Editor - Jackie

🌍 Macro: Vitalik’s three stablecoin gaps, $18B card spend, and DeFi slippage nukes $3.84M to $112K

Vitalik flags three unsolved problems for decentralized stablecoins

• Vitalik Buterin listed three gaps: a stable target better than a USD index, capture-resistant oracles, and staking yield as direct competition.
• He argued USD tracking is fine short term, but questioned what happens over a 20-year horizon if the dollar hyperinflates.
• He warned oracle capture can be bad for users unless the cost of capture exceeds the protocol token’s market cap, and said his “solutions” are not endorsements.

Crypto card spending reaches an $18B annualized run-rate as stablecoins show up in everyday payments

• Artemis data showing crypto card volumes grew from about $100M per month in early 2023 to more than $1.5B by late 2025.
• Spending now exceeds $18B annualized, nearly matching peer-to-peer stablecoin transfers at $19B.
• Cards remain the dominant bridge because they require no new merchant integrations, and noted USDC outliers in India (47.4%) and Argentina (46.6%).

DeFi slippage bug turns a $3.84M swap into $112K - A YO Protocol user received just $112,000 after a $3.84 million swap due to insufficient slippage protections, an issue the protocol said should have blocked despite $61.8 million currently locked.

Galaxy warns a U.S. crypto bill could expand transaction-freeze powers - Galaxy warned a draft U.S. crypto bill could significantly expand Treasury’s ability to freeze stablecoin and crypto transactions for up to 30 days, marking a major surveillance-state expansion ahead of a Senate vote.

Standard Chartered doubles down on Ethereum’s stablecoin and tokenization edge - Standard Chartered said Ethereum’s dominance in stablecoins and over $10 billion in tokenized assets underpins its bullish outlook, with ETH potentially reaching $40,000 by 2030 as throughput scales higher.

🔍 Policies: Senate draft kills passive yield, Dubai bans privacy tokens, and ABA warns up to $6.6T at risk

Senate draft moves to bar passive stablecoin yield while allowing activity-based rewards

• Decrypt said the draft would prohibit any interest or yield paid solely for holding a payment stablecoin.
• The American Bankers Association warned up to $6.6 trillion in deposits could be at risk.
• The prohibition would not apply to activity-based rewards tied to actions like transactions, remittances, or liquidity, and three senators criticized having less than 48 hours to review before markup.

Brian Armstrong pulls support, saying the Senate crypto bill is getting worse

• Coinbase CEO Brian Armstrong said he would rather have no bill than a bad bill, according to DL News.
• Armstrong cited erosion of CFTC authority, a de facto ban on tokenized equities, and tighter limits on rewards tied to stablecoin holdings.
• The Digital Chamber still strongly supports advancing the bill, while Ripple’s Brad Garlinghouse called it a massive step forward.

Industry pushes back on stablecoin yield limits and highlights new developer protections - Crypto industry groups criticized a Senate framework that would ban passive stablecoin yield while expanding SEC oversight and disclosures, warning the changes could weaken dollar stablecoins and advantage foreign CBDCs under the proposed bill.

Bitcoin advocates ask lawmakers to expand stablecoin tax relief and set new thresholds - A coalition urged lawmakers to extend de minimis tax relief beyond stablecoins to Bitcoin and major tokens, proposing new thresholds and cash-like treatment for compliant stablecoins as merchant adoption expands nationwide.

Pakistan signs MOU to explore stablecoin remittances tied to USD1 integration - Pakistan signed an MOU to explore regulated stablecoin remittances via USD1 integration with its central bank, targeting efficiency gains across a $36 billion annual remittance market.

Tether wins a Russian trademark for tokenization brand Hadron - Russia approved Tether’s Hadron tokenization trademark through 2035, covering blockchain financial services amid a $13 billion domestic tokenization market and heightened sanctions-related scrutiny.

Robinhood reaffirms support for market structure bill even as markup gets pulled - Robinhood reiterated support for the Senate market structure bill despite a delayed markup, citing user demand for staking and tokenized stocks constrained by regulatory uncertainty.

Novogratz urges lawmakers to advance crypto legislation even if stablecoin rewards aren’t perfect - Galaxy CEO Mike Novogratz urged lawmakers to advance crypto legislation despite imperfect stablecoin reward provisions, arguing compromises can be fixed later as the markup process was postponed.

Bank of America CEO warns yield-bearing stablecoins could pull up to $6T in deposits from banks - Bank of America CEO Brian Moynihan warned that allowing yield-bearing stablecoins could shift up to $6 trillion from bank deposits, likening them to money market funds amid intense amendment-driven debate.

Thailand orders tighter monitoring of USDT “grey money” trades as daily volume hits 2.8B baht - Thailand ordered tighter monitoring of USDT trades after daily volumes hit 2.8 billion baht, citing foreign participation and links between stablecoins and illicit transaction activity.

Coinbase publicly reverses course on Senate crypto bill as stablecoin yield becomes a flashpoint - Coinbase withdrew support for the Senate crypto bill, saying restrictions on stablecoin yield driven by banking pressure made the draft worse than the status quo despite its $116 million political war chest.

