compliant with the US GENIUS Act framework

Market Adoption

LitFinancial Issues Ethereum Stablecoin, Transforming Mortgage Process

Key Highlights:

· Michigan-based mortgage provider LitFinancial launches the USD-backed stablecoin litUSD on the Ethereum blockchain, backed by a 1:1 cash reserve

· The company plans to use the stablecoin to lower funding costs, enhance financial management, and explore on-chain settlement of mortgages to make loan performance publicly traceable

· Brale handles issuance and redemption services, while advisory firm Stably supports tokenomics and DeFi integration, allowing users to mint and redeem litUSD via bank transfers or USDC

Why It Matters:

· With the passage of the GENIUS Act, institutional stablecoins are accelerating, with an estimated transaction volume of $1 trillion by 2030. LitFinancial's move demonstrates how blockchain is reshaping the traditional mortgage market liquidity

BBVA Partners with Ripple to Provide Retail Cryptocurrency Services, Expanding Presence in the Spanish Market

Key Takeaways:

· Cryptocurrency infrastructure company Ripple is expanding its partnership with Spanish banking giant BBVA to provide digital asset custody technology to support BBVA's newly launched Bitcoin and Ethereum trading and custody services for retail customers in Spain

· Cassie Craddock, Ripple's Managing Director for Europe, stated that with the establishment of the EU's Markets in Crypto-Assets regulation (MiCA) in Europe, banks in the region are confident in launching the digital asset services their customers demand. Ripple's custody technology helps banks offer cryptocurrency and digital asset services while maintaining security, compliance, and efficiency

· Ripple has already provided custody technology to BBVA for its operations in Switzerland and Turkey. The two parties have also collaborated on a real-time international remittance pilot project. Last month, BBVA was reported to be one of Binance's largest clients as an independent custodian

Why It Matters:

· The establishment of the European MiCA regulatory framework has provided regulatory certainty for traditional banks venturing into the crypto space. BBVA's active expansion of crypto services as a mainstream bank indicates that financial institutions' acceptance of digital assets is increasing. Through its partnership with Ripple, BBVA can directly offer end-to-end custody services to customers, meeting the growing consumer demand for cryptocurrency while ensuring regulatory compliance

World's Largest Asset Manager BlackRock Plans to Tokenize ETFs

Key Takeaways:

· According to Bloomberg, the world's largest asset management company, BlackRock, is considering tokenizing its ETF funds, including tokenizing funds associated with "real-world assets" such as stock funds

· BlackRock's iShares Bitcoin and Ethereum ETF products have attracted $55 billion and $12.7 billion in inflows, respectively. Both funds reached $10 billion in size in less than a year

· The company has prior on-chain product experience, with its BlackRock USD Institutional Digital Liquidity Fund (BUIDL) becoming the first tokenized fund to surpass a $10 billion AUM milestone, currently managing over $20 billion in assets

Why It Matters:

· BlackRock's move signifies Wall Street's accelerated embrace of the asset tokenization trend, echoing recent actions by Fidelity and Nasdaq, and may provide institutional investors with a new pathway to invest in on-chain real-world assets

FinTech Unicorn Ramp is Hiring Senior Engineers to Build Stablecoin Payment Infrastructure

Key Highlights:

· Ramp is currently recruiting senior/principal-level software engineers to build stablecoin payment and liquidity infrastructure, including wallet systems, payment channels, and fiat settlement integrations

· This role will involve integrating stablecoin capabilities into Ramp's core financial product in a compliant manner, leading internal technical architecture, and engaging with financial partners externally

· Leveraging AI-driven innovation, Ramp has shifted from a simple exchange fee revenue model to software revenue and value-added services. After achieving a $16 billion valuation in June this year, Ramp is currently in discussions for a new $3.5 billion funding round, with a valuation expected to rise to $21 billion, a roughly 30% increase from the previous round, reflecting investor confidence in its business model.

Why It Matters:

· This strategic move will integrate Ramp's AI-driven financial platform with blockchain payments, offering enterprise customers a more comprehensive financial solution, potentially creating an innovative intersection of enterprise payments, stablecoin applications, and financial automation

Capital Deployment

Figure IPO Frenzy: Blockchain Company's Stock Price Skyrockets 24% on First Day

Key Highlights:

· Blockchain financial company Figure successfully IPOs, raising $7.875 billion, with shares priced at $25, above expectations, closing the first day at $31.11, a 24.44% increase, valuing the company at $53 billion

· Figure Co-founder Mike Cagney (former SoFi Co-founder) stated that blockchain technology could reduce the number of intermediaries in the stock market trading from 7 to 2, enabling direct connection between buyers and sellers

