Original Title: "Cobo Stablecoin Weekly Report NO.16 | Three U.S. Crypto Regulations Passed, Citigroup and Other Banks Announce Entry into Stablecoin Business"
Welcome to the 16th edition of the Cobo Stablecoin Weekly Report.
This week, the U.S. Congress passed three core bills with overwhelming support, bringing cryptocurrencies into the federal regulatory framework. The "GENIUS Act" establishes stablecoin reserve and redemption rules, the "CLARITY Act" defines market structure, and the "Anti-CBDC Act" restricts central bank digital currency issuance. This clear and strategic regulatory package will open the door for private issuance, delineate the boundaries between government and the market, and provide a "U.S. template" for global legislation.
The clarity in policy has also accelerated traditional finance's entry into the space. Banks such as Citigroup and JPMorgan have begun evaluating issuing their own stablecoins, with tokenized deposits becoming a top priority. Meanwhile, the capital markets have started reassessing the fundamentals of blockchain companies. Following Circle's IPO, infrastructure companies with real cash flows, compliance pathways, and revenue models may become the next alphas.
The total stablecoin market capitalization reached $260.728 billion, with a weekly increase of $3.69 billion. In terms of market share, USDT continues to maintain its lead at 61.99%, while USDC ranks second with a market cap of $64.068 billion, representing 24.57%.
Top three stablecoin networks by market cap:
· Ethereum: $128.832 billion
· Tron: $81.268 billion
· Solana: $11.342 billion
· Hedera: +30.93% (USDC share 99.63%)
· Hyperliquid L1: +23.27% (USDC share 97.56%)
· XRPL: +15.06% (RLUSD share 75.29%)
Data source: DefiLlama
This week, the crypto industry witnessed a crucial turning point. The U.S. House of Representatives passed three key bills related to digital assets with an overwhelming majority, laying the foundation for long-term regulatory clarity.
The "GENIUS Act" establishes reserve, redemption, and disclosure rules for payment-type stablecoins, providing a clear compliance pathway for institutional issuance and receiving rare bipartisan support, marking a shift in stablecoin regulations from political division to policy consensus. The bill was previously stalled due to 12 Republican lawmakers' ambiguous stance on CBDCs but was ultimately voted on after direct pressure from Trump, and is expected to be signed into law on Friday local time.
Meanwhile, the "Clarity Act" sets market structure rules for a broader range of digital assets, attempting for the first time at the federal level to establish boundary standards for tokenized securities, commodities, and utility tokens. The "Anti-CBDC Surveillance Nation Act" explicitly restricts the Federal Reserve from issuing a central bank digital currency without congressional authorization, preserving space for private-sector innovation.
These three bills form a highly coordinated regulatory framework: giving the green light to compliant stablecoins, establishing clear rules for the digital asset market, and setting limits on central bank-issued digital currencies (CBDCs), embodying the core expression of the U.S. regulatory philosophy—supporting free innovation, opposing government dominance, and emphasizing institutional checks and balances. In the current increasingly divergent global regulatory landscape, the United States may have opened up a "liberalism template" with strategic export potential.
With the advancement of the "GENIUS Act", the U.S. banking industry has begun to respond intensively.
Headlining banks such as Citigroup, Bank of America, JPMorgan Chase, PNC, etc., have recently made rare intensive statements, revealing that they are evaluating issuing proprietary stablecoins, promoting tokenized deposits, and even brewing a "banking alliance stablecoin" cooperation framework. The stablecoin issue has become a necessary response for bank executives when facing the capital markets for the first time, showing its structurally impactful effect on bank fundamentals.
This transformation is not accidental. The advancement of the "GENIUS Act" has not only provided a clear regulatory foundation for banks to get involved in stablecoins but has also built a "native advantage area" for banks through institutional design. The bill sets a high threshold for issuers: 100% U.S. Treasury bonds as reserves, monthly audits, and capital requirements—burdensome for non-bank entities but fundamental operations for banks. At the same time, banks can gain privileges non-bank issuers do not have—direct access to core clearing systems like Fedwire and FedNow, unlocking deep integration with the U.S. dollar payment network; engaging in credit creation through "tokenized deposits" within the existing regulatory framework, continuing its most important profit model; legally paying interest to users, making them more attractive in the funding competition. If U.S. treasuries are granted SLR exemptions in the future, this will further reduce bank capital costs.
