The Weekly Stable (Vol 8)

Hi stable subscribers,

This week was huge for stablecoin regulation, but before we dive in, I have a quick favor to ask.

We want to make The Weekly Stable your go-to resource for critical stablecoin analysis. Help us do that by taking this 1-minute survey on what you want more (or less) of. 

Now, on to the big regulatory shifts: The OCC reversed anti-crypto policies, the White House held its first-ever Crypto Summit, draft stablecoin legislation saw key updates, and the House Financial Services Committee held a major hearing.

It’s very apparent how far the regulatory environment has shifted this administration, if you take a step back, it wouldn’t be an exaggeration to call it monumental. So although it might seem difficult, try not to get caught up in the current market malaise.

P.S. I’m actively posting insights and commentary on X/Twitter, so if short form is more your thing, follow me on X at @chuk_xyz.

(Find us online at @chuk_xyz, linkedin/chuk-okpalugo, @thestablecon and linkedin/stablecon)

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The Office of the Comptroller of the Currency (OCC) lifted approval and control requirements for banks engaging in cryptocurrency activities. This means banks can:

For years, regulatory pressure led to debanking of crypto firms and stifled institutional adoption. Now, the OCC is taking a technology-neutral approach, allowing banks to engage with digital assets without arbitrary restrictions. This is one step closer to fully reversing the anti-crypto policies by US government agencies. 

Look out for reversals of policies by the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve, particularly with respect to access to Fed master accounts by crypto-related banks such as Custodia Bank who are currently fighting the Federal Reserve in court over this very issue.

White House Crypto Summit

“We are going to keep the US the dominant reserve currency of the world and we will use stablecoins to do that” - Scott Bessent, US Secretary of the Treasury

This landmark event brought together prominent cryptocurrency industry leaders from companies like Coinbase, MicroStrategy, Anchorage Digital, alongside key administration officials. While largely symbolic (it garnered mixed reviews from industry observers), attendees reportedly left feeling generally positive about the conversations they had and optimistic that further clarity from the administration would follow.

The key takeaways were that the administration:

House Financial Services Committee Hearing

“The goal of our digital assets policy is to make sure that the next wave of crypto and Web3 businesses emerge in basements and in dorm rooms, not in boardrooms and law firms.” - Rep. Bryan Steil

The House Financial Services Committee, led by Chairman French Hill, held a hearing on Tuesday to explore a federal framework for payment stablecoins, including examining the updated STABLE Act bill text, as well as the consequences of a Central Bank Digital Currency (CBDC) in the United States. Speakers included industry leaders Caroline Butler, from The Bank of New York Mellon, Stripe’s Patrick Collison and Paxos’ Charles Cascarilla. 

The main themes were:

Quotes and full testimonies from the invited industry can be found here and the HFSC X account has short clips of various committee members' remarks.  It's worth noting that the account has also been publishing lots of pro-stablecoin educational content this week, truly a remarkable shift from the last few years. 

Brale and Etherfuse launch MXNe, a peso-backed stablecoin on Base, cutting fees and speeding settlements for Mexico’s on-chain payments. It’s the first MXN denominated stablecoin on Base and is in line with Coinbase’s to bring stablecoins from all over the world together

Circle launches V2 of their Cross-Chain Transfer Protocol to trim cross chain settlement time from an average of 13 to 19 minutes for a typical blockchain transaction between Ethereum and Layer 2 blockchains to only seconds

Falcon Finance launch a synthetic dollar going beyond positive funding rate arbitrage to incorporate a broader range of yield bearing strategies. Think of this as an iteration of Ethena's USDe

Noble launched a yield-bearing stablecoin called the Noble Dollar (USDN) achieving a market cap of $18 million as of this writing. The Noble Dollar is supported by short-duration U.S. Treasury Bills, which are managed by the M^0 Protocol, a decentralized platform for issuing stablecoins. Stablecoins issued on the M^0 Protocol now have a total market cap of $124 million. Recently, M^0 announced that it will support Superstate’s USTB, the first tokenized money market instrument to serve as collateral within the M^0 network.

Plasma the EVM compatible Bitcoin side-chain purpose-built for stablecoins, is announcing the Plasma Stablecoin Collective, a dedicated stablecoin community on discord

Mesh, a crypto payments network, closed an $82M Series B funding round, which was settled almost entirely with PayPal USD (PYUSD) stablecoin.

Binance received $2B stablecoin investment from Abu Dhabi’s MGX. It’s the exchange's first institutional investment, the single largest investment into a crypto company and the largest investment ever paid in crypto (stablecoin).

BNY, the nation’s oldest bank, is expanding the services it handles for Circle, allowing some clients to mint and redeem USDC directly through the bank. This is the latest sign that U.S. banking access for the crypto industry is easing under a friendlier regulatory environment.

The European Central Bank announces plan to launch a CBDC by October 2025 

Ondo Finance, an issuer of tokenized treasuries, has joined the Mastercard network that connects financial institutions with businesses to improve cross-border payments. Ondo's Short-Term U.S. Government Treasuries Fund (OUSG) investment product will be available to businesses on Mastercard's Multi-Token Network (MTN), giving them access to yield

Stablecon adds Global Dollar Network as its newest partner. The Global Dollar Network is an open network designed to accelerate and reward global stablecoin adoption. Network partners include Anchorage Digital, Bullish, Galaxy Digital, Kraken Digital Asset Exchange, Nuvei, Paxos and Robinhood

3Jane proposes a whitepaper for the first capital-efficient and scalable money market on Ethereum. An on-chain unsecured credit facility where lenders can deposit USDC and borrowers can borrow at 0% collateral based on a hybrid on and off chain credit score

Tether has frozen $28 million worth of USDT on Russian crypto exchange Garantex, which has been sanctioned by the European Union for links to the Russian government and criminal organizations.

OCC lifts approval and control requirements for banks engaging in cryptocurrency activities in new interpretive letter.

Thailand regulator adds USDC, USDT stablecoins to approved cryptocurrencies

Both the GENIUS and STABLE acts were updated this week signalling steady progress towards updated legislation. The latest draft of the GENIUS Act enhances transparency and enforcement by requiring issuers to submit monthly liquidity reports detailing reserve composition and to comply with transaction freeze orders. 

Ripple secures Dubai license to offer crypto payments in UAE

The Infrastructure Inversion: How Stablecoins Are Silently Rebuilding Global Finance

The Death of Crypto and the Beginning of Onchain Finance

Are Stablecoins A New Financial System or Will they Be Replaced? 

Stablecoin Myth Busting