Digital-Currency News Digest September 25th, 2026
U.S. stablecoin regulation and dollar diplomacy
The Federal Reserve has sought public comment on two GENIUS Act rulemakings for board-supervised payment stablecoin issuers. One proposal would require full backing, standardized capital, and risk-management standards, with rules for safekeeping reserve assets and clarification that banks may participate in stablecoin activities. The second would create a tailored application process for board-supervised banks wanting to issue payment stablecoins, including appeals, hearings, and final determinations. The package would align issuer liquidity and capital treatment with payment-stability objectives while giving supervised banks a clearer route into regulated issuance.
Reported U.S. discussions involve a government-private initiative to promote dollar-backed stablecoins abroad, potentially using the Treasury Department, State Department, and the U.S. International Development Finance Corp. The effort would try to reinforce the dollar’s reserve role by expanding foreign demand for stablecoins backed by U.S. Treasury bills, a reserve base already close to $200 billion. It would also create incremental Treasury buyers while countering digital-currency projects in China, the eurozone, and BRICS. No companies, countries, funding, or timeline have been announced, and banks, the EU’s digital euro agenda, and China’s yield-bearing digital yuan could constrain execution.
FDIC insurance remains relevant even if GENIUS-stablecoin reserves are fully backed because it protects depositors from fraud, operational failures, and issuer bankruptcy while offering a predictable payout process that stablecoin holders may not receive. Stablecoins are therefore more likely to supplement bank deposits than replace them, especially where consumers and businesses value the insurance wrapper. Tokenized deposits could combine stablecoin-like payment efficiency with insured-deposit protection, but meaningful adoption would require interoperable standards, clear legal treatment, and coordinated industry action. This analysis suggests that payment efficiency alone will not determine which instruments dominate household and corporate money.
The GENIUS Act’s prohibition on interest or yield for token holders creates a monetization gap for issuers that hold income-earning U.S. Treasury reserves. Circle’s 2025 revenue was $2.75 billion, with 96 percent coming from reserve income, but distribution and transaction costs, including large payments to partners such as Coinbase, limited profitability. Tether’s larger retained reserve-income margin, without a comparable distribution partner, shows that issuer economics depend on how much yield survives distribution rather than on paying holders. Stablecoin profitability will therefore hinge on reserve composition, fee structures, partner economics, and the ability to monetize settlement, issuance, or liquidity services without offering interest.
Tokenized deposits and bank settlement infrastructure
Seven UK banks completed the first live customer transactions using tokenized sterling deposits through the Great British Tokenised Deposit initiative, with Quant providing the shared platform for tokenized commercial bank money. The pilot included two remortgage completions and a consumer marketplace purchase, where funds were locked and automatically released under specified conditions. The design reduced manual checks, settlement delays, and transaction risk by moving settlement logic onto a shared tokenized-deposit environment. UK Finance said participants will run additional pilots linking tokenized customer money with digital-asset settlement, aiming to show practical benefits for the country’s payments infrastructure and for institutions seeking faster, programmable retail and commercial workflows.
The Clearing House selected Quant to build the interoperability, orchestration, and transaction-management layer for its On-Chain Money Initiative, a bank-led network for clearing and settling tokenized deposits. The network is expected to support immediate settlement, condition-triggered payments, and connections to existing fiat payment systems, with availability for participating institutions in the first half of 2027. The effort extends incumbent clearing infrastructure to wholesale tokenized fiat issued by banks and moving in real time across institutions and geographies. Scaling will depend on interoperable bank tokens, useful payment use cases, programmable conditional payments, 24/7 liquidity management, and faster integration with back-office accounting systems.
IBM announced beta connectivity to Swift’s permissioned blockchain ledger for tokenized deposits, including an ISO 20022 messaging adapter that lets banks use existing payment formats and instructions. IBM is also opening an on-premises beta deployment of Digital Asset Haven for IBM Z and LinuxONE systems, allowing institutions to keep digital-asset operations and key management in their own data centers with hardware security modules. Swift’s shared ledger supports bank-issued tokenized deposits with final settlement through existing systems. The beta builds on Swift’s July ledger pilot, which began with 17 banks and included an August cross-border transaction by HSBC and Standard Chartered.
