Stable Weekly NO.2: The Rise of Yield-Bearing Stablecoins and the Global US Treasury Landscape
Tether hoarding US Treasuries, Fidelity with $6 trillion AUM enters the market, and yield-bearing stablecoins on the rise
Global payments are undergoing a transformation, with stablecoins at the heart of this revolution. They are not only reshaping cross-border transactions but also redefining the future of payments. Cobo is at the forefront of this change, dedicated to building next-generation stablecoin payment solutions.
To help you stay ahead of this fintech revolution, Cobo has launched "Stable Weekly," a dedicated stablecoin report that regularly interprets key developments and technological breakthroughs in the stablecoin sector.
Stablecoins have become an indispensable part of the global financial system. In 2024, Tether became the seventh-largest buyer of US Treasuries, holding $33.1 billion in government bonds, surpassing Canada, Mexico, and Germany. While traditional nations are reducing their Treasury holdings, stablecoin companies are continuously increasing theirs.
This investment model has yielded remarkable returns. Tether reported profits of $13 billion last year, but all earnings ultimately flow to the company, not the token holders. One key source of these profits is Tether investing the underlying funds backing its $143 billion USDT into the US Treasury market, earning substantial interest from high yields.
This exemplifies the typical business model of traditional stablecoins: users contribute funds, while issuers enjoy exclusive returns. In other words, users holding 1 dollar of USDT will always have just 1 dollar in their account, regardless of market changes. Meanwhile, Tether utilizes these funds to invest in high-yield assets, capturing all profits.
Yield-bearing stablecoins are attempting to disrupt this traditional model. New stablecoins like USDe and lvlUSD distribute investment returns directly to token holders through smart contracts, fundamentally changing the rules. Users are no longer 'providers of free capital' but direct beneficiaries in the yield chain.
As the crypto market enters an adjustment period, projects focusing on practical value are starting to stand out, with yield-bearing stablecoins being typical examples. However, the influence of stablecoins extends far beyond yield distribution.
In fact, stablecoins are gradually taking root in global payment scenarios. Delivery drivers in Venezuela use USDT to combat hyperinflation, the Actual platform supports USDC-based invoice payments in over 130 countries, and OpenAI founder Altman's World Network is partnering with Visa to expand application scenarios. This explains why USDC's market value doubled to $56 billion last year, becoming a market focus.
Political forces are also driving this trend. Trump-backed World Liberty Financial is testing the $USD1 stablecoin, and the US Treasury Secretary has publicly stated that stablecoins are crucial for maintaining the dollar's global dominance. In the Philippines, the largest payment app GCash now supports USDC, covering nearly 100 million users, significantly impacting this market with annual remittances of $38.3 billion.
Meanwhile, traditional financial giants are entering the field. Fidelity (managing assets worth $6 trillion) has announced the launch of its own stablecoin, competing with Circle and PayPal for market share in the digital dollar space. Under the impending crypto-friendly policies, financial institutions are racing to seize the opportunities presented by digitalized dollars.
Week’s Highlight
🎯 Yield-Bearing Stablecoins: The Next Major Competitive Battlefield in Crypto
Traditional banks often offer account opening rewards to attract customers: "Deposit $3,000, get $100 cash back." Yield-bearing stablecoins are adopting this strategy but on a larger scale and with greater efficiency.
Many believe stablecoins cannot generate returns because their price is fixed at $1. This overlooks a fundamental fact: yield doesn't only come from price fluctuations but can also come from profit sharing. Stablecoin issuers are willing to distribute returns to users to encourage holding their tokens, similar to how Uber and Lyft captured market share through massive subsidies in their early days.
The core of yield-bearing stablecoins is simplifying complex DeFi (decentralized finance) protocols into a product that users can easily understand, summarized in one sentence: deposit stablecoins, easily earn high yields.
The unique advantages of the crypto world make this model particularly effective: funds can participate in multiple projects simultaneously, strategies can be combinatorially optimized, processes can be automated, and capital can flow across boundaries.