In addition, stablecoin user behavior itself is eroding the core business of banks. Early stablecoins were seen as "on-ramps and off-ramps" used for temporary exchange between fiat and crypto assets. However, an increasing number of corporate clients are choosing to hold USDC and USDT long-term for supply chain payments and working capital management. This means that funds are no longer flowing back to the traditional banking system but instead are held in the issuer's reserve pool and repeatedly circulated on-chain, causing banks to lose their role as providers of demand deposits and settlement intermediaries. Although currently only about 6% of stablecoins are used for traditional fiat payments, these use cases have begun to weaken banks' control over corporate client funds. As corporate clients get used to using USDC for supply chain payments and USDT for fund allocation, banks not only lose demand deposits but also lose the opportunity to participate in the settlement process.
To counter this, banks are seeking to fight back with "tokenized deposits." Taking Citigroup as an example, its approach is to transform deposit assets into programmable on-chain assets while retaining regulatory compliance and the account system. This aims to enhance liquidity, compatibility, and customer stickiness, allowing banks to enter the on-chain financial ecosystem and lead compliant stablecoin infrastructure. Looking further ahead, if tokenized deposits, bank stablecoins, and existing on-chain assets achieve interoperability, the operation logic of cross-border payment networks will undergo fundamental changes.
Stablecoins are becoming the "currency layer of the internet," and the capital markets have begun to reassess their value based on this. Taking Circle as an example, such companies are no longer classified as banks or SaaS companies but as efficient, scalable financial infrastructure: revenue depends on the reserve spread, growth is driven through channels like Coinbase, yet they undertake the role of reconstructing the payment network. As the trend of "free payments" accelerates, the price difference between the traditional banking sector's high marginal cost of up to 7% and stablecoins' near-zero cost is being rapidly priced by Wall Street. After Circle went public, its stock price surged nearly sixfold, reaching a market value close to 70% of USDC's circulation, making it one of the most dramatically revalued IPO cases in recent years. This reassessment signifies that stablecoins, as compliant financial assets, have gained acceptance in the mainstream market.
After the validation of the Circle model, the market is now seeking companies with similar elements, namely those with real cash flows, predictable revenue, a clear compliance path, and a leading position in a specific vertical.
According to interviews conducted by The Block's editor Yogita Khatri with several venture capitalists, the next batch of crypto-native companies with IPO potential mainly focuses on four directions based on current trends: first, exchanges and brokerage platforms such as Kraken (which has publicly stated its intentions), Gemini, and Bullish (reported to have submitted an S-1); second, custody and settlement infrastructure such as Anchorage and BitGo, which possess licensing and institutional client bases; third, enterprise-focused crypto SaaS providers such as Chainalysis, Alchemy, and Consensys; fourth, non-dollar stablecoins and cross-border settlement networks, which are accumulating real cash flows and regulatory compliance pathways.
In addition, some projects with clear structure and diversified revenue also have mid-term listing potential, including MetaMask (part of Consensys), Flashbots (on-chain MEV infrastructure), and DCG (Digital Currency Group).
Key Takeaways:
· Listed game company Snail Games (SNAL) has announced that it is considering developing its own USD stablecoin. The company is currently assessing the technical, legal, and financial challenges and has hired George Cao, founder of the crypto exchange AscendEX, as an external advisor.
· The company's stock price briefly rose after announcing this plan, but the initiative is still in the exploration phase, with no specific timeline established yet.
· Snail Co-CEO Hai Shi stated that the stablecoin exploration is a natural evolution of the company's innovation strategy and will support a broader evaluation of how blockchain technology aligns with the company's long-term goals in digitizing the entertainment sector.