Six major Canadian banks are jointly developing a secure Canadian dollar tokenized deposit solution intended to support faster, more efficient, and programmable payments while maintaining safety, stability, and regulatory oversight. In Canada, stablecoins and tokenized deposits share distributed-ledger technology but differ in structure, issuers, legal protections, and use cases. Stablecoins are non-bank, fiat-backed, interest-free digital assets suited to cross-border payments, financial inclusion, and open access, while tokenized deposits are bank-issued digital representations that can earn yield and may qualify for deposit insurance. Canada’s stablecoin framework is expected to take effect in 2027, and OSFI has indicated support for tokenized deposits. This positions the two as complementary parts of the payments ecosystem.
Stablecoins, tokenized deposits, and CBDCs are projected to reach about 4 percent of global payments volume by 2030, threatening roughly $230 billion in bank payments revenue and high-margin income from foreign exchange, correspondent banking, float, and transaction processing. Banks are prioritizing tokenized deposits because they can keep funds on balance sheets within existing regulation, while nearly 60 percent of corporate clients say they would source stablecoin services from non-bank providers if banks do not keep pace. Adoption of these instruments could unlock up to $4 trillion in trapped settlement and liquidity funds. Banks that scale tokenized deposits and stablecoin-enabled workflows earlier are better positioned to create new revenue and offset falling transaction fees.
Asia-Pacific adoption and settlement experiments
Asian markets account for nearly half of the top 20 in Chainalysis’ 2026 crypto adoption index, with stablecoin settlement and cross-border transfers growing across the region. The index underscores how regulatory experimentation, exchange activity, and institutional integration are shifting adoption away from purely speculative use toward payment and settlement applications. Divergent national approaches to stablecoin licensing, reserve rules, compliance, and infrastructure may increase fragmentation in the near term, even as regional demand expands. Leaders from Standard Chartered, HSBC, Visa, Boston Consulting, and KPMG emphasize that stablecoins will scale only if they interoperate with existing bank-to-bank rails, instant payment schemes, and tokenized deposits.
Saudi Arabia has exited the China-backed mBridge CBDC project, a shift that highlights the geopolitical sensitivity of cross-border CBDC infrastructure and messaging standards. The withdrawal reduces the visibility of a China-led retail settlement rail in a major Gulf market and opens space for alternative settlement arrangements tied to dollar, euro, or domestic payment priorities. The move also reflects broader concerns that multilateral CBDC projects can become platforms for data control, sanctions compliance, and network influence. For the region, the decision adds to the need for interoperable settlement bridges that can support multiple currencies and institutions without locking participants into a single technology or governance stack.
The Hong Kong Monetary Authority said CMU OmniClear, a joint venture with HKEX, is developing a digital asset platform aimed at supporting CBDC settlement by year-end. The infrastructure will also explore interoperability with tokenized deposits and compliant stablecoins to modernize regional settlement systems. The move aligns with earlier HKMA planning for blockchain settlement covering CBDCs, tokenized deposits, and stablecoins, and positions Hong Kong as a hub for institutional tokenized money that can bridge retail and wholesale rails. It also signals an effort to keep local settlement systems competitive as APAC institutions test faster, 24/7 payment and digital-asset workflows.
The HK Securities and Futures Commission announced that RMB trading for Hong Kong-listed stocks via Stock Connect will be implemented before July 1 next year. The change would reduce currency conversion costs for mainland investors trading in Hong Kong-listed shares and broaden the use of renminbi in regional securities markets. It also complements local settlement modernization by making capital flows, clearing, and payment systems more efficient across the Greater Bay Area. While not a digital-currency project, the measure supports the broader goal of deeper financial integration and may create additional demand for RMB settlement, cash management, and eventually CBDC or stablecoin-enabled workflows.
The Bank of Korea launched a 24-hour won settlement pilot, extending the operating hours of domestic payment settlement and testing continuous availability for institutions and customers. The pilot reflects APAC pressure to reduce batch-processing delays, lower intraday liquidity needs, and support cross-border and domestic flows that no longer conform to traditional banking hours. It also creates a reference environment for evaluating how tokenized deposits, CBDC settlement, and stablecoin interoperability can work alongside existing clearing arrangements. The development matters for regional stablecoin growth because always-on settlement can make low-value and automated payments more useful for businesses and machine-to-machine transactions.
Binance invested $100 million in Circle under an expanded USDC agreement, deepening the exchange’s access to the euro- and dollar-denominated stablecoin ecosystem. The investment pairs Circle’s compliance and reserve infrastructure with Binance’s distribution, trading, and payment networks, potentially supporting card, wallet, trading, and cross-border settlement use cases. The deal comes as stablecoins expand beyond crypto trading into institutional payment rails and as U.S. policy discussions link dollar stablecoins to Treasury demand. For Circle, the partnership strengthens distribution without diluting the bank and regulator relationships that underpin its reserve and compliance model.