· The company's core business is a blockchain platform that supports consumer credit and digital assets, whose technology can shorten the home equity loan processing time from the industry average of 42 days to 10 days, facilitating approximately $6 billion in home equity loan transactions within the 12 months ending June 2025

Why It Matters:

· The success of Figure's IPO marks mainstream recognition of blockchain technology in traditional finance, as the company turned profitable (with a net profit of $29.4 million in the first half of the year), validating the commercial value of blockchain in streamlining financial intermediary processes and improving transaction efficiency

Private Equity Startup Inversion Labs Acquires Traditional Enterprise Infusing Blockchain

Key Takeaways:

· New York startup Inversion Labs plans to acquire low-profit-margin enterprises to enhance operational efficiency by infusing blockchain technology, thereby driving profit growth

· The company has completed a $26.5 million seed round of financing, with a valuation of $1 billion, led by crypto venture capital firm Dragonfly Capital, with participation from VanEck, ParaFi Capital, and others

· Inversion will establish a separate Inversion Capital fund of over $500 million for acquisitions, has submitted multiple acquisition offers for South American telecom companies, and aims to complete the first transaction within a year

Why It Matters:

· This innovative business model combining private equity and blockchain provides institutional investors with low-risk exposure to crypto while avoiding price volatility, and is expected to drive blockchain technology's large-scale adoption in traditional industries through real-world business cases

Kraken Acquires Exchange Platform Breakout Co-founded by "Crypto Twitter" Celebrity Mayne and Cred

Key Highlights

· Kraken has announced the acquisition of the crypto proprietary trading platform Breakout, which allows traders to access up to $100,000 in single-account nominal capital (or up to $200,000 in multi-account capital) without personal funds, and can retain up to 90% of the generated profits upon successful evaluation

· Breakout was founded in 2023 by industry veterans TraderMayne, CryptoCred, Alex Miningham, and Abetrade. The platform supports over 50 cryptocurrency trading pairs, with BTC and ETH contracts offering up to 5x leverage. Breakout will gradually be integrated into the Kraken Pro platform.

· Kraken Co-founder and CEO Arjun Sethi stated, "Breakout allows us to allocate capital based on skill and not on capital-raising ability... This is how a modern capital platform should operate. Transparent, programmable, and open to anyone with an edge."

Why It Matters

· This acquisition reflects the sharp rise in M&A activity in the crypto industry driven by a more proactive regulatory environment under the Trump administration in the US, market consolidation, and the need for infrastructure expansion. Breakout's business model represents innovation in the trading space by identifying talented traders through an evaluation process and providing funding support, creating opportunities for individuals lacking personal capital but possessing trading skills. This "assess-first, fund-later" model may become a significant trend in the development of future trading platforms.

Tetra Digital Raises $10 Million, Develops Regulated CAD-Backed Stablecoin

Key Takeaways

· The Alberta, Canada-based digital asset custodian Tetra Digital Group announced raising approximately $10 million to develop and issue a regulated stablecoin pegged to the Canadian dollar. The project's investors include Shopify, Wealthsimple, Purpose Unlimited, Shakepay, ATB Financial, National Bank, and Urbana Corporation, which has held the majority stake in Tetra since April.

· The stablecoin is set to launch in early 2026 pending regulatory approval. The token will be issued through the regulated digital asset custodian subsidiary Tetra Trust and will be backed 1:1 by Canadian-dollar reserves held domestically in Canada.

· Tetra Digital CEO Didier Lavallée said, "By bringing together Canada's most trusted financial institutions and companies, we're not just launching a stablecoin; we're supporting a homegrown solution, built by Canadians, for Canadians, ensuring we maintain economic sovereignty."

Why It's Important

· Tetra Digital's Canadian Dollar stablecoin project represents an important trend — the rise of non-dollar stablecoins, which helps reduce reliance on USD stablecoins, promotes financial system diversification, indicates Canada's active efforts to establish a domestic digital payment infrastructure to uphold economic sovereignty, and secure a spot in the global stablecoin market

Coinbase Acquires Sensible Founding Team to Accelerate "Everything Exchange" Strategy

Key Takeaways

· Coinbase has acquired the two founders of the crypto yield platform Sensible, Jacob Frantz and Zachary Salmon. This marks the company's seventh acquisition or talent acquisition of 2025, and Sensible will cease operations in October

· The two founders will lead a key team at Coinbase focused on on-chain consumer strategy to simplify DeFi access, enhance use cases, make cryptocurrency more user-friendly, and continue the effort to make cryptocurrency a usable asset rather than just a holdable one