Why It Matters:
As the US stablecoin regulatory framework is set to be introduced, not only are banking and retail giants like Walmart and Amazon exploring stablecoin issuance, but game companies joining this trend show that stablecoin applications are expanding to more verticals. For Snail, integrating a stablecoin can enable the blockchain game economy, player-driven markets, and cross-border liquidity without relying on traditional payment channels, potentially bringing new business models to the gaming industry.
Key Takeaways:
· The UK government has announced plans to support the wholesale financial markets in identifying the best use cases for Distributed Ledger Technology (DLT) and promoting asset tokenization solutions. It will establish a cross-market working group to drive practical applications.
· The UK Treasury stated that regulators are open to innovative forms of payment, including tokenized deposits and stablecoins, and will test the combination of stablecoins with other payment solutions in a new digital securities sandbox.
· The UK released a draft legislation for stablecoin issuers and exchanges in April this year, showing its determination to become a crypto hub. The global real-world asset tokenization market has grown by 380% over the past three years, with a total valuation of $240 billion.
Why It Matters:
· The explicit support of DLT technology and asset tokenization by the UK government indicates its active competition with the US for the global crypto innovation hub status. This move will drive traditional financial institutions to accelerate the application of blockchain technology, creating a favorable regulatory environment for the tokenization of real-world assets and the digitization of financial infrastructure
Key Takeaways:
· Citigroup Group CEO Jane Fraser confirmed during the quarterly earnings call that the bank is "exploring issuing a Citigroup stablecoin," with the current primary focus still on the tokenization of deposits
· Fraser emphasized that digital assets represent the next stage of digitizing payments, funding, and liquidity, and Citigroup is strategically positioned in four key areas: stablecoin reserve management, fiat-to-crypto conversion channels, crypto asset custody services, and tokenized deposits
· The Citigroup research team predicts that the stablecoin market (largely pegged to the US dollar) could grow to $37 trillion by 2030, with the bank viewing digital assets as the next step in financial digitization following fintech
Why It Matters:
This Citigroup initiative reflects the accelerating trend of traditional financial institutions transitioning into the digital asset space. As the US regulatory framework gradually clarifies, more banking giants are actively embracing stablecoin technology, which could reshape cross-border payment and settlement systems, providing customers with a 24/7, multi-bank, cross-border seamless solution while integrating compliance, reporting, and accounting functions
Key Takeaways:
· JPMorgan Chase CEO Jamie Dimon stated that while he doesn't understand the appeal of stablecoins, the company will participate in both "JPMorgan Chase Coin" and other stablecoin projects to "understand it, get good at it"
· Last month, JPMorgan Chase announced the launch of a limited edition stablecoin for exclusive use by its clients, which differs from widely accepted true stablecoins; Dimon believes that not participating could potentially cede ground to fintech firms
· Citigroup executives have also mentioned exploring the issuance of a Citigroup stablecoin, seeing the greatest opportunity in tokenized deposits and crypto asset custody services; multiple banks may collaborate through the jointly owned Early Warning Services, similar to the previous collaboration to launch the Zelle instant payment service to compete against PayPal
The participation of traditional banking giants in the stablecoin race demonstrates that the financial industry recognizes that blockchain payments may be faster and cheaper than traditional ACH and SWIFT systems. This signals institutional finance's formal entry into the crypto space, potentially accelerating the mainstream application of stablecoins in the payment and settlement sector and having a profound impact on the payment ecosystem.
Key Takeaways:
· U.S. Bank CEO Brian Moynihan stated on Wednesday that the bank has "done a lot of work" on stablecoin development and plans to launch a product at the right time, but further assessment of market size and customer demand is needed.
· Moynihan hinted that U.S. Bank may collaborate with other companies to launch a stablecoin rather than act alone, and the specific timing will be determined based on customer demand.
Why It Matters:
· As the GENIUS Act advances in Congress, with Wall Street giants strategically positioning themselves in the stablecoin space, it shows that traditional financial institutions are actively embracing digital asset innovation. U.S. Bank's entry into this race will further drive the mainstream adoption of stablecoins and potentially reshape the competitive landscape in cross-border payments and settlement.
