Cobo Stable Weekly No.14 |When Licenses Become Moats: Can SMEs Still Join the Stablecoin Game?
As stablecoin infrastructure consolidates under licensed giants, the question for SMEs is no longer whether to adopt — but how.
Global payments are undergoing a revolution, and stablecoins are at the heart of this transformation. They're not just reshaping how money moves across borders—they're completely redefining what payments can be. Cobo stands at the cutting edge of this shift, building the full-stack infrastructure that powers next-gen stablecoin solutions: from secure wallet tech to risk control and compliance and yield-generating options that actually make your money work.
Go with Cobo, and you can zero in on building cool stuff and growing your user base, while surfing the stablecoin revolution without the infrastructure headaches.
The Genius Act isn't just crypto regulation - it's looking more like stealth quantitative easing. The US might be setting up compliant stablecoin issuers to pump Treasury-backed reserves into the system without officially expanding the Fed's balance sheet. Smart move when you need liquidity but can't admit you're doing QE again.
Circle's banking license application shows how this plays out in practice. Get the federal trust charter, control the full stack from issuance to custody, and become part of the government's indirect financing machine. Traditional finance is waking up to this "internet money layer" opportunity, and the race is getting crowded fast.
The licensing wars will create a few massive winners, but the real action is shifting to the service layer. While Circle and friends fight over who gets to issue tokens, there's still plenty of room to build the infrastructure that makes stablecoins actually useful.
Bottom line: stablecoins are evolving from a crypto experiment into critical financial infrastructure. The question isn't whether this transformation happens, but who builds the pipes that make it all work.
Market Overview and Growth Highlights
Stablecoin Total Market Cap Reaches $255.201b
The total stablecoin market capitalization has reached $255.201 billion, reflecting a week-over-week growth of $2.415b. In terms of market share, USDT continues to dominate with a 62.42% share, followed by USDC, which holds the second position with a market cap of $61.922 billion (24.26% share).
Blockchain Network Distribution
Top 3 Networks by Stablecoin Market Cap:
Ethereum: $126.718B
Tron: $80.855B
Solana: $10.746B
Top 3 Fastest-Growing Networks (Weekly):
Story:+34.57%(USDC dominance: 99.99%)
Unichain:+34.01%(USDC dominance: 39.80%)
OP Mainnet:+17.27%(USDC dominance:39.80%)
Data Source: DefiLlama
🎯 Circle's Trust Bank Charter Application: Strategic Shift in Stablecoin Evolution
Circle (CRCL), the world's second-largest stablecoin issuer, has applied for a federal trust bank charter with the OCC, following its impressive $18 billion IPO valuation. This move signals Circle's transformation from a crypto asset issuer to a regulated financial infrastructure provider, potentially reshaping the entire stablecoin industry's regulatory and business landscape.
If approved, the charter would grant Circle direct custody and management rights over USDC reserves. This transforms their operational structure from third-party bank dependency to a "compliant financial entity" with complete control over underlying capital flows—significantly enhancing revenue resilience and systemic independence.
This transition aligns perfectly with emerging U.S. stablecoin legislation. Bills like the GENIUS Act propose bank-level regulatory requirements for major issuers. Circle's move represents both a proactive response to policy signals and a strategic pivot away from reliance on high-interest rate environments, gradually shifting from interest spread-driven economics toward service-based revenue from custody and settlement functions.
As the "first stablecoin stock," Circle aims to build competitive barriers through regulatory advantages. Market disagreement about this strategic pathway will likely become a central variable in future valuation fluctuations.
Future stablecoin market competition will center around custody capabilities, settlement interfaces, compliance credentials, and service depth. Banking charters may become the essential threshold for core participants in the next market cycle. This institutional evolution marks a significant milestone in stablecoin's journey from crypto innovation to regulated financial infrastructure.
🎯 Stablecoins: Invisible QE and Global Dollar Repatriation
Despite surface-level emphasis on compliance and financial stability, the deeper motivation behind America's new stablecoin legislation may resemble a form of "invisible quantitative easing" - creating new government financing pathways through bank-issued zero-interest stablecoins backing Treasury purchases, all without direct Fed balance sheet expansion.