This trend has spread globally, most notably in Latin America. Users there earn stablecoin yields through platforms like Lemon Cash, Mountain Protocol和 Nubank. These platforms simplify complex DeFi interactions, allowing ordinary users to easily access yields. CoinGecko recently even added a "yield-bearing stablecoins" category, indicating a fundamental market shift.
For users, the key is how to participate wisely. These high yields won't last forever; as the market matures, subsidies will decrease and yields will decline. The best strategy is to participate when subsidies are abundant to maximize value.
For entrepreneurs, this represents a huge opportunity. Yield-bearing stablecoins have become a hotspot pursued by venture capital, however, the entry barrier is not low—requiring solid technical foundations and comprehensive risk control systems.
Cobo provides entrepreneurs with a complete suite of stablecoin solutions, from wallet infrastructure and risk control and compliance to yield generation, allowing startup teams to focus on product differentiation and user acquisition rather than duplicating infrastructure building.
In the long run, automatically providing yields will become a standard feature of stablecoins, not a differentiating advantage. Companies that don't offer such products will fall behind competitors. However, transparency and risk management will become key considerations for users.
Regulation & Compliance
Key Points:
Circle becomes the first and only stablecoin issuer to receive approval for use in the Japanese market
Circle launches operations in Japan through its local entity Circle Japan KK, establishing a strategic joint venture with SBI Holdings
SBI VC Trade launched USDC on March 26, with other major exchanges including Binance Japan, bitbank, and bitFlyer to follow
Circle worked with Japanese regulators, industry participants, and banking partners for over 2 years to prepare for entry into the Japanese market
Why It Matters:
As a major global economy, Japan's opening marks important recognition of stablecoins by mainstream financial markets
USDC's entry into the strictly regulated Japanese market demonstrates Circle's leadership in compliance
🏛️ Fintech and Crypto Companies Actively Seeking Banking Charters Under Trump Administration
Key Points:
Multiple fintech and crypto companies are applying for state or federal banking charters, anticipating a more favorable regulatory environment, despite the crypto community's traditional resistance to centralized banking
Anchorage has already obtained a federal trust charter, Kraken and Avanti have special purpose depository institution charters in Wyoming, while Paxos and Protego are also in the application process
Why It Matters:
Becoming a bank allows companies to accept deposits and reduce lending costs but requires stricter regulation, reflecting the industry's shift toward compliance
Between 2010-2023, regulators approved an average of only 5 new bank charters annually, far below the 144 between 2000-2007, but recent regulatory signals suggest the approval process may be simplified
🏛️ Wyoming Plans to Launch WYST, America's First State Government Stablecoin, in July
Key Points:
WYST is being tested on Avalanche, Solana, and Ethereum multi-chain platforms, with cross-chain technology support from LayerZero
This could become the first fiat-backed stablecoin issued by a public entity in the United States
Why It Matters:
Marks the formal entry of government entities into the stablecoin market, potentially changing the regulatory landscape between traditional finance and cryptocurrencies
Provides a practical case for government digital currency exploration against the backdrop of a global stablecoin market reaching $230 billion and expanding payment and remittance applications
New Launches
👀 Fidelity Investments Prepares to Launch Stablecoin, Will Enter Tokenized Bond Market
Key Points:
Fidelity Investments (managing $6 trillion in assets) is in the final stages of launching its own stablecoin, planned as digital cash in a blockchain version of a U.S. dollar money market fund
The company has filed documents with the SEC to register a blockchain-based digital version of a money market fund that invests in low-risk short-term debt securities, currently only available to hedge funds and institutional clients
This move will put Fidelity in the ranks of institutions like Circle and PayPal that have issued digital dollars, entering the competitive stablecoin market dominated by USDT and USDC
Why It Matters:
As a traditional financial giant, Fidelity's stablecoin launch signifies accelerated entry of institutional financial service providers into the crypto asset space, reflecting the growing interest in stable tokens by mainstream institutions
This is part of Fidelity's strategy to enter the tokenized government bond market, with the stablecoin serving as infrastructure for its tokenized financial ecosystem, providing reliable digital currency for transaction settlement