PNC CEO says stablecoins must decide whether they’re payments or money market funds - PNC CEO Bill Demchak said stablecoins paying interest resemble money market funds and should follow the same rules, framing the debate over whether rewards violate the GENIUS Act’s payments-focused design.

Dubai bans privacy tokens on DIFC exchanges and tightens stablecoin definitions - Dubai’s DFSA banned privacy tokens on DIFC exchanges and narrowed stablecoin definitions to fully backed fiat tokens, requiring firms to document token suitability under updated rules.

🔥 Biz Beats: Visa + BVNK wire payouts via stables, Goldman scales tokenization pilots, and MetaMask adds Tron’s $21B daily stablecoin rail

Visa teams with BVNK to enable stablecoin-funded payouts on Visa Direct

• BVNK will power stablecoin-funded payouts across Visa Direct.
• Businesses will be able to send funds directly to recipients’ stablecoin wallets, according to Decrypt.
• Visa’s Mark Nelsen said stablecoins can operate when banks are closed, and Decrypt reported wider access is expected in H2 2026 after USDC wallet payout pilots.

MetaMask adds native Tron support to move USDT and stake TRX

• MetaMask rolled out native support for the Tron network across its mobile app and browser extension.
• The update lets users send USDT on Tron, stake TRX, and manage Tron assets inside MetaMask.
• Tron DAO said Tron handles more than $21 billion in daily stablecoin transfer volume, and The Block noted this follows MetaMask adding Solana and Bitcoin support.

Goldman Sachs ramps up tokenization and stablecoin experimentation under shifting U.S. rules - Goldman Sachs is increasing investment in tokenization and stablecoins as it selectively tests use cases while closely tracking evolving U.S. regulation that David Solomon says will shape the pace of real-world adoption.

Franklin Templeton refits a money market fund to qualify as a stablecoin reserve under GENIUS - Franklin Templeton restructured its LUIXX money market fund to meet GENIUS Act reserve standards by holding only short-term Treasuries and launching an onchain share class to expand institutional access.

Safe and Ethena partner to cut gas costs for USDe and boost rewards 10x - Safe and Ethena partnered to enable gas-free USDe transactions and 10x rewards for Safe multisigs, aiming to deepen DeFi adoption of USDe, which uses a delta-neutral model rather than fiat reserves, across billions in secured stablecoin holdings.

Interactive Brokers adds 24/7 USDC funding and says RLUSD and PYUSD are next - Interactive Brokers enabled 24/7 USDC funding with near-instant trading access and plans to add RLUSD and PYUSD next, using multi-chain deposits automatically converted to dollars via a streamlined process.

Gusto partners with Zerohash to offer stablecoin payouts for non-U.S. workers - Gusto partnered with Zerohash to enable stablecoin payouts for non-U.S. workers, cutting settlement times to minutes for global contractors using custodial or self-custodial digital wallets.

Korea’s KB files patent for a stablecoin-linked credit card flow - KB Card filed a patent for a system that lets users spend stablecoins through existing credit cards while preserving rewards and protections, aligning with South Korea’s evolving stablecoin policy debate.

ClearBank selects Taurus to power MiCAR-compliant stablecoin services and Circle connectivity - ClearBank selected Taurus to provide wallet infrastructure supporting MiCAR-compliant USDC and EURC, including mint-and-redeem access via Circle Mint and future participation in the Circle Payment Network.

Societe Generale and Swift test tokenized bond settlement using cash and stablecoins - Societe Generale and Swift tested tokenized bond settlement using cash and the EURCV stablecoin, leveraging Swift orchestration and ISO 20022 standards to enable faster, end-to-end on-chain settlement.

💡Rollouts: WLFI lending launches with ~$20M supplied, 27% USD1 incentives, and Citrea debuts Treasury-backed ctUSD

World Liberty Financial launches a crypto lending platform with USD1 and major stables

• WLFI launched World Liberty Markets for lending and borrowing.
• Users can now supply and borrow USD1, USDC, USDT, ETH, cbBTC, and WLFI, with the platform powered by Dolomite.
• Decrypt said the protocol has around $20 million in supplied assets and offers a 27% incentive rate on USD1, with WLFI calling it the first of many products over the next 18 months.

Citrea launches ctUSD, a Treasury-backed stablecoin for its Bitcoin ecosystem - Citrea launched ctUSD, a 1:1 Treasury-backed stablecoin with a single canonical asset, broad geographic availability, and built-in compliance controls for lawful freezing and blacklisting.

USD1 launches prediction market pools on Myriad with MoonPay rails - USD1 went live on Myriad as the first WLFI-linked prediction market integration, enabling users to fund markets via crypto or fiat through MoonPay-powered rails.

Cysic and Fluxe launch a compliant privacy protocol for stablecoin payments - Cysic and Fluxe launched a zero-knowledge privacy protocol for stablecoin payments that preserves regulatory compliance while dramatically reducing proof times using custom hardware and a large distributed network.

World Liberty Financial launches a crypto lending platform with USD1 and major stables - World Liberty Financial launched its lending platform allowing users to supply and borrow USD1 and major crypto assets, debuting with roughly $20 million supplied and aggressive USD1 incentives as part of a broader product roadmap.

💲Money in motion: This week’s hottest stablecoin industry financing moves!

👋 That’s your stablecoin scoop for the week!

Until next time — AllScale Weekly

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