Global markets are watching U.S. stablecoin regulation closely. BitMEX co-founder Arthur Hayes presents a disruptive perspective: the Genius Act and similar legislation aren't merely promoting market competition but rather using regulatory architecture to grant Too-Big-To-Fail banks dominance in stablecoins, establishing hidden financing channels for the federal government.
Facing annual deficits approaching $2 trillion and massive maturing debt, traditional QE mechanisms seem politically untenable. The elegant solution? Allow banks to issue zero-interest stablecoins while providing regulatory exemptions (like SLR relief) for Treasury purchases. This enables banks to leverage ultra-low-cost funds into government debt at scale, improving net interest margins while functioning as liquidity providers and Treasury buyers. This "atypical QE" indirectly releases potential liquidity without significant balance sheet expansion - supporting debt demand while potentially spilling into risk assets and ultimately increasing capital gains tax revenue. Hayes views this as financializing blockchain benefits into banking rental income at the expense of depositors, future taxpayers, and stablecoin innovators.
Citi's analysis provides nuanced insights, suggesting dollar stablecoins reflect rather than reinforce dollar reserve status. Their growth doesn't automatically generate net new Treasury demand - the funding source matters critically. If stablecoins merely redirect existing bank deposits or money market funds, there's no substantial increase in Treasury demand from a systemic perspective - just internal transfers between financial products. Only when stablecoins attract "incremental funds" not directly invested in Treasuries - from dollar cash reallocation, global M0 reconfiguration, or foreign deposit redeployment - can they meaningfully enhance Treasury demand.
This highlights Tether's unique strategic position. Beyond investing reserves in U.S. Treasuries, Tether's extensive Global South infrastructure investments (mining, AI, soccer clubs, agriculture) aim to generate offshore dollar profits. When these overseas earnings flow back to purchase Treasuries, they qualify as "incremental demand" through foreign deposit reallocation - positioning Tether as an indirect but persistent incremental Treasury buyer through its global profit network.
The stablecoin landscape emerges as multidimensional: Hayes reveals the fiscal deficit imperatives driving legislation and banks' "invisible QE" role; Citi distinguishes between "diverted" and "incremental" funds; while Tether demonstrates how offshore dollar circulation can generate truly incremental Treasury demand.
🎯 Stablecoin Landscape Restructuring: Web2's Entry Points
The stablecoin ecosystem is quietly embedding itself in mainstream finance. What's emerging isn't just a new technology but a new landscape dominated by licenses, settlement networks, and user scale.
While Circle and Ripple chase banking licenses to control the full stack from issuance to settlement, traditional banks and tech giants are leveraging their existing infrastructure to claim territory in this emerging "internet money layer." The industry is simultaneously becoming more regulated and more concentrated.
This raises an interesting question: in a world where financial attributes and licensing requirements keep intensifying, where do smaller players fit?
Alex Zuo from Cobo offers a counterintuitive insight: stablecoins aren't valuable because they're pegged to dollars; they're valuable as efficient interfaces for on-chain capital flows. Big institutions may control issuance, but as stablecoins penetrate commercial scenarios, they're creating entirely new demands around circulation, settlement, and integration.
This is precisely where Web2 companies have an unexpected advantage. Unlike crypto-native firms, they already understand real business scenarios and possess the CRM capabilities, distribution channels, and user networks that matter. Areas like cross-border e-commerce, gaming, and content creation are natural fits for stablecoins' low-cost, high-efficiency capital flows.
The challenge is that Web3's underlying architecture remains formidably complex. Account systems, smart contracts, cross-chain compatibility, and compliance requirements form a tangled web that most Web2 teams can't navigate alone.
That's the opportunity Cobo is pursuing. By becoming the "underlying capability provider," they're using API-based, modular approaches to deliver essential functions like on-chain wallets and fiat settlement. This lets Web2 businesses embed themselves in Web3 financial systems without building everything from scratch.
It's a classic pattern in technology: as infrastructure matures, the most interesting opportunities often emerge not at the protocol layer but in connecting existing systems to new capabilities. From cross-border payments to on-chain account management, the most valuable position might be as the bridge between two worlds.