This phenomenon continues the historical tradition of communities and private entities creating unofficial currencies when traditional monetary systems are insufficient, with major institutions replicating this model on blockchain while profiting through fees and controlling currency flow
👀 BeerMe Launches Stablecoin-Based URL Payment Links
Key Points:
BeerMe launches a USDC-based URL payment system where users don't need to download apps or link bank accounts, and can share payment links through any platform including WhatsApp, Signal, and iMessage
The service uses the Token Locker protocol, storing tokens in secure on-chain "vaults," allowing recipients to withdraw funds simply by clicking a link
Why It Matters:
BeerMe uses Privy technology to embed self-custodial wallets for users, enabling USDC use without existing cryptocurrency knowledge, creating a seamless user experience
This URL-based stablecoin payment method provides a borderless, permissionless alternative for global P2P transfers, demonstrating the penetration of crypto technology into everyday application scenarios
Key Points:
Resupply protocol allows users to deposit crvUSD or frxUSD into Curve Lend or Fraxlend, and use this as collateral to borrow reUSD stablecoins
The protocol, created by Convex and Yearn, includes an insurance pool mechanism for security, offers borrowing rates as low as half the market lending rate (minimum 2%), and provides an extremely high 95% loan-to-value ratio
Why It Matters:
Through "re-collateralization," users can participate in other DeFi strategies with borrowed reUSD while continuing to earn their original lending yields, improving stablecoin asset efficiency
While 95% LTV increases capital efficiency, it also increases liquidation risk (a 5% decrease in collateral value can trigger liquidation), requiring users to balance high returns with high risk
Key Points:
World Liberty Financial USD (USD1) tokens have been deployed on Ethereum and BNB Chain with a supply of about 3.5 million
Blockchain data shows USD1 token interactions with addresses from Wintermute trading company and BitGo custody institution
Binance founder CZ "welcomed" the project on social media, generating widespread attention and subsequently leading to multiple copycat projects
Why It Matters:
The project, led by Zachary Folkman and Chase Herro, is one of the first crypto projects to receive Trump's support
U.S. Treasury Secretary Scott Bessent stated that stablecoins play a crucial role in maintaining the dollar's status as a global reserve currency
WLFI has declared that USD1 is currently not tradable and has warned users to follow official announcements and avoid investing in counterfeit projects
👀 Sam Altman's World Network in Talks with Visa for Stablecoin Payment Wallet Collaboration
Key Points:
World Network is negotiating with Visa to link on-chain card functionality to self-custodial crypto wallets, while also engaging with crypto card service providers like Rain (backed by Coinbase and Circle)
Tools for Humanity has submitted product requirements to card issuers, planning to add fiat channels and global merchant stablecoin payment capabilities to World Wallet
Following the World Chat app launched this month, World Network continues to advance its strategy of building World Wallet into a "mini bank account" supporting various transaction functions
Why It Matters:
This move will further expand Altman's biometric project Worldcoin into the payment sector, enhancing its utility and application scenarios
Sources suggest that given Altman's resources and influence, the plan will pose significant competitive threats to existing wallet providers
Key Points:
Juno will first issue a Mexican peso stablecoin (MXNB), deployed on Ethereum's layer-2 network Arbitrum
Has launched the Juno Mint platform, providing API tools for enterprises to issue, redeem, and convert MXNB
The platform connects with Mexico's SPEI banking system, enabling fiat deposit and withdrawal channels
Why It Matters:
Marks Latin American local crypto enterprises' entry into the regional stablecoin market, helping solve cross-border payment pain points in the region
Provides more convenient digital currency financial services for local users by connecting traditional banking systems and blockchain networks
Key Points:
Circle launches the second version of its Cross-Chain Transfer Protocol (CCTP V2), enabling faster settlement times and enhanced smart contract composability for USDC transfers across blockchains
The new version introduces a "Fast Transfer" feature, reducing USDC transfer times between Ethereum and its layer-2 networks from minutes to seconds
CCTP V2 improves cross-chain transfer efficiency by completing message authentication before the source chain
Key Points:
GCash, similar to China's Alipay or WeChat Pay, has annual transactions exceeding $65 billion (3.8 trillion Philippine pesos) and provides crypto services through its GCrypto subsidiary in collaboration with local licensed exchanges
The platform is jointly owned by China's Ant Group, Ayala Corporation, and Globe Telecom's 917Ventures, currently offering trading in 39 different crypto assets
