Industry news:
— Tether unveiled USA₮, its officially regulated stablecoin offering.
Key graf: The introduction of USA₮ and appointment of Bo Hines marks Tether’s next chapter in strengthening U.S. dollar dominance through transparency and innovation.
— Stablecoin group Tether wants to invest in gold miners, via the FT. More from CoinTelegraph.
Cash Equivalence take: There was some speculation they were shifting into gold by selling bitcoin, but Tether boss Ardoino denied this noting people had misinterpreted Tether attestations and failed to account for their investments in XXI, aka 21 Capital, the crypto joint venture they launched with Cantor Fitzgerald and Softbank in April.
— Euro-stablecoin Allunity has entered into a partnership with tradias, a leading regulated digital asset market maker and OTC trading platform.
The plan is to integrate EURAU trading pairs into tradias’ OTC trading platform, with tradias designated as the Liquidity Provider, the press release says.
— Ethena jumped 12 percent after StablecoinX secured $530m investment, (via the Block.) More here & here.
Key graf: “This partnership will promote the adoption of $USDe, $USDtb, and other unreleased Ethena products on Hyperliquid. Furthermore, Based plans to support $USDe and USDtb as payment options on its debit card and embed savings functionality to further expand product use cases. Notably, this investment will exclusively benefit sENA token holders, with future sENA stakers receiving exclusive Based Points rewards.”
The merged entity is preparing to launch on Nasdaq.
WLFI Saga News:
— Tron founder Justin Sun’s stablecoin has launched natively on Ethereum. More here.
Cash Equivalence take: The move comes after WLFI, the Trump-backed stablecoin, blacklisted Justin Sun’s tokens claiming he had engaged in an elaborate scheme to manipulate the value of the tokens, surpressing their price.
But the story goes much deeper than that. In moving to freeze Sun’s sums, WLFI proved it was prepared to emulate standard tradfi practice — notably the FATF’s platbook — to freeze assets when stakeholders break its rule-based order. The difference is, while the FATF mainly targets political enemies or those money laundering the proceeds of crime or engaging in terrorist financing, WLFI’s freezing targeted currency manipulators.
Ostensibly, WLFI acted to prevent damage to smaller or passive tokenholders if some holder tried to trigger a dump. If that’s not a fitting microcosm run-through of how crypto based systems might cope when targeted by sovereign-level currency manipulators, we don’t know what is.
We’ve heard it said that the Sun and Trump empires coming together in WLFI is akin to the “five families” coming together to parlay in the Godfather. Which is to say, it’s an experiment in figuring out if rival international factions can cooperate in a new crypto world-order without having to resort to physical turf wars. In the process they’re hoping to figure out the ground rules and points of vulnerability.
Except, in this instance, the families in question aren’t regional heads on domestic turf, but rather the shadowy interests that really hold power in China and the U.S.
Clearly, Sun did not expect the U.S. faction to resort to freezing assets as a form of rule enforcement — potentially betting that the U.S. side would not be keen to repeat the mistake of stigmatizing itself as it did when it moved to officially freeze Russian assets.
But rather than cripple WLFI, the news of the freezing did something unexpected:
By September 7, WLFI began to recover.
In conventional statecraft currency wars, efforts to prop-up one’s currency in the face of stigma, poor economics or vigilante attacks would ordinarily require the spunking of large quantities of reserves. In the crypto world, that support comes not by deploying official foreign exchange reserves but the resources of aligned deep-pocketed whales, whose ultimate supporting capacity is unknown.
One could say, deep-pocketed “off the books” whales are to their native tokens what the official U.S. Exhcange Stablization Fund (ESF) is to the U.S. dollar.
But it turns out WLFI wasn’t just being supported by deep-pocketed crypto whales.
As Bloomberg highlighted on September 9, a surprising turnaround in the value of WLFI may have been spear-headed by a hearts and minds psyop operation on social media, emulating the old playbook of the XRP Army of yore. (You can read about our experiences with them here. And here.)
As Bloomberg noted:
“Years ago, the XRP Army picked up the flag of the namesake coin affiliated with Ripple and carried it to new highs. Then there are the Link Marines — supporters of the Chainlink token — who number in the thousands and created euphoria around the still fairly niche coin. So it shouldn’t have come as a surprise that World Liberty Financial Inc., the project backed by the Trump family, now has its own small army of fervent promoters, too.”
HODL for your country!
According to the news outlet, in recent days a slew of accounts on X have taken on the cause of the WLFI, forging their own army, with the hashtag #WLFIArmy popping up in tweets.
Their playbook is identical to the old XRP one. Amplification and reiteration of morale-boosting content designed to encourage users to buy WLFI and HODL, plus the dedicated trolling of critics in a bid to silence them and bury their critiques. [Trust us, we know about those.]