Market Adoption
🌱 Coinbase is aggressively pushing USDC adoption beyond trading through Coinbase Payments (partnering with Stripe and Shopify) and Coinbase Business for startups, turning stablecoins into a core revenue stream. Their Base blockchain now holds over $3.7 billion in USDC and has processed $6.8 trillion in settlements, while a new revenue-sharing deal with Circle gives them 100% interest income on directly held USDC. This strategic shift has exploded non-trading revenue from $181 million in 2020 to $2.8 billion in 2024. Coinbase is clearly building a long-term growth engine by expanding USDC's utility in payments and DeFi beyond just trading.
🌱China Asset Management Hong Kong is diving into stablecoin applications with an integrated "payment + subscription/redemption + asset management" solution, signaling stablecoins have moved beyond proof-of-concept into practical use. CEO Gan Tian notes multiple institutions are exploring stablecoin use cases simultaneously, indicating the business is at a critical inflection point where "basic rules are set, and application scenarios are poised to explode." He predicts the future global monetary system might converge on a few mainstream stablecoins. This move shows how traditional Chinese-backed asset managers are strategically transforming under Hong Kong's virtual asset regulatory framework.
🌱 Switzerland's AMINA Bank just became the first international bank globally to support Ripple's RLUSD stablecoin, offering custody and trading services to institutional and professional clients. RLUSD has a $430 million supply backed by US Treasuries and regulated by New York's Department of Financial Services. This signals traditional banks are increasingly embracing compliant stablecoin products, providing institutional investors with a regulated gateway to emerging financial instruments. The move further bridges crypto assets and traditional finance as global stablecoin regulatory frameworks continue maturing.
New Launches
👀 Tech billionaires Palmer Luckey, Peter Thiel, and Joe Lonsdale are applying to launch Erebor, a new bank targeting tech startups and crypto businesses to fill the Silicon Valley Bank void. The bank plans to focus on stablecoin transactions as core business, aiming to be the "most stringently regulated entity in stablecoin dealing" while serving virtual currency, AI, defense, and manufacturing firms. Co-led by former Circle advisor Jacob Hirshman, this venture shows tech capital's serious commitment to building crypto financial infrastructure. This regulated, tech-focused model could set a new precedent for integrating traditional finance with digital economy.
👀 Binance Pay just dropped slick new features making crypto transfers dead simple. Users can now send over 300 cryptocurrencies directly to phone contacts without wallet addresses, emails, or Binance IDs, and it's completely gas-free. They've also launched QR code scanning and photo-based wallet address transfers, ditching manual input and complex network choices. These updates drastically cut errors and make small transactions economical, directly tackling crypto's usability pain points while bringing the experience closer to traditional payment apps.
👀 BlueYard's crypto research lead Tim Robinson launched FreePay, an open-source NFC tap-to-pay crypto processor built in just one week that bypasses traditional credit card fees. The system includes an NFC reader and merchant screen, supporting MetaMask and Coinbase wallets with both merchant and Android client apps. Unlike Visa/Mastercard's 1-2.5% fees, FreePay uses low-fee blockchains like Ethereum L2s and Solana to slash costs significantly. This represents a return to crypto's decentralized roots, offering merchants and consumers a lower-cost alternative to traditional payment systems, especially valuable for industries often excluded by traditional banks.
👀 Tether CEO Paolo Ardoino announced PearPass, an open-source P2P password manager in internal testing that will soon launch on pears.com. Built on Holepunch's Pear platform, PearPass syncs across mobile, desktop, and browser extensions without central servers, allowing password imports from other managers. The decentralized infrastructure eliminates traditional development costs and aligns with Web3 principles of user autonomy and open-source security. This marks Tether's expansion beyond finance into everyday utility tools, pushing adoption of infrastructure-less P2P applications for more secure, private data management.
Big Picture
🔮 Ripple's RLUSD stablecoin exploded 604% in six months, jumping from $50M to $348M market cap and climbing from 36th to 17th in stablecoin rankings. Despite being multi-chain, over 83% of RLUSD lives on Ethereum rather than Ripple's native XRP Ledger, showing users prioritize liquidity over technical advantages. Ethereum's mature DeFi ecosystem and deep liquidity pools beat XRP Ledger's superior throughput and lower costs. This shift suggests stablecoin success depends more on multi-chain deployment and cross-chain liquidity coordination than single-chain performance.
