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Second subscriber note: As we dive ever deeper into stablecoins, we’re accumulating more knowledge than we have time to write up. We would like to invite subscribers to reach out to us directly via the chat features here or via the Blind Spot Discord, if you require more substance or insight.
Industry news:
— Ant Group issued “ANTCOIN” trademark filings in Hong Kong despite Beijing’s pushback (via CoinLaw).
Summary: The Chinese fintech giant behind Alipay filed a series of trademark applications in Hong Kong, including “ANTCOIN,” covering services such as stablecoin issuance, digital-asset custody, and blockchain settlement. The filings coincide with Hong Kong’s new regulatory framework for fiat-referenced stablecoins (effective August 2025), and indicate Ant’s intention to use its payments network to bridge into Web3 and digital-asset rails.
The Peg’s take: This comes even as Chinese regulators have directed Ant (along with other tech firms) to pause or halt their stablecoin initiatives over concerns about private-sector monies undermining central-bank control.
— Visa will support four new coins on four different chains (via multiple sources)
Summary: Visa said stablecoin-linked card spend is up fourfold year on year. The payments behemoth also said it will expand acceptance/settlement to four additional stablecoins across four blockchains, converting into 25+ fiat currencies. The move broadens on-ramps/off-ramps for merchants and issuers globally and extends Visa Direct pilots for topping up prepaid accounts with stablecoins.
— Mastercard said it was working with Zero Hash to accelerate stablecoin rails (via CoinDesk)
Summary: Mastercard said it was is in late-stage talks to acquire Zero Hash for $1.5–$2 billion to bolster stablecoin payment infrastructure and competition with Visa. The target provides compliance, wallets, and settlement plumbing banks/fintechs use to move stablecoins.
— Western Union said it is piloting stablecoin settlements for remittances (via CoinTelegraph)
Summary: WU will test on-chain settlement to cut reliance on correspondent banking, shrink settlement windows, and improve capital efficiency across 150 million plus customers and more than 200 countries. “We see significant opportunities for us to be able to move money faster with greater transparency and at lower cost without compromising compliance or customer trust,” it said.
The Peg’s take: The lower cost case isn’t what it seems, but we will return to this topic at a later stage.
— Revolut switched on 1:1, zero-spread stablecoin conversions for 65 million users (via Finance Magnates)
Key graf: “Revolut now allows users to swap U.S. dollars for stablecoins at a 1:1 rate, completely removing fees, spreads, and hidden costs. The move aims to make cryptocurrency transactions as seamless as traditional foreign exchange transactions.”
— Citi teamed up with Coinbase to build institutional stablecoin payments (via Bloomberg)
Summary: Citi and Coinbase will co-develop on/off-ramp and payments orchestration for corporate clients, paving the way for treasury and cross-border stablecoin uses.
Lugano catch-up:
— Bitfinex Securities CEO Jesse Knutson told The Peg that Kazakh regulators are now accepting regulatory fees in stablecoins.
Summary: Knutson, a former Macquarie equity capital markets guy, sat down with The Peg on the sidelines of Tether’s Plan B bash in Lugano at the end of October to tell us more about the group’s capital market ambitions. Bitfinex Securities is an offshoot of crypto exchange Bitfinex and was built to demonstrate how tokenization could modernize capital markets. The group is regulated out of Kazakhstan’s new International Financial Center for both strategic and philosophical reasons, Knutson said. The Kazakh IFC, which emulates that of Dubai, operates under English common law and was established by former U.K. regulators to offer a flexible yet credible environment for digital finance. Crucially, Kazakhstan’s policymakers “understand Bitcoin” and see blockchain-based finance as an opportunity rather than a threat. With no powerful domestic incumbents to defend, “it’s all upside, no downside,” Knutson said, allowing jurisdictions like Kazakhstan and El Salvador to attract innovation that legacy hubs, such as London, have resisted.
Under Knutson’s leadership, Bitfinex Securities has launched tokenized bond and alternative-asset products and is now preparing its first equity offerings, including tokenized MicroStrategy shares and ETF-style products. The goal, he said, is to build truly global 24/7 markets where investors can self-custody, trade peer-to-peer, and earn yields in stablecoins. He contrasted this with “innovation where nothing changes” from traditional institutions that keep tokens locked inside custodial systems.
