News
ARK Invest expects another $300 billion in liquidity to return after the government shutdown, a development that may alleviate the “liquidity squeeze” affecting crypto and AI valuations.
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Stablecoin News
One of the hindrances to mainstream cryptocurrency adoption is price volatility, as these assets are freely traded in the open market without central administrators tasked with maintaining price stability. The anticipation of potential losses and gains has hindered cryptocurrency’s use as a medium of exchange. Stablecoins, however, are cryptocurrencies designed to maintain a stable value over time, making them ideal for commercial transactions.
The introduction of stablecoins in the cryptocurrency market ushered in a new wave of liquidity, as exchanges were able to provide trading pairs with tokens representing traditional fiat currencies.
Stablecoin design takes many different forms, each with its own tradeoffs:
- Reserve-backed stablecoins: Cryptocurrencies pegged to the value of a fiat currency held in reserve by a company or consortium. E.g., Tether (USDT), USD Coin (USDC) and Paxos Standard (PAX).
- Collateralized stablecoins: Tokens backed by other cryptocurrencies that retain a one-to-one value with a fiat currency through over-collateralization to absorb potential volatility of the underlying assets. E.g., Dai and BitUSD.
- Algorithmic (seigniorage supply) stablecoins: Rather than using a reserve or collateralization to maintain a stable value, these stablecoins are facilitated through an automated expansion and contraction of the monetary supply, emulating the role of central banks in the fiat economy. E.g., Basis.
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Ripple’s dollar-backed stablecoin secures a major regulatory win as Abu Dhabi allows licensed firms to use RLUSD inside its international financial center.
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S&P Global Ratings downgraded Tether’s USDt to its lowest stability rating, raising concerns over its dollar peg. Tether classified the report as “misleading.”
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Fiat currency inflation, US dollar shortages and global competition are prompting the government to integrate cryptocurrencies.
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Tether accounted for almost 2% of global gold demand last quarter, with Jefferies noting that its aggressive buying may be influencing short-term market sentiment.
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The Trump family-backed WLFI purchased nearly $8 million worth of tokens, aiming to mitigate the downtrend of the token by artificially reducing the outstanding supply.
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The Bank for International Settlements is advancing major digital currency pilots, testing cross-border CBDCs, tokenized deposits and real-time payment rails.
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Deutsche Börse is integrating AllUnity’s EURAU stablecoin into its market infrastructure — its third euro-pegged stablecoin — signaling a full-spectrum push.
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The ability to freeze assets and unwind transactions was a key consideration when selecting the blockchain for the pilot, according to Mike Villano from US Bank.
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Neura’s Arsalan Evini discusses the market forces driving stablecoin adoption, the infrastructure flaws limiting their scale and how a sovereign, purpose-built stack could support reliable global use.
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The bank cited increasing trading volume and the number of users at large exchanges, as well as gaps in South Africa’s regulatory framework on crypto.
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The EU-licensed digital bank became the first financial institution to issue a token on Stripe and Paradigm’s layer-1 blockchain Tempo.
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Regulators and the Bank of Korea remain at odds over bank dominance in issuing won-backed stablecoins, stalling a long-awaited framework expected this year.
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The investment broadens Ondo Finance’s onchain Treasury reserves and comes amid a renewed push into crypto-backed lending across fintechs, lenders and exchanges.
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The European Central Bank said stablecoin risks in the euro area are limited, with crypto trading dominating use and retail adoption under 1%, while monitoring continues.
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