Thus far the impact has been lacklustre, with the price of WLFI slipping back to post Sun-freezing lows. But if this is really a virtual turf war between Chinese and U.S. power interests, they’ve probably only gotten started.
More curiously still, the WLFI Army isn’t the only $-boosting crypto that’s currently mobilizing.
The XRP army seems to have reformed, at first sight, to shill Ripple’s official foray into USD stablecoins.
But there’s more to this than usual. The vibe is “patriotic romanticism”. Or as one account explained “We are not a meme, not a trend, we are a CULT, a movement born from the soul of the $XRPArmy”.
What’s weirder than usual is that the hashtag they’re supporting, $ARMY, isn’t exclusively linked to any particular crypto or product. On the contrary, its icongraphy appears to be generically supporting all dollar stablecoins.
Memetic currency warfare may have just begun.
In any case here’s a flavor of the gun-ho imagery and videos.
To compare with the original:
Statecraft news:
— Russia slammed stablecoins saying they were a scheme to shove $35 trillion of U.S. debt into crypto, devalue it, and reset the system. Here’s the speech from Putin’s special adviser Anton Kobyakov.
Cash Equivalence take: Kobyakov started by highlighting the U.S. was trying to rewrite the rules of the gold and cryptocurrency markets. Their plan was to lure all the outstanding U.S. debt into stabelcoins and then devalue it.
— X account Evan alleged that the current payment system that’s set up and mandated in Syria by an unregulated, unlicensed entity from Turkey, is siphoning $4m annually to private entities with longstanding relationships with the Assad regime.
Evan continues to explain that the Syrian Ministry of Finance has mandated the Sham Cash app for public sector salary payments, presenting it as a modern, central bank–linked system. In reality, he says, it is an unregulated, unstable, and opaque platform run by Sham Bank (a Turkish-registered money exchange) and developed by Northsoft, with no accountability.
Summary: Sham Cash was developed and rolled out during the Assad government, first as a “digital wallet” for payments, bills, and eventually salary disbursement. It became the official channel for public-sector salaries under Assad starting in 2023–2024
Its exclusive partnership with Al-Haram and Al-Fouad — firms tied to the Assad regime — creates a monopolistic fee pipeline that extracts $3–4.3 million annually from public wages. Employees frequently face outages, security, privacy, and surveillance risks.
This setup resembles shadow banking, concentrating financial power while undermining transparency and stability. Despite GCC states investing billions (e.g., ~$6.4B from Saudi Arabia) into Syria’s reconstruction, the enforced use of Sham Cash jeopardizes these efforts by routing funds through a sanctioned, high-risk channel.
While GCC countries tacitly tolerate Sham Cash to avoid geopolitical disruption, this stance carries serious long-term reputational and financial integrity risks. Turkey, meanwhile, appears to be exploiting the system as a leverage tool.
Awkward? Sham may mean Levant in Arabic, but it also rhymes with scam.
— ‘Binance dollars’ replace Venezuela’s bolivar as inflation hits 229 percent (via CoinTelegraph)
Key grafs: “There are currently three rates for the US dollar in Venezuela. The official Central Bank rate (BCV) is 151.57 bolívars per USD, the parallel market rate is 231.76, and the USDt rate on Binance is 219.62. USDt’s liquidity and reliability make it the most used rate among vendors and consumers.
“People and companies prefer to price their goods and services in USD, and receive payment for the same in USD,” Di Bartolomeo said. He noted that USDt now functions as both a better dollar and a financial equalizer across social classes.”
Yield wars:
— Stablecoins must offer yield to compete: former Standard Chartered Tokenization Head says (via Decrypt).
Key graf: “Banks have pressed Congress to close the door completely. In an August 12 letter, the Bank Policy Institute and four other major trade groups warned lawmakers that leaving the so-called loophole intact could drain as much as $6.6 trillion from the U.S. deposit system.
Without an explicit prohibition applying to exchanges, which act as a distribution channel for stablecoin issuers or business affiliates, the requirements in the GENIUS Act can be easily evaded and undermined by allowing payment of interest indirectly to holders of stablecoins,” it said.
Cash Equivalence take: The question over the degree to which the Genius Act does or does not allow for yield enhancement has been a tricky one to answer. ECB President Christine Lagarde flagged stablecoin yield competition as a potential destablizing force for the euro even before the Genius Act had been properly reconciled. At the time of her comments, the wording of the Act strongly implied stablecoins would be prohibited from offering interest either in either direct or in-direct form.
The ECB was guiding at the time that Lagarde was concerned that a loophole might be introduced at the final stage or that other “work arounds” might come into play.
Extensive chats with industry figures about the nature of those “work-arounds” suggested that while issuers would likely be banned from offering inducements (i.e. rewards and giveaways), third-party providers — notably stablecoin money market funds (MMFs) — would be able to offer superior yields to lure savings out of Europe.