Bitget suspended withdrawals after confirming a $351.6 million security breach, one of the largest exchange incidents in the digital-asset sector. The event renewed attention on cold-wallet design, third-party access, employee controls, insurance, and the ability of exchanges to reassure customers during disruption. Stablecoin and tokenized-deposit growth makes such incidents especially sensitive because institutional and retail users are increasingly expected to hold or move regulated digital money on shared rails. The breach also highlights a risk gap between blockchain settlement speed and operational resilience: faster rails are less valuable if custody, monitoring, and incident response cannot withstand sophisticated attacks.
Stablecoins are expanding across Asia-Pacific as banks and payment firms pursue faster cross-border settlement, lower cash holdings, and 24/7 availability, but divergent licensing, reserve, compliance, and infrastructure rules may increase fragmentation. Leaders stress that stablecoins will scale only by interconnecting with existing bank-to-bank rails, instant payment schemes, and tokenized deposits rather than creating separate networks. Regional efforts including Project Nexus, tokenized-deposit pilots, and HSBC’s first inter-bank tokenized deposit transaction on Swift are early attempts to build shared standards before separate digital payment ecosystems emerge. The practical test is whether institutions can move balances across borders with comparable finality, liquidity treatment, and audit trails.
Uzbekistan’s central bank is exploring a wholesale CBDC that could act as a trusted settlement layer for private stablecoins. Licensed institutions would handle customer relationships, while initial testing could occur in a regulatory sandbox. A CBU, GFTN, and OMFIF white paper weighs the advantages, disadvantages, and a 24-month evaluation path for the design. The approach separates retail banking from central-bank settlement, potentially reducing reserve and liquidity complexity for stablecoin issuers while preserving control over interbank money. It also gives Uzbekistan a possible model for integrating private digital currency activity into supervised wholesale infrastructure without launching a retail CBDC first.
Stablecoin issuers, payments, and market infrastructure
SoFi has begun settling debit and credit card transactions with Mastercard using its SoFiUSD stablecoin and expects to migrate its entire card program, with more than $25 billion in annualized volume, to the system. The move keeps Visa, Mastercard, banks, and card networks in place while replacing part of traditional banking settlement rails with an on-chain option that can settle continuously. Experts say the shift could improve settlement speed and capital efficiency, but benefits depend on conversion, compliance, local-currency liquidity, and overall cost savings, especially for cross-border payments. SoFi’s program illustrates how stablecoins may become embedded settlement layers rather than standalone crypto products.
Stablecoin use is expanding beyond speculative trading, with cross-border flows estimated at $220.3 billion and stablecoins accounting for 96 percent of domestic peer-to-peer digital asset transfers. Broader adoption depends on improving education and trust, as consumers are most willing to use stablecoins when transfers are offered through trusted financial providers with strong fraud protections. Stablecoins may also gain momentum from agentic and machine-to-machine payments, since they can support fast, automated, low-value, always-on transactions that traditional fiat rails are less suited to handle. The issue is less whether digital dollars can scale than who controls distribution, settlement, and the trust signals that make usage durable.
Qivalis, a euro-pegged stablecoin issuer, says global trade finance is undergoing a stablecoin-driven transformation as 37 European banks have joined its effort over the past year. The company has grown to about 40 employees and is close to obtaining a Dutch electronic money institution license, targeting launch of a regulated euro stablecoin by the end of the year. Qivalis argues stablecoins add the missing on-chain payment and liquidity layer to earlier trade-finance blockchain efforts, enabling faster collateral movement and cross-border flows. It expects a future multi-stablecoin world rather than dominant U.S.-dollar settlement, noting Europe’s MiCA provides regulatory clarity while U.S. bank-led initiatives face delays.
The Solana Foundation appointed former Binance chief marketing officer Rachel Conlan as chief strategy officer and former Polygon Labs executive Jamal Raees as general manager of payments, with Raees focused on expanding stablecoin and tokenized deposit adoption. The appointments followed new partnerships with Modern Treasury, Amazon Web Services, Mastercard, and Western Union aimed at strengthening Solana’s payments infrastructure. The network reported processing more than $5 trillion in stablecoin volume in 2026, along with over $4.5 billion in real-world assets and $620 million in tokenized equity. These hires signal a shift from developer-focused growth to commercial distribution, corporate payments, and institutional tokenization.