🔮Stripe reportedly spent billions acquiring crypto infrastructure firms Privy and Bridge, signaling major convergence between crypto and traditional finance. HashKey Capital's CEO warns that current crypto infrastructure is fragmented, and Stripe might face integration headaches, compliance gaps, and service discontinuities. The real winners will build integrated ecosystems from scratch, offering compliant trading, tokenization, cloud infrastructure, AI risk control, and seamless custody. This marks a turning point where compliant, integrated platforms will dominate the future of financial services.
Regulation & Compliance
🏛️ Ripple is going all-in on regulatory compliance by applying for a national bank charter from the OCC, which would make their RLUSD stablecoin the first to operate under both state and federal oversight. Their subsidiary is also seeking a Fed master account to hold reserves directly with the central bank and operate outside traditional banking hours, giving them serious operational advantages. These moves anticipate the incoming GENIUS Act that's expected to require bank licenses for stablecoin issuers, positioning Ripple ahead of regulatory changes. By embracing this dual-regulatory approach and seeking direct Fed relationships, Ripple is betting big on institutional adoption and deeper crypto-traditional finance integration.
🏛️ The European Central Bank is launching its blockchain-based euro settlement system "Pontes" by Q3 2026, connecting blockchain platforms directly to the Eurosystem's core payment infrastructure after successful trials with €1.6 billion in transactions. The pilot builds on 50+ DLT experiments in 2024 that showed massive market demand for tokenized asset settlement using central bank money. The ECB's longer-term "Appia" solution aims to create a comprehensive European ecosystem for secure global operations, potentially enabling atomic and programmable settlement. This represents a huge step toward modernizing Europe's financial infrastructure and could fundamentally transform how global payments and securities settlements work.
🏛️ AllUnity just dropped EURAU, Germany's first regulated euro stablecoin, backed by Deutsche Bank's DWS, Flow Traders, and Galaxy after scoring an e-money license from BaFin. The stablecoin is fully MiCA-compliant with 100% collateralization, targeting 24/7 cross-border settlements for institutions across Europe. EURAU joins Circle's EURC and Societe Generale's EURCV in the regulated euro stablecoin race, showing traditional finance giants are diving headfirst into compliant digital currencies. This signals Europe's serious push to modernize payment infrastructure and boost the euro's position in global digital transactions.
🏛️ French Bitcoin savings app Bitstack just scored the first full MiCA license for a French company, giving them the green light to operate across all EU member states under Europe's new unified crypto regulations. The app, which already has 200,000+ French users, offers features like automatic round-up Bitcoin investments from daily purchases and recurring buys starting at just €1. This isn't some transitional fast-track license either - they went through the complete application process, positioning them perfectly for European expansion. Bitstack's achievement marks a major milestone as the EU's MiCA framework officially kicks into gear for cross-border crypto operations.
🏛️ Hong Kong's stablecoin regulation officially launches August 1st, requiring licensing for fiat-backed stablecoin issuers and setting capital reserve requirements to ensure users can always redeem their tokens. Financial Secretary Christopher Hui positioned stablecoins as efficiency tools rather than speculation vehicles, emphasizing they're about speeding up financial activities while the government fully understands the sovereignty risks. The new licensing regime marks Hong Kong's bid to become a major player in the digital asset space through balanced regulation that promotes innovation while maintaining system security. This move puts Hong Kong ahead of many jurisdictions still figuring out their stablecoin regulatory frameworks.
🏛️ Bank of England Governor Andrew Bailey is sounding the alarm about stablecoins potentially undermining public trust in traditional currency, particularly warning about "digital dollarization" from U.S. dollar stablecoins as he takes over as chair of the Financial Stability Board. This comes right after the U.S. passed major stablecoin legislation that Treasury Secretary Scott Bessent claims will actually strengthen the dollar's dominance globally. Central banks worldwide are clearly getting nervous about how these digital assets might mess with monetary sovereignty and financial stability. The regulatory chess game is heating up as different countries try to figure out how to handle this whole stablecoin situation.