Key Takeaways:
· Geoff Kendrick, Head of Digital Assets Research at Standard Chartered Bank, stated that once the stablecoin market reaches around $750 billion, it will begin to reshape government bond issuance, monetary policy, and the structure of the U.S. Treasury market.
· Kendrick predicts that with regulatory clarity and bipartisan support from the GENIUS Act, which could be passed as early as next week, the stablecoin market will grow to at least three times its current size of $240 billion by the end of 2026.
· As stablecoins are typically backed by dollar-denominated assets (mainly short-term U.S. Treasuries), the expansion of scale will increase the demand for short-term bonds, potentially forcing the U.S. Treasury to adjust the structure of bond issuance, affecting yield curve dynamics.
Why It Matters:
· The rapid growth of the stablecoin market will redefine global demand for US dollar assets, potentially leading to capital outflows from emerging markets, changing corporate cash management practices, and causing a 540% surge in the stock price of USDC issuer Circle following its listing, reflecting the market's confidence in stablecoins as digital financial infrastructure
Key Points Summary:
· Zhu Taihui, a Senior Research Fellow at the National Finance and Development Laboratory, pointed out that labeling 2025 as the "compliance year" for stablecoins is inappropriate. Developing stablecoins in the United States is not primarily aimed at debt relief, and creating new investment demand for US debt is only an ancillary effect
· Some businesses in the US, Singapore, Europe, and elsewhere already support on-site stablecoin payments. Zhu Taihui predicts that with regulatory openness and technological maturity, places like Hong Kong may be able to pay tuition fees using stablecoins in the future
· Zhu Taihui emphasized that stablecoins are fundamentally different from QQ Coins. Stablecoins can circulate globally and bypass the US-dominated SWIFT and CHIPS systems, avoiding US control and providing a new channel to circumvent US financial sanctions
Why It Matters:
· This perspective reveals that stablecoins are transitioning from theory to real-world payment applications, expanding not only payment scenarios but also possessing strategic value in bypassing the traditional international payment system. This is of significant reference value to China's exploration of new paths in digital payments
Key Points Summary:
· Privacy Pools, a chain-based privacy solution supported by Ethereum co-founder Vitalik Buterin, announced the integration of Sky's USDS stablecoin, marking its first step toward expanding to a "multi-asset privacy pool"
· Privacy Pools, developed by blockchain startup 0xbow, utilize a zero-knowledge proof mixed network system and "linker set provider" technology to ensure that only "clean" funds can enter the pool, providing compliant privacy protection
· This technology stems from a paper co-authored by Buterin with Chainalysis researchers and scholars. Unlike traditional mixers like Tornado Cash, Privacy Pools use "linker sets" as gatekeepers to prevent illicit funds from entering
Why It Matters:
· This integration represents the cryptocurrency space's effort to find a balance between privacy and compliance. By utilizing zero-knowledge proof technology to provide privacy protection for stablecoins while maintaining regulatory compliance, it will support more assets and ecosystems in the coming weeks. This may become a significant development direction for privacy solutions in the stablecoin space.
Key Highlights:
· RippleX developers have introduced the XLS-0089d draft standard, which provides structured metadata for Multi-Purpose Tokens (MPT) on the XRP Ledger. It aims to improve the discoverability and interoperability of tokens across wallets, indexers, and block explorers.
· The standard defines a minimalistic standardization pattern for a 1024-byte metadata field for each token. It includes basic information such as the token name, code, issuer, category, and icon. It also supports deeper off-chain details through external URI links.
· The scheme outlines a clear asset classification system, specifically offering subcategories for Real-World Assets (RWA) like stablecoins, private credit, real estate, equities, etc., making it easier for indexers to differentiate between various asset support tools.
Why It Matters:
· This voluntarily adopted backward-compatible standard aims to balance flexibility with machine readability. While not mandatory, it will significantly enhance adopters' visibility and integration within the XRPL ecosystem. This is particularly beneficial for cross-chain bridges, on-chain analytics platforms, and institutional-grade wallets, helping drive the standardization development of the XRP ecosystem and enhancing user experience.