· Coinbase is actively advancing its "Everything Exchange" vision, planning to add tokenized stocks, prediction markets, and early-stage token sales. Last month, it announced the integration of a decentralized exchange to offer traders "millions" of previously unavailable digital assets

Why It's Important

· Despite Coinbase's second-quarter revenue declining 26% year-over-year, spot trading volume dropping over 30%, and experiencing a $307 million data breach, the company is aggressively expanding its business scope through acquisitions. This indicates Coinbase is shifting towards a comprehensive financial services platform, integrating traditional finance with crypto assets to create an all-in-one platform where users can trade, lend, stake, spend, and earn rewards

Ant Group Plans to Tokenize Over $84 Billion Worth of Energy Assets

Key Takeaways

· According to Bloomberg, Ant Group's blockchain division, Ant Technology Group, is advancing a plan to put energy assets worth over $84 billion (around 600 billion RMB) on-chain. It is currently tracking the power output of approximately 15 million new energy devices (including wind turbines and solar panels) in China and monitoring potential faults

· The plan has moved beyond the planning stage, and Ant has completed funding for three clean energy projects through tokenization, raising a total of about RMB 300 million (USD 42 million) for the operating company

· According to sources familiar with the matter, Ant is exploring increasing the liquidity of real-world assets by issuing tokens on overseas decentralized exchanges as part of its future expansion plans. However, these plans are still subject to regulatory approval

Why It Matters

· Ant Group's move marks a significant move by a large financial technology company in the realm of Real World Asset (RWA) tokenization. By putting clean energy assets on the blockchain, not only can asset liquidity and transparency be enhanced, but new financing channels can also be created for green energy projects. In December last year, with the technical support of Ant Group, the green energy service provider Xinfin Energy completed an RWA project based on photovoltaic assets, involving over RMB 200 million. Ant Group has also joined a sandbox program led by the Hong Kong Monetary Authority to explore RWA tokenization, indicating that Asian financial giants are actively embracing blockchain technology applied to the traditional financial sector

A16z-backed Lead Bank Completes USD 70 Million Funding Round, Valued at USD 1.47 Billion

Key Takeaways

· Cryptocurrency-friendly bank Lead Bank, headquartered in Missouri, has completed a USD 70 million Series B funding round, valuing the bank at USD 1.47 billion. This round of funding brought in new investors ICONIQ and Greycroft, along with existing investors Andreessen Horowitz (a16z), Ribbit Capital, Coatue, Khosla Ventures, and Zeev Ventures

· Lead Bank, a 97-year-old community bank in Kansas City, Missouri, was acquired for USD 56 million by a tech executive team in 2022. After the acquisition, the bank expanded its Banking as a Service (BaaS) platform, attracting several high-profile partners in the fintech and crypto spaces

· In April this year, Lead Bank partnered with Stripe and Visa to provide banking services for its stablecoin-linked payment card platform, Bridge

Why It Matters

With the rapid development in the cryptocurrency and fintech space, the cases of traditional banking institutions transitioning to digital asset-friendly services are increasing. The significant valuation growth of Lead Bank in a short period (from a $56 million acquisition price to a $1.47 billion valuation) reflects market recognition of banking institutions that can understand and cater to the specific needs of cryptocurrency and fintech companies.

Tether Plans a Major Entry into the Gold Industry Chain, Denies Bitcoin Sell-Off

Key Highlights:

· According to the UK's Financial Times, Tether, the world's largest stablecoin issuer, is considering significantly increasing its exposure to gold, potentially investing in "the entire gold supply chain from mining and refining to trading and licensing companies." CEO Paolo Ardoino hinted that the report is accurate.

· Tether has acquired about 33% stake in Canadian precious metals royalty company Elemental Altus Royalties. Currently, the nearly 250,000 Tether Gold tokens in circulation are backed by 7.66 tons of physical gold stored in a Swiss vault.

· Ardoino denies the company's sell-off of Bitcoin, clarifying that the BTC reserves reduced from 92,650 to 83,274 were not sold but rather around 20,000 BTC were transferred to the Bitcoin treasury company controlled by Tether, Twenty One Capital.

Why It Matters:

· As the price of gold hits a historic high, Tether is expanding its asset diversification using the substantial profits from its stablecoin business. Its strategic move into the traditional gold industry chain demonstrates the integration of cryptocurrency with traditional finance and reflects the increasing strategic focus of crypto giants on tangible assets.

Why Crypto VC Firms are Betting Big on the Prediction Market: Rise of Two Giants and Industry Inflection Point

Key Highlights:

· Investment in the prediction market is witnessing a surge: In 2025, there have already been 11 transactions securing over $216 million in funding, far exceeding 2024's $80 million and nearly $60 million in 2021. The newly established The Clearing Company raised $15 million in seed funding, Kalshi raised $185 million in June, valuing it at $2 billion, and Polymarket is reportedly raising over $200 million at a $1 billion valuation.