Knutson drew a direct comparison between Bitfinex’s tokenization model and the traditional American Depositary Receipt (ADR) system, arguing that tokenized securities effectively do the same job — but “better.” As he explained, ADRs were designed to let investors in one market gain exposure to foreign equities through intermediaries, with banks issuing wrapped versions of underlying shares. Tokenization, he said, removes that friction entirely by allowing investors anywhere in the world to hold and trade digital representations of real assets directly, without relying on custodial banks or time-zone-bound exchanges. “Security tokenization will eat the whole ADR business,” he predicted, because it offers global reach, instant settlement, and direct ownership. In his view, what used to require complex depository structures can now be done peer-to-peer, underpinned by blockchain-based whitelisting and compliance controls — a shift he described as the natural evolution of global capital markets.
Reflecting Kazakhstan’s openness to experimentation, Knutson also revealed that the AIFC regulator, AFSA, had told Bitfinex it would soon be able to pay its regulatory fees in Tether (USDT). As he put it, the move captures the broader trend: digital assets are no longer a parallel system but “becoming part of the financial plumbing” itself.
Unpegged:
— XUSD stablecoin crashed 77 percent after $93 million by protocol fund manager (via Decrypt)
What happened? DeFi platform Stream Finance suffered a major collapse last week after an external fund manager lost about $93 million in user assets, causing its stablecoin xUSD to crash by 77 percent from $1 to roughly $0.23. The loss stemmed from a highly leveraged “recursive looping” strategy, where the manager repeatedly borrowed against collateral across protocols like Euler, Morpho, and Gearbox — creating exposure of over $285 million. Following the loss, Stream suspended withdrawals and deposits and hired law firm Perkins Coie to investigate. Critics say the project lacked transparency, hiding details about an “insurance fund” fed by user fees.
The Peg’s take: The event underscores that in DeFi, as ever, even when smart contracts work as designed, human management and leverage risks can still devastate investors and destabilize protocols.
Central banking
— Trumpian Fed pick Stephen Miran said stablecoins could influence future U.S. monetary policy, notably via their effect on R*.
Summary: Speaking at an event on Friday, Miran argued that large-scale stablecoin issuance could create a “global stablecoin glut,” similar to the early-2000s “global saving glut,” by increasing demand for U.S. securities and pushing down the neutral interest rate (r). A lower r would imply that policy rates must also remain lower, raising the risk of hitting the zero-lower bound and reducing monetary flexibility. He warned that greater global access to dollar-linked stablecoins could further dollarize foreign economies, weaken exchange-rate independence, and tighten global financial linkages. Domestically, while stablecoins might divert funds from bank deposits, Miran believes new regulations limit systemic risk. Overall, he urged policymakers to recognize that stablecoins are not merely a payments innovation but a potential structural force shaping global capital flows, interest rates, and the future transmission of U.S. monetary policy.
Key grafs: “In estimating the effect of the projected growth of stablecoin issuance on demand for Treasurys and other highly liquid dollar assets, it is helpful to make a comparison to what most researchers believe was a large factor during an era of declining interest rates that began around the turn of the millennium—what former Fed Chairman Ben Bernanke called the global saving glut.7 In measuring the global saving glut, Bernanke reported that the annual U.S. current account deficit widened by 4 percentage points of U.S. gross domestic product (GDP) from 1996 to 2004.”
“If a global stablecoin glut is driven by flows out of foreign currencies and into the U.S. dollar, it will, all else equal, make the dollar stronger. Depending on the strength of this effect relative to other forces affecting the Fed’s price-stability and maximum-employment mandates, that might be something that monetary policy reacts to.”
— PBOC slams stablecoins while doubling down on e-CNY and tightening crypto crackdown (via SCMP).
Summary: PBOC Governor Pan Gongsheng said stablecoins fall short on KYC/AML and can fuel speculation and threaten weaker countries’ monetary sovereignty; Beijing will expand e-CNY use and keep cracking down on onshore crypto activity.
Key graf: “The Chinese central bank will optimise the positioning of China’s digital yuan, allowing more commercial banks to participate in the pilot scheme that was launched in more than two dozen cities since 2019 and has already accumulated a transaction value of more than 14 trillion yuan.”
— The Bank of Korea decided that dollar stablecoins don’t threaten its monetary sovereignty (via Central Banking)
Summary: The BoK said it’s unlikely that the country will cede sovereignty to USD coins if it doesn’t issue local currency stablecoins, suggesting claims to the contrary represent “excessive marketing rhetoric.” Such risks mainly affect high-inflation economies, it said. Legislation on local stablecoins is still moving forward.