HIFI raised $37 million in a Series A round led by Left Lane Capital to scale payments products and tokenized capital markets infrastructure. The stablecoin infrastructure company processes about $7 billion in annualized platform volume and offers services for converting dollars and stablecoins, sending card payouts, and settling tokenized Treasury and repo transactions in U.S. dollars. The funding supports expansion amid rising cross-border stablecoin flows and new blockchain settlement activity by financial institutions such as Visa and DTCC. HIFI’s focus reflects a market shift from crypto-native settlement toward enterprise-grade payment, treasury, and capital-markets workflows that require compliance, liquidity, and institutional integration.
Luno, Halogen Capital, and Kenanga Investors announced a collaboration to explore UMYR, a fully reserved stablecoin pegged one-for-one to the Malaysian Ringgit as an on-chain settlement instrument for tokenized money market funds. The proposed closed-loop, institutional-only arrangement would use segregated onshore Ringgit reserves, daily reconciliations, and independent attestations to support real-time delivery-versus-payment settlement for fund subscriptions and redemptions. The announcement records commercial intent to collaborate, not a commitment to launch UMYR, and participation remains subject to regulatory engagement and definitive agreements. It is an early test of how sovereign-pegged stablecoins can serve institutional fund operations without creating open retail money.
Central banks, jurisdictional tokenization, and regulatory constraints
The European Central Bank will invest a small portion of its own funds in euro-denominated tokenized securities and has launched Pontes to settle distributed-ledger transactions in central bank money. The move is significant because it places a central bank directly on a distributed-ledger asset and settlement layer, creating a reference for how public-sector liquidity and private tokenized securities can interact. Pontes aims to provide final settlement for DLT transactions, while the investment tests operational and market mechanics for tokenized bonds or fund shares. The program also positions Europe to support tokenized markets without relying exclusively on U.S. stablecoins or foreign settlement infrastructure.
The ECB and EU national central banks proposed replacing bank-deposit reserve rules with short-term liquidity requirements, a design change tied to the rise of stablecoins and bank-led tokenization. The proposal would move reserve management from static deposit-linked requirements toward liquidity that must be maintained over shorter horizons, reflecting faster settlement, continuous availability, and higher velocity of digital money. It comes as stablecoins become embedded settlement rails rather than standalone crypto products. The issue is no longer only whether digital dollars or euro equivalents can scale, but who controls distribution, settlement, and the prudential treatment of balances that move across bank and non-bank payment systems.
South Korea is testing CBDC-linked, blockchain-based deposit tokens for government payments, letting officials use QR-code payments with participating major banks. The pilot ties public-sector settlement to bank deposit tokens on a blockchain, potentially enabling faster disbursement, transparent reconciliation, and programmable policy payments. It also explores how central-bank digital currency can interact with commercial bank liabilities without creating a separate retail CBDC ecosystem. For the region, the project is a practical test of tokenized deposits as a bridge between government fiscal operations, bank balance sheets, and the emerging stablecoin settlement economy.
The Bank of Russia proposed capping banks’ exposure to cryptocurrencies and foreign digital instruments at 1 percent of capital and applying a 1,250 percent risk coefficient to relevant digital-asset risks. The proposal would sharply limit balance-sheet exposure to non-convertible or foreign digital assets, reflecting concerns about capital erosion, sanctions evasion, volatility, and operational complexity. It contrasts with APAC and Western experiments that seek to integrate tokenized deposits, stablecoins, and CBDC settlement into mainstream payment infrastructure. For Russian banks, the rule signals that digital-currency activity will remain a niche or controlled activity unless domestic settlement rails, licensing, and supervisory frameworks provide a safer domestic alternative.
The National Bank of the Kyrgyz Republic and CertiK signed a memorandum of understanding on Sept. 9, 2026, to cooperate on security and oversight for the Digital Som central bank digital currency and broader digital assets. The framework addresses cybersecurity, formal verification, operational resilience, AML/CFT, transaction monitoring, custody, licensing, and risk management. The agreement also allows the parties to explore CertiK’s supervision and compliance tools for regulatory oversight, without announcing a contracted deployment. The MoU is notable for pairing a central bank’s CBDC project with third-party security assurance, a growing requirement as public digital currencies seek public trust and institutional adoption.
Overall Outlook
Institutional digital money is moving from pilot demonstrations to production constraints: reserve and capital rules, interoperability, security, and bank economics will determine which rails become dominant. Tokenized deposits offer banks a way to preserve balance-sheet benefits, while stablecoins pressure settlement speed and cross-border reach. The next phase will favor systems that connect public, bank, and private money without fragmenting the payment stack.