· Regulatory Breakthrough as Key Catalyst: In May 2025, the CFTC dropped its appeal in the Kalshi case, essentially confirming a federal court ruling allowing prediction markets; last week, the CFTC also gave the green light for Polymarket to re-enter the U.S. market, through its acquisition of QCEX and a no-action letter regarding event contract recordkeeping, indicating that regulators are now willing to engage constructively

· The success of Polymarket and Kalshi can be attributed to several key advantages: liquidity (significant funding to address the "chicken-and-egg problem"), market influence (Polymarket has become synonymous with prediction markets, while Kalshi has established a reputation as a regulated financial platform), and persistence in the face of regulatory pressure and low trading volume, giving them brand power, liquidity, and distribution channels

Why It Matters

The shift of prediction markets from the fringes to the mainstream represents a significant transformation in the crypto space, with trading volume not waning post-U.S. election but shifting to sports, economic, and cultural events. The head of Coinbase Ventures referred to it as a "killer on-chain use case." Several investors believe this space could eventually match the size of the stock market, attracting institutional investors including hedge funds, and expanding to sports markets accessed by platforms like FanDuel and DraftKings. However, liquidity remains fragile, event resolution solutions have structural weaknesses, and there are potential risks of social harm markets and trade integrity issues

Regulatory Compliance

Nasdaq Seeks SEC Approval for Stock Tokenization Plan

Key Highlights

· Major U.S. stock exchange Nasdaq has submitted an application to the SEC seeking permission to tokenize stocks, with the plan allowing customers to choose between traditional stock trading or trading via tokenized stocks, both of which will have equal priority

· Nasdaq stated that trading of tokenized stocks will proceed similarly to regular stock trading through Depository Trust Company (DTC) clearing and settlement; purchasers of the tokens will have full rights to the underlying stock, including voting and clearing rights; the new system will launch once the necessary infrastructure and post-trade settlement services are set up with the DTC

· This move follows digital brokerage Robinhood issuing stock tokens for European customers in July, offering access to around 200 U.S. stocks and ETFs; SEC Chairman Paul Atkins explicitly stated that asset tokenization is a key focus for the agency, with regulators convening an expert panel earlier this year to explore this area

Why It Matters

· As the preferred U.S. exchange for tech giants, Nasdaq's move signifies a significant shift of traditional finance towards blockchain technology. Nasdaq, home to tech giants like Apple, Google's parent Alphabet, Amazon, and Microsoft, entering the tokenization field holds special significance. SEC Chair Atkins likened the shift of securities from off-chain to on-chain systems to "moving from analog vinyl records to cassette tapes and then to digital software," believing that the migration of on-chain securities has the potential to reshape the securities market through novel issuance, trading, ownership, and usage methods. Against the backdrop of intense competition between traditional financial institutions and crypto-native companies, Nasdaq's move will provide crucial institutional support and market depth for asset tokenization, driving development in what is considered the hottest innovation area in the digital asset world.

SEC Chair Atkins: On-chain Finance Should Be "Free from Endless Legal Uncertainty"

Key Highlights:

· U.S. SEC Chair Paul Atkins reiterated at an OECD speech that "most cryptocurrencies are not securities" and stated that entrepreneurs and investors should be able to engage in on-chain finance without "having to face endless legal uncertainty."

· The SEC is implementing "Project Crypto" aimed at modernizing securities rules to support market digitization, permitting trading platforms to offer trading, lending, and staking services under a "single regulatory framework."

· Atkins criticized the past government's "weaponization" of SEC investigative and enforcement powers to suppress the crypto industry, calling such practices "not only ineffective but harmful," leading to job losses, innovation stifling, and capital flowing overseas.

Why It Matters:

· A fundamental shift in U.S. regulatory attitude is occurring as the SEC and CFTC will hold a roundtable on September 29 to discuss bringing back "innovative products" like perpetual contracts and DeFi to the U.S., ushering in a "golden age" of financial innovation on American soil.

Senate Bill Draft Suggests SEC-CFTC Establishment of Joint Committee to End Cryptocurrency Regulatory Dispute

Key Highlights:

· The "Responsible Financial Innovation Act" draft proposes the SEC and CFTC establish a Digital Asset Joint Advisory Committee to coordinate crypto regulation matters, with both agencies required to publicly respond to the committee's recommendations, explaining reasons for adoption or rejection.