Key Highlights:
· Stablecoin-focused bank Dakota, founded by former Coinbase Custody Business lead Ryan Bozarth, has announced the completion of a $12.5 million Series A funding round. The round was led by crypto venture fund CoinFund, with participation from 6th Man Ventures, Digital Currency Group, and Kraken's Triton Ventures.
· As a stablecoin-driven digital bank, Dakota has processed approximately $1.6 billion in transaction volume, expecting to reach $4 billion by the end of the year, with over 500 corporate clients, mainly located outside the United States
· The platform offers traditional bank-like checking accounts and yield on deposits, but innovatively uses stablecoins to facilitate fund transfers among multiple banking partners, providing U.S. dollar account services to overseas clients
Why It Matters:
As large banks like JPMorgan Chase, Citigroup explore digital asset integration, and companies like Circle, Ripple apply for banking charters, Dakota represents a new trend of merging crypto with traditional finance, leveraging stablecoin technology to enhance cross-border payments and reduce transaction fees. In a gradually clarifying regulatory environment, it has paved the way for new business models in digital banking and stablecoin applications
Key Highlights:
· Plasma launched the XPL public token sale on July 17th, selling 10 billion XPL tokens (10% of total supply) aiming to raise $50 million, valuing the project at $5 billion, with over 4,000 wallets participating in the pre-sale activity
· XPL, as Plasma blockchain's native token, seeks to build a zero-fee, fully transparent fund transfer infrastructure, with the goal of bringing trillions of dollars in stablecoin funds onto the chain to provide underlying support for global stablecoin transactions
· The token distribution scheme is as follows: 10% for public sale, 40% for the ecosystem and growth, 25% allocated to the team (vested over three years), 25% allocated to investors. The validator network will operate on a proof-of-stake mechanism, with an initial annual inflation rate of 5%, decreasing by 0.5% annually to 3%
Why It Matters:
Plasma combines Bitcoin's security and Ethereum's smart contract capabilities to offer a zero-fee solution for stablecoin transactions. With the backdrop of a gradually clearer stablecoin regulatory framework, this model may attract a significant number of users and developers seeking low-cost transactions, providing a new infrastructure choice for the DeFi ecosystem
Key Takeaways:
· White House Press Secretary Karoline Leavitt stated on Thursday that the Trump administration still supports implementing a microtax exemption policy for cryptocurrency transactions, continuing to explore legislative solutions to make crypto payments as "simple and efficient as buying a cup of coffee"
· Earlier proposals for cryptocurrency microtax exemption did not make it into the "One Big Beautiful Bill Act" signed by Trump on July 4, which was originally intended to exempt cryptocurrency gains under $300 from taxes
· Currently, the IRS requires individuals to report all cryptocurrency transactions, regardless of capital gains or losses, hindering the use of cryptocurrency for small everyday payments
Why It Matters:
The microtax exemption policy would eliminate tax barriers that prevent individuals from using cryptocurrency for everyday small transactions, promoting the practical application of cryptocurrency as a means of payment. This aligns with the Trump administration's goal of making the U.S. the "Crypto Capital of the World" and demonstrates the new government's commitment to advancing crypto-friendly policies
Key Takeaways:
· Wyoming is testing its upcoming state government stablecoin, the Wyoming Stable Token (WYST), for real-time payments to government contractors
· The pilot project utilizes Hashfire's Avalanche blockchain-based Document Authentication Protocol to enable instant WYST payments, shortening the government vendor payment cycle from the usual 45 days to seconds
· Wyoming had previously announced plans to launch this USD-backed stablecoin as early as July, with this testing phase preparing for its official release
Why It Matters:
This project represents a significant milestone for U.S. government entities in adopting blockchain technology, showcasing how stablecoins can improve governmental financial system efficiency and drastically reduce payment cycles. It may serve as a template for innovative public sector payments for other states and federal agencies, setting a benchmark for blockchain applications in governance
Key Points at a Glance:
· The China Academy of Information and Communications Technology (CAICT) recently held a "Stablecoin and Industrial Digital Asset Seminar" to discuss key topics such as stablecoin policy regulation, industrial digital asset transformation, and the convergence of RWA (Real World Asset) tokenization and industrial Internet development
· Representatives from the Ministry of Industry and Information Technology (MIIT) IT Development Department attended to provide guidance, demonstrating the government's increased focus on the application of digital assets in the industrial sector