— Russia’s central bank said crypto and stablecoins can’t be used for domestic payments (via TASS)
Summary: Central bank boss Elvira Nabiullina reiterated that the Bank would maintain its ban on domestic crypto payments, while allowing experimental use in foreign trade. She added that Russia could issue stablecoins but that they shouldn’t be used in-country.
Markets:
— Cathie Wood cut her bullish bitcoin target by ~$300K due to the effect stablecoins are having in global payment markets (via The Block)
Summary: ARK Invest’s Cathie Wood said in a recent TV interview that stablecoins were scaling faster than expected, especially in emerging markets where they are acting as de facto digital dollars for payments and savings. This evolution has caused ARK Invest to revise its 2030 bullish price target for Bitcoin downward by roughly $300,000. Although the firm still views Bitcoin as a foundational asset class and technology, the shifting dynamics mean that stablecoins are now encroaching on some of Bitcoin’s “utility” territory (payments/medium of exchange) rather than purely speculative store-of-value or global reserve asset.
— Pantera Capital investor hailed stablecoins as core fintech rails, while tracking bidding war for USDH and Paradigm’s Tempo (via The Block)
Summary: Pantera Capital Junior Partner Mason Nystrom argued that stablecoins were transitioning from niche crypto assets into foundational fintech infrastructure. He pointed to the active bidding war for USDH (the token issued by DeFi platform Hyperliquid) as a signal of where capital is chasing payment-flow innovations, and highlighted Paradigm’s Tempo as representative of next-gen payments L1s that integrate stablecoins, tokenisation of real-world assets (RWAs), and rails for programmable money.
Statecraft:
— Stephan Miran on how stablecoins can help the world dollarize (same source as above)
Key grafs: “Stablecoins might establish an easier means for the financially repressed to enjoy these global public goods and evade draconian restrictions on their finances. For individuals and businesses in many nations, especially those in which dollars are used for large purchases like homes, this also leapfrogs the challenges of high and unstable inflation or volatile exchange rates.”
“The real opportunity in stablecoins is to satiate untapped foreign appetite for dollar assets from savers in jurisdictions where dollar access is limited; by contrast, users in the U.S. and AFEs like the euro zone already freely access Treasurys, dollars, and other instruments that offer yield or deposit insurance. I therefore expect most demand for stablecoins to come from locales unable to access dollar-denominated saving instruments, boosting demand for dollar assets.”
— U.S. pushes for wider global dollar adoption (via the FT)
Key graf: “Trump administration officials are discussing ways to encourage other countries to adopt the dollar as their primary currency to counter a China-led charge to erode the greenback’s global dominance. Staff from government departments — including the Treasury and the White House — met Steve Hanke, a professor at Johns Hopkins University and a leading expert on dollarisation, over the summer to discuss how the administration could promote the policy.”
The Peg’s take: We spoke with Hanke ourselves a few weeks ago to get his view on stablecoins. During the interview, he also gave us some thoughts on the U.S. Treasury’s Argentine intervention. On the latter, Hanke said he disapproved of the move, telling us: “It’s a totally stupid thing. It doesn’t solve any problem. The problem is the peso. You just have to get rid of the peso.”
With respect to dollarization, he added, “The thing they should have done first was dollarization. And I’ve always said this is going to be his [Bessent’s] Achilles heel, if he doesn’t dollarize, he’s toast.”
On stablecoins specifically, Hanke isn’t convinced they’re an effective substitute for currency boards. As the architect of many of the currency board systems that were applied to transition economies, he believes stablecoins would fall short due to their private nature.
“The difference is that currency boards are public institutions and stablecoins are private,” said. He added that “Currency boards have always had whatever the international currency is at the time as the anchor. And stablecoins have all kinds of garbage. But the main difference is that stablecoins are not legal tender. So, these tokens can be used in private transactions and so forth, but they can’t be used to pay taxes. So they’re not really quite cracked up with what they say they are. Let’s put it that way.”
— Argentina’s stablecoin usage surged around Milei’s midterm win (via Decrypt)
Summary: Transaction and search interest in dollar-stablecoins spiked ahead of elections — another datapoint that political/FX stress reliably pushes retail toward USD-pegged tokens.