This was very much the line taken by Wired when it published this story last week. “The law doesn’t ban crypto exchanges from offering customers rewards on their stablecoin holdings, meaning stablecoin holders are still able to receive financial incentives that look a lot like interest,” the article read.
But news that banks have been lobbying Congress to close the door completely (as per the Decrypt story above), speaks of the panic on Wall Street vis-a-vis the prospect of non-banks encroaching on their turf.
It also suggests there is now a real risk that both the ECB and the PBOC — both of whom have belatedly realized that “if you can’t beat them, you must join them” — respond not just by encouraging local stablecoins to be launched, but also by banning third-party inducements for non local-currency stablecoins on their shores.
Any such bans, however, would amount to an attack on the right of private individuals to enter into non-bank credit agreements. They’d also amount to the blurring of the lines between was constitutes “deposit taking” and “financing” on a broader basis. Should tokenization be considered a capital market mechanism or a monetary one? Or both? Should usury be the exclusive domain of licensed banks, or accessible to all? Can you even stop this sort of thing? (E.g. Think how Sharia banking synthesizes interest via financial engineering).
Banks are understandably miffed. They see themselves as unable to compete given the lighter-touch regulatory environment for exchanges, MMFs and stablecoins.
But there’s also something to be said about the development of a parallel banking system which encourages depositors to be fully cognizant of the risks they take when transferring their zero-yielding stablecoins to third parties within the constructs of voluntary contractual agreements.
Whatever happens, clearly, the implications for capital markets if banks ever get their way need to be carefully thought through.
Deep thinkers:
— Tax justice crusader Richard Murphy argues stablecoins could crash our economy on Naked Capitalism.
Key argument: The article argues that stablecoins — cryptocurrencies pegged to assets like government bonds — are being promoted as safe but in reality pose major systemic risks. They replicate the same vulnerabilities of shadow banking before the 2008 crisis: claims of stability without real oversight, the temptation to chase higher yields with riskier backing, and the likelihood of collapse under stress. Because they are marketed as money but lack government guarantees, their failure could trigger panic and ultimately force governments to step in with bailouts, shifting losses from private speculators to the public.
Beyond the financial risks, the author warns that stablecoins undermine democratic control over money. By creating private forms of currency outside central banks, they weaken governments’ ability to manage the economy and place monetary power in the hands of crypto entrepreneurs and wealthy backers. This shift, if left unchecked, threatens not only financial stability but also the accountability and legitimacy of democratic institutions, making strong regulation — or outright prohibition — necessary.
Key graf: “And stablecoins aren’t just a technical issue. That risk of failure also makes them a democratic one. If private money creation replaces public authority, accountability disappears. The economic policy risk that could flow from this, as a consequence of the greed of oligarchs and their political patrons, is to the whole idea of elected government.
Stablecoins erode democratic sovereignty and hand control to unaccountable elites. So, regulators must stop pretending that stablecoins are harmless experiments. They must recognise them for what they are: systemic risks in the making. And governments should not allow the private minting of tokens that mimic safe deposits.”
— State Street gives its take on the stablecoin phenomenon, the Genius Act and whether this will create new demand for USTs.
Key graphic:
Regarding the yield curve implications, State Street says incremental demand for Treasuries will primarily target the short-end of the yield curve, exerting downward pressure on yields at that maturity.
Key graf: “This [demand] effect is tempered by asset substitution, which does not generate net-new demand for Treasuries — unlike genuine acquisitions driven by tokenized finance growth.
If stablecoins significantly displace bank deposits, banks may scale back their traditional role in maturity transformation, decreasing their demand for longer-dated Treasuries. Such a shift could exert steepening pressure on the yield curve, potentially increasing term premiums.”
Cash Equialence take: Rather than considering stablecoins an absolute source of fresh demand for Treasuries, it’s better to think of them as a market-led approach to yield-curve control. Or as we highlighted in our previous post, a war bond campaign in the constructs of a free market.
What we’re processing:
— Nasdaq makes push to launch trading of tokenized securities (via Reuters). See the full proposal here.
— Ant Digital Technologies is tokenizing $8 billion in energy assets on AntChain (via Bloomberg).
— The stablecoin stack is going modular with Metamask dollars (Fintech Blueprint)
— Dave Birch on why stablecoins are a necessary, but interim, development (OMFIF).
Note from Cash Equivalence:
If you’re an industry practitioner, academic, central banker or any other form expert and have a story to tell or a view to express, do get in touch with Cash Equivalence.
You can reach us on [email protected]. We’d love to hear from you.
But also, please do spread the word. We would love to turn Cash Equivalence into a fully professional operation, bringing in bigger and bolder names as contributors under one hat.
Yes, yes. We have a deck too. And of course we’ll consider stablecoin funding.