Bloomberg reports that GCash may seek an IPO valuation of at least $8 billion before the end of 2025, but the company is not rushing to go public after a funding round valuing it at $5 billion
Why It Matters:
Philippines' massive overseas worker remittance market: The Philippines' remittance market reached a record $38.3 billion in 2024, accounting for 8-10% of GDP; stablecoins provide a low-cost option for this huge market, and this move will accelerate stablecoin adoption in daily payments
This model reduces compliance costs through partnerships with local licensed exchanges rather than building its own infrastructure, while providing a wider range of services, offering a new paradigm for financial inclusion in developing countries
Key Points:
Cross-border B2B payment platform Actual now supports collection via USDC on the Base network, allowing customers to pay through any bank account, blockchain, or stablecoin
The platform provides hybrid crypto and fiat payment solutions, currently supporting 4 stablecoins on 8 blockchains, as well as ACH/wire transfers (US) and SEPA (EU) payment methods
Why It Matters:
Actual breaks down barriers between traditional finance and crypto payments, providing a global solution for corporate accounts receivable/payable processes
Plans to expand support for more fiat currencies including CAD, CNY, HKD, SGD, AED, etc., as well as new blockchains and stablecoins, reflecting the localization trend of crypto payment services
Key Points:
CoinGecko platform officially launches a new "Yield-Bearing Stablecoin" classification standard
This type of stablecoin provides passive interest income for holders while maintaining stable value
Why It Matters:
This classification reflects the increasingly segmented development trend of the stablecoin market, meeting investors' demands for earning yields while holding stable assets
Helps investors more clearly identify and compare characteristics of different yield-bearing stablecoin products, promoting standardized development of this market segment
Key Points:
Ethena Labs and Securitize jointly launch Converge blockchain, designed specifically to bring DeFi to tokenized real-world assets (RWA)
Converge serves as the issuance layer for Ethena stablecoins (USDe, USDtb, iUSDe) and Securitize tokenized products
Ethena will migrate a $600 million DeFi ecosystem, while Securitize brings approximately $2 billion in on-chain securities (including BlackRock BUIDL and funds from several major institutions)
Network security is supported by ENA token staking (via sENA), using a permissioned validator set composed of traditional financial entities and exchanges
Initial partners include DeFi protocols like Pendle, Avara, Morpho, and custody services like Copper and Fireblocks
Why It Matters:
Converge aims to connect traditional finance with digital dollars, bringing DeFi innovation to the RWA space
As a public chain combined with KYC mechanisms, it addresses challenges between tokenized regulated assets and DeFi innovation
Ethena plans to bring institutional funds on-chain through existing integrations
Market Adoption
🌱 Tether Becomes 7th Largest Net Buyer of US Treasuries in 2024, Purchase Amount Exceeds Multiple Countries
Key Points:
USDT stablecoin issuer Tether net purchased $33.1 billion worth of US Treasuries, ranking ahead of Canada, Mexico, and Germany
According to data released by Tether CEO Paolo Ardonio, Japan and China significantly reduced their US Treasury holdings during the same period, becoming net sellers
Why It Matters:
Stablecoin issuers have become core participants in the US government debt market, while traditional national powers are reducing Treasury holdings, indicating a reshaping of the global financial landscape
The active support for cryptocurrencies from the US Treasury Secretary and President Trump suggests that the US may view crypto assets as a new strategic tool for maintaining dollar hegemony
🌱 Bando Set to Launch New Services in Four African Countries: Nigeria, Ghana, South Africa, and Kenya
🌱 Circle Mints 250 Million USDC on Solana Chain, Worth $250 Million
🌱 Venezuelan Stablecoin Application Motocripto Supports Food Delivery Riders Accepting USDT Payments
Key Points:
Stablecoins as everyday payment tools are rapidly becoming popular in Venezuela, with mass adoption expected this year
Caracas food delivery riders "Motocripto" accept USDT payments on Arbitrum and TRON networks through the eldorado platform
Why It Matters:
In Venezuela, facing severe inflation and currency devaluation, stablecoins provide ordinary people with a practical tool to hedge against economic risks
This grassroots level adoption indicates that stablecoins have transformed from speculative assets to actual payment methods, demonstrating the practical value of cryptocurrencies in developing countries
🌱 Stablecoin Market Landscape Changes: USDC Share Doubles, USDT Market Share Slightly Declines
Key Points:
Under the drive of compliance processes and market strategies, USDC and USDT still dominate, but market shares show subtle changes.