— Kyrgyzstan launched a national stablecoin and CBDC with Binance (via Reuters)
Summary: Bishkek unveiled a rouble-backed national stablecoin on BNB Chain and said a digital som is ready for government payments, plus a national crypto reserve — including BNB — was set up.
— A French opposition party floated a proposal to create a national Bitcoin reserve and euro stablecoin payments (via Zerohedge)
Summary: France’s Union de la Droite et du Centre (UDR) — a small centre-right opposition bloc led by Éric Ciotti with 16 seats in the National Assembly — unveiled a draft “financial sovereignty” bill last week that would embed both Bitcoin and euro-pegged stablecoins in France’s monetary framework.
The proposal calls for France to accumulate up to 2 percent of the total Bitcoin supply (around 420,000 BTC) over several years through public mining using surplus nuclear and hydro energy, retention of seized crypto assets, and optional citizen savings schemes that funnel part of retail deposits into BTC. The bill frames this as a strategic reserve to bolster national independence from the U.S. dollar and the ECB influence.
At the same time, the UDR wants to legalize low-value payments in euro-denominated stablecoins — up to €200 tax-free — as a “private-sector” digital alternative to the European Central Bank’s planned digital euro, which the party opposes on privacy and sovereignty grounds. Although the proposal’s chances are slim given the UDR’s minority status, it marks the first comprehensive crypto-policy bill in French parliamentary history and illustrates a growing politicization of digital-currency debates in Europe.
— U.S. dollar-pegged stablecoins pose new policy and monetary-transmission challenges, said India’s chief economic adviser (via Reuters)
Summary: V. Anantha Nageswaran, Chief Economic Adviser to the Indian government, warned that the proliferation of dollar-backed stablecoins was creating fresh challenges for central banks. According to Nageswaran, as stablecoins increasingly behave like deposit substitutes and payment rails, they risk undermining interest-rate transmission, altering safe-asset demand (notably U.S. Treasuries), and eroding monetary sovereignty in countries exposed to them. He noted that outside the U.S., these coins can act like “quasi-banks” and shift funding flows away from the formal banking system. He argued that regulators may have to rethink structures for deposits, shadow funding, and the role of bank supervisors as stablecoins scale globally.
Regulation:
— Canada moved to regulate stablecoins in federal budget (via Decrypt)
Summary: Ottawa’s budget outlined a framework to supervise issuers and reserve assets, while integrating stablecoins into payments with guardrails rather than bans — aligning with the global shift from ‘if’ to ‘how’ on regulation.
— Circle tweaked the terms of its stablecoin USDC to explicitly allow purchases of “legal” firearms in the U.S. (via Decrypt)
Summary: USDC can be used for lawful gun purchases where permitted, underscoring ongoing boundary-setting by issuers as stablecoins seep into retail commerce.
— Japan greenlighted big-bank stablecoin pilots, saying it will support. issuance (via Decrypt)
Summary: Megabanks MUFG, SMFG, and Mizuho received the go-ahead for a coordinated stablecoin trial aiming at a March 2026 launch, and the finance minister said the government and FSA will support bank-issued stablecoins for cross-border payments.
Deep thoughts:
— ECB’s markets man Ulrich Bindseil thinks there are sound economic reasons why stablecoins should bear interest (SSRN)
Summary: Bindseil argues in a new paper that unlike unbacked crypto assets, stablecoins merely reallocate liquidity within the financial system, affecting banks’ balance sheets and international capital flows. That’s why, he says, the prohibition of remunerating stablecoin holdings is an “original sin” of current regimes. He proposes three alternative models that could both stabilize and integrate stablecoins safely:
- (a “laissez-faire” model with strict liquidity and capital rules
- a 100 percent central-bank-reserve model with tiered remuneration that discourages destabilizing inflows and outsized issuers
- a Pigouvian tax model that explicitly compensates banks for their positive externalities.
These options, he argues, would align incentives, reduce run and disintermediation risks, and avoid penalizing innovation.
Key graf: “Using non-remuneration as a sort of Pigouvian tax against stablecoins is crude and cyclical and can ultimately be counterproductive. Generally rejecting the remuneration of money could be considered as a sort of a regulatory “original sin” in the era of electronic money. As restated above, non-remuneration of electronic means of payment is more abnormal than economically meaningful. Non-remuneration of money was normal in the times of paper banknotes because of technical constraints. But in a world of electronic means of payments, in which there are no such technical constraints, and in which the substitutability between money and short-term remunerated non-monetary assets intensifies, it seems counterproductive to legally restrict the remuneration of an important asset class to zero.”