· The bill adds DeFi developer protection provisions, specifying that developers operating decentralized exchanges or automated protocols are not automatically subject to broker regulations or anti-money laundering rules, with protection covering node operators, liquidity providers, and wallet developers

· The draft clarifies that staking rewards, liquidity staking yields, airdrops, and other "gratuitous distributions" do not constitute an offer or sale under securities law, and provides a partial securities law exemption for DePIN projects that meet decentralized standards and have no single entity holding over 20% of the tokens

Why It Matters

· The bill aims to end the regulatory turf war between the SEC and CFTC, while addressing developer legal risks raised after the conviction of the Tornado Cash founder. Senator Lummis has expressed the hope of submitting the final version for President Trump's signature before the end of the year

The U.S. Senate Democrats Introduce Crypto Regulatory Framework, Shows Clear Differences from the Republican Version

Key Highlights:

· 12 Democratic senators release a seven-pillar crypto regulatory framework, supporting CFTC regulation of non-security token spot markets and establishing a digital asset securities designation process, becoming the most comprehensive crypto regulatory proposal from the party to date

· The Democratic framework requires crypto platforms to register with FinCEN as financial institutions, prohibits stablecoin issuers from paying interest directly or through affiliated entities, and labels DeFi as an unlawful financial critical sector but does not specify whether protocol-level software teams need to register

· The most controversial part of the proposal addresses ethical issues, banning incumbent elected officials and their families from benefiting from crypto projects and mandating asset disclosure, directly targeting Trump and forming a major point of contention with the Republican-supported "Clarity Act"

Why It Matters:

· While the proposal lays the groundwork for bipartisan negotiations, there are clear differences with the Republicans on ethical provisions, the strictness of DeFi regulation, and the legislative process. The House has passed the "Clarity Act," and whether the differences can be reconciled in the Senate Banking Committee negotiations will determine whether the U.S. can establish comprehensive crypto market rules and end regulatory uncertainty

Macro Trends

Stablecoins Pose Fundamental Threat to U.S. Community Banks, Challenging Their Deposit Base

Key Highlights:

· While FinTech companies mainly challenge traditional banks through product innovation and user experience, stablecoins pose a fundamental threat to bank deposits by mimicking the function of deposits.

· The Office of the Comptroller of the Currency (OCC) has given the green light for the integration of crypto with banking services, allowing blockchain platforms to access many regulated bank privileges. OCC official Jonathan Gould stated that banks engaging in crypto-related activities are legitimate and should not be stigmatized.

· Several banking industry associations have warned that the "GENIUS Act" contains provisions allowing certain cryptocurrency exchanges to indirectly pay interest to stablecoin holders, which could lead customers to move funds from banks to crypto exchanges to earn interest.

Why It Matters:

· Stablecoins represent a reconstruction of the value transfer layer, challenging the foundation of the banking system. The traditional advantage of community banks in local services is becoming harder to maintain in the era of digital wallets and blockchain payments. The competitive focus in the financial industry is shifting from functional features to controlling the flow of funds and currency transfers through infrastructure.

Polymarket Sets Historic New Market Creation Volume Record, Platform Prepares to Re-enter U.S. Market

Key Highlights

· Prediction market platform Polymarket created 13,800 new markets in August, about 2,000 more than the previous record set in July. However, the platform's overall trading volume has slowed down this year, with the number of active traders dropping to around 227,000, the lowest since October last year.

· Polymarket CEO Shayne Coplan stated this week that after the CFTC took a no-action stance on QCX regarding event contract position reporting and record-keeping requirements, the platform has received the "green light" to re-enter the U.S. market. Polymarket plans to re-enter the U.S. for the first time since January 2022 through the acquisition of derivatives exchange QCEX.

· The platform boasts high-profile supporters: Donald Trump Jr. invested in Polymarket last month and joined the advisory board, while in June this year, Elon Musk's X announced a "united front" with the prediction platform.

Why It's Important

· Polymarket, as a decentralized prediction market platform, garnered significant attention during the 2024 U.S. presidential election, but after the election, overall trading volume dropped from a peak of $2.6 billion to around $1 billion in recent months. As the platform prepares to re-enter the U.S. market, it may find new growth opportunities. The high level of new market creation shows the platform's diversification of its prediction events, while support from the Trump family and Musk provides crucial endorsements. As a rapidly growing submarket in the crypto space, Polymarket's development trajectory will be a key indicator of the industry's evolution.

Original Article Link

Welcome to join the official BlockBeats community:

Telegram Subscription Group: https://t.me/theblockbeats

Telegram Discussion Group: https://t.me/BlockBeats_App

Official Twitter Account: https://twitter.com/BlockBeatsAsia