· The conference attracted experts from financial institutions such as Guosen Securities, SoftBank Asia Venture, and Fosun International, indicating that financial capital is actively paying attention to investment opportunities in the industrial digital asset field
Why It Matters:
This seminar marks a new stage in China's exploration of stablecoins and industrial digital assets. Official institutions are gradually promoting the integration of traditional industry with blockchain and digital asset technology. This may provide policy guidance for industrial asset tokenization and digital finance, and it is instructive for the combination of industrial Internet and financial innovation
Key Points at a Glance:
· Financial Stability Board (FSB) newly appointed Chair and Bank of England Governor Andrew Bailey stated in a letter to the G20 that assessing the role of stablecoins in payments and settlements will be a priority for the FSB
· Bailey emphasized that the FSB should continue to implement agreed-upon stablecoin regulatory recommendations and monitor developments in various jurisdictions. This statement was released ahead of the upcoming two-day G20 meeting
· Since proposing monitoring rules for stablecoins in 2021, the FSB has been monitoring this area closely. Bailey recently warned global investment banks not to develop their stablecoins, as this could weaken credit creation and monetary policy control
Why It Matters:
With the US Senate passing the GENIUS stablecoin bill and the stablecoin market reaching new heights, global regulatory bodies are intensifying their focus on stablecoins. As the global financial stability coordination body, the FSB has prioritized stablecoins, indicating that the international regulatory framework is rapidly taking shape, which may impact future stablecoin policies worldwide
Key Takeaways:
· The Federal Reserve, FDIC, and OCC issued a joint statement confirming that banks may provide crypto asset custody services, but must adhere strictly to existing laws and regulations, and enhance risk management
· The statement requires banks to conduct a comprehensive risk assessment and control measures regarding crypto asset key management, third-party custodial relationships, cybersecurity measures, compliance, and anti-money laundering
· Banks must ensure that relevant personnel have the necessary technical capabilities, enhance customer agreement terms, and regularly conduct internal and external audits to safeguard customer crypto assets
Why It Matters:
While this statement did not establish new regulatory requirements, it outlined compliance standards for traditional banks participating in crypto asset custody business, paving the way for banks to offer crypto-related services, and is expected to promote further integration between traditional finance and the crypto industry
Key Takeaways:
· Payment solutions company Ripple has confirmed its plan to apply for a license under the European Union’s Markets in Crypto-Assets (MiCA) regulation to expand its cryptocurrency and stablecoin operations in the European Economic Area
· Ripple registered Ripple Payments Europe S.A. in Luxembourg at the end of April this year and reportedly applied for a Luxembourg e-money institution license, although the company has not confirmed or denied this report
· Luxembourg is becoming a hub for crypto companies seeking MiCA compliance, with several prominent institutions such as Coinbase, Bitstamp, and Standard Chartered Bank already holding crypto asset service provider licenses in the country
Why It Matters:
Ripple's pursuit of a MiCA license indicates the company's active expansion into regulated markets. The clear regulatory framework in Europe is attracting more and more crypto companies to establish compliant operations, which may promote the mainstream adoption of crypto payments in Europe while strengthening Ripple's competitive position in the global payments space
Key Takeaways:
· Circle has submitted an application to the Office of the Comptroller of the Currency (OCC) to establish the first dedicated digital currency banking institution in the United States
· This new bank will not offer traditional banking services but will focus on trust functions related to the USDC stablecoin, reserve management, and providing cryptocurrency custody services to institutional clients
· This move is a significant step for Circle in seeking deeper integration into the U.S. regulatory framework, aiming to provide a more robust regulatory foundation for its USDC stablecoin business
Why It Matters:
This move by Circle marks a key step in stablecoin issuers transitioning into the traditional financial system. If approved, it will set a precedent for digital asset companies obtaining a banking charter, significantly increasing the institutional adoption and compliance of USDC while paving the way for the integration of stablecoins into the traditional financial system.
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