— Eric Salzman at Racket News dug into Trump’s pardon of Binance’s CZ.
Summary: The author speculates that Donald Trump’s pardon of Binance founder Changpeng “CZ” Zhao was likely a transactional act tied to the Trump family’s financial interests through their stablecoin, USD1. World Liberty Financial (WLF), the Trump family’s firm, had launched USD1, which gained major legitimacy when an Abu Dhabi–backed company used it to buy a $2 billion stake in Binance. This deal not only elevated USD1’s credibility but also brought large profits to WLF. Later reporting revealed that Binance itself helped build the USD1 blockchain infrastructure, providing the smart contracts that governed the coin. Just months after that partnership, Trump pardoned Zhao, who had served prison time for anti–money laundering violations. The author frames this sequence as evidence of a potential quid pro quo — Binance aids WLF’s stablecoin project, and Trump rewards Binance’s founder with a pardon. Official denials are portrayed as implausible, especially given the timing and financial entanglements.
Key graf: “As we reported last month, the Trump family’s World Liberty Financial (WLF) scored a huge coup when its stablecoin, USD1, was used by MGX — an Abu Dhabi state-backed company — to purchase a stake in Binance for $2 billion. The use of USD1 in a major transaction not only lent legitimacy to the coin but also brought $2 billion to WLF, enabling the company to earn interest. Incredibly, Trump told 60 Minutes, “I don’t know who he is” and, in regard to his family’s financial connection to Binance, “I know nothing about it.”
— Jamie Dimon of JPMorgan Chase & Co. declared blockchain and stablecoins “real”, signaling institutional integration despite past crypto scepticism (via Benzinga)
Key quote: “Crypto is real. Blockchain is real. Stablecoins are real.”
CBDCs:
— Lawmakers revolt over party’s delay on digital euro (via POLITICO)
Summary: Growing tensions are emerging within the European People’s Party (EPP) over its obstruction of the European Central Bank’s digital euro project. The initiative, designed to create an EU-backed payment system rivaling Visa and Mastercard, has long been stalled due to EPP resistance, which reflects the interests of banks fearing competition. The party’s lead negotiator, Fernando Navarrete, has been accused by colleagues of intentionally slowing progress, arguing the digital euro should only be pursued if private-sector solutions fail. His latest report, seen as overly cautious and aligned with banking lobbies, has angered many EPP lawmakers who say they were excluded from its drafting. At a recent meeting in Strasbourg, several influential members called for faster action, warning that Navarrete’s stance could delay the project by a decade — an unacceptable timeframe as U.S. payment dominance grows. Critics also point to his close ties with Markus Ferber, the EPP’s economic affairs chief and a fierce digital euro skeptic. With EU policymakers viewing payments as a matter of strategic autonomy, internal EPP dissent signals rising impatience over leadership’s reluctance to move forward.
The Peg’s take: As we’ve highlighted before, Navarette is often presented as a rabid pro-banking trojan horse, but in reality, he may have good reason for his concerns about ECB overreach. Navarette was previously the chief of staff to the governor of the Bank of Spain, Pablo Hernandez de Cos (the new BIS chief). But he was also director of finance and strategy at Spain’s Official Credit Institute (ICO) from 2012 onwards. This was just after the Spanish government utilized the institution to fend off a deflationary collapse following the Eurozone sovereign crisis. Some critics have argued that ICO was heavily overburdened by the move and didn’t have the staff or the infrastructure to act as a full substitute for private banks, highlighting the limits of public sector operations in this area.
Stats and data:
— Brookings said stablecoins are reshaping demand for U.S. T-bills
Summary: The authors argue that dollar-backed stablecoins are emerging as a significant driver of demand for short-term U.S. government debt, particularly Treasury bills. They document how rapid adoption of stablecoins — especially in cross-border payments, remittances, and inflation-prone jurisdictions — leads issuers to hold large portfolios of Treasuries as backing reserves.
The authors suggest that the rise of stablecoins may mean that U.S. Treasury financing becomes increasingly reliant on digital-asset-backed demand rather than just sovereign/institutional demand. This has implications for fiscal policy, debt sustainability and the structure of the Treasury markets.