USDC market value doubled to $56 billion, mainly benefiting from MiCA and DIFC regulatory approvals, joining of important strategic partners like Stripe and MoneyGram, and rapid expansion in global markets.
USDT total market value grew to $146 billion, remaining the largest stablecoin by market cap, but with some market share decline, decreased institutional adoption, and a gradual shift towards the P2P remittance market, consolidating its position in global payments.
Capital Moves
Key Points:
Stablecoin protocol Level completes a new $2.6 million funding round led by Dragonfly Capital with participation from Polychain, bringing total funding to $6 million
lvlUSD stablecoin invests USDC and USDT collateral assets into DeFi lending protocols like Aave, automatically managing reserves, currently offering an annual yield of 8.3%
Why It Matters:
As the crypto market cools, demand for yield-bearing stablecoins is surging; Level plans to integrate the Morpho protocol soon to expand yield sources and develop more use cases for lvlUSD
The protocol's fully on-chain, transparent yield generation model differentiates it from competitors relying on opaque centralized methods; the team aims to increase lvlUSD market cap to $200-250 million
💰 Visa Card Issuer Rain Secures $24.5 Million Funding, Promoting Stablecoin Adoption in Daily Payments
Key Points:
Rain completes $24.5 million funding led by Norwest Venture Partners, with participation from Galaxy, Coinbase Ventures, and others
The company focuses on providing low-friction stablecoin daily payment solutions for consumers
Rain achieved 15x revenue growth in 12 months and currently processes payments in over 100 countries
The company leverages Visa principal membership and unique blockchain infrastructure to accelerate global stablecoin payment card issuance
Why It Matters:
Last year, stablecoin transfer transaction volume exceeded the combined transaction volume of Visa and Mastercard, indicating enormous market potential
Together with recent funding cases like RedotPay ($40 million funding) and Mesh ($82 million funding), this shows that the crypto payment track is favored by capital
As use cases for stablecoins in cross-border payments, remittances, and dollar savings grow, the demand for convenient daily consumption also rises
💰 Stablecoin Giant Tether Spends €10.8 Million to Acquire 30% Stake in Italian Media Company Be Water
Key Points:
Be Water owns podcast production company Chora Media, Will Media, and film production and distribution company Be Water Film
This acquisition is part of Tether's recent investment expansion strategy, having previously invested in companies across agriculture, AI, brain-computer interfaces, and other fields
Since late 2023, Tether has invested in German tech company Northern Data, social media platform Rumble ($775 million), and Italian football club Juventus
Why It Matters:
Reflects how the issuer of USDT stablecoin with $144 billion market cap is actively diversifying its portfolio using its $7.2 billion in excess capital
Tether is expanding from the cryptocurrency sector to traditional media, sports, and other industries, showing how stablecoin business profits (mainly from US Treasury interest) are driving rapid expansion of its commercial footprint