stablecoins

JPMorgan's latest report points out that although tokenized money market funds have revenue potential, they still only account for about 5% of the broader "stablecoin system," and the core position of stablecoins in the crypto ecosystem is unlikely to be replaced in the short term.The report states that stablecoins have become the default "cash tool" for trading, collateral, settlement, cross-border payments, and liquidity management, widely used in centralized exchanges and DeFi protocols, while tokenized money market funds are constrained by their securities characteristics, subject to registration, disclosure, and transfer restrictions, resulting in structural regulatory disadvantages.Analysts at JPMorgan, led by Nikolaos Panigirtzoglou, expect that without significant changes in the regulatory environment, the market size of tokenized money market funds is unlikely to exceed 10% to 15% of the overall stablecoin market. Current demand is mainly concentrated among crypto-native investors seeking yield and institutional funds looking to balance on-chain settlement with traditional asset protection.The report also notes that although tokenized funds have advantages such as near real-time settlement, 24/7 transfers, and automated clearing, their growth is still constrained by liquidity, counterparty risk, and regulatory uncertainty. JPMorgan believes that in the absence of regulatory easing, these products will struggle to challenge the infrastructure-level position of stablecoins in the crypto market.

According to a news release from the Hong Kong Special Administrative Region, the Hong Kong police announced that they have joined law enforcement agencies from 9 countries and regions, including Singapore, South Korea, and Thailand, to combat cross-border fraud and money laundering activities. This operation took place from March 10 to May 7, resulting in the arrest of 3,018 individuals, involving over 138,000 fraud cases, with total losses of approximately $752 million (about HKD 5.89 billion).During the operation, law enforcement agencies froze a total of 101,989 bank accounts and successfully intercepted approximately $161 million (about HKD 1.26 billion) in fraudulent funds. Among them, the Hong Kong police arrested 870 individuals and intercepted approximately HKD 539 million in funds. The largest case involved a Singapore company that was defrauded of $36 million (about HKD 280 million), with the related funds subsequently flowing into multiple bank accounts in Hong Kong and other regions. About half of this amount was converted into stablecoins and dispersed into different virtual asset wallets, with the police successfully freezing $20 million of these funds after tracking.Investigations show that money laundering through virtual asset platforms is on the rise, and various regions need to continue enhancing their capabilities to respond to crimes involving virtual assets through intelligence sharing and collaborative mechanisms.

According to CoinDesk, bipartisan lawmakers Steven Horsford, Max Miller, Suzan DelBene, and Mike Carey jointly reintroduced the "Digital Asset Protection, Accountability, Regulatory, Innovation, Taxation, and Revenue Act" (also known as the "Equality Act") this Wednesday. The new version of the bill mainly covers the following points: first, it stipulates that regulated payment stablecoins do not generate gains or losses if the cost basis is not less than 99% of the redemption value; second, it establishes a safe harbor for broker-dealer transactions or taxpayer account transactions; third, it clarifies that "wash sale" rules apply to digital assets; fourth, it requires the IRS to assess the current tax burden of small cryptocurrency transactions and to study the feasibility of establishing a tax exemption for transactions under $200 and the potential risks of abuse.The cryptocurrency industry has long advocated for tax exemptions on small transactions to promote the use of cryptocurrencies in everyday payment scenarios. Lawmaker Horsford stated that tax policy is the foundation of the cryptocurrency regulatory framework, and that current tax laws have not clearly addressed many core issues related to digital assets.

According to The Block, Sarah Breeden, Deputy Governor for Financial Stability at the Bank of England, presented a vision for the digitization of the UK financial system at the 2026 London City Week conference, focusing on the integration of regulated stablecoins. A draft rule for systemic stablecoins is planned to be released next month, with the final version to be completed by the end of the year. Breeden pointed out that future retail payment systems should include various interchangeable forms of currency, including digital deposits and stablecoins.She stated that shared ledger technology is expected to reduce payment costs and accelerate processing speeds, minimizing intermediaries. In addition, smart contracts support customization, conditionality, and automation, further enhancing the efficiency of retail payments. Breeden emphasized that the Bank of England will actively support the responsible adoption of AI technology, including agent payments and commercial transactions.

Gate Europe CEO Dr. Giovanni Cunti attended the VI3NNA Congress 2026 and delivered a keynote speech titled "The Role of Exchanges and Stablecoins." The conference was held from May 19 to 20 in Vienna, Austria, bringing together industry representatives from Web3, AI, finance, and regulation to discuss the future development direction of the European digital economy.Giovanni Cunti's speech analyzed the popularization of stablecoin applications, industry development trends, and how blockchain financial infrastructure is gradually reshaping the traditional financial market landscape. It focused on how crypto asset service providers, including Gate Europe, are transitioning from meeting user needs to playing a key role in driving industry structure and future market development. In addition to the keynote speech, Giovanni Cunti also participated in several roundtable discussions, engaging with policymakers, financial institutions, investors, and industry innovators on topics such as digital asset regulation, infrastructure development, and real market implementation.Currently, Gate's Malta company, Gate Europe, has obtained European MiCA and PI licenses under the regulation of the Malta Financial Services Authority (MFSA). As the industry continues to move towards compliance and institutional development, Gate is actively participating in global key industry dialogues and promoting the long-term development of the digital asset ecosystem.

According to data from DefiLlama, the supply of stablecoins has reached a historic high, exceeding $32.3 billion.

According to The Block, the total supply of stablecoins has surpassed $300 billion, but growth has stagnated. Tether's USDT has increased by over $5 billion in the past month, while the supply of USDC, USDe, and PYUSD has collectively decreased by about $4.2 billion during the same period, resulting in a net growth of only about $900 million, equivalent to a total supply growth of 0.3%.The supply of USDe has decreased by 28% in the past month and nearly 34% year-to-date, as its reliance on the funding rate mechanism of perpetual contracts has been compressed following the deleveraging event in October last year. Sky's USDS supply has increased by 48.9% year-to-date, and World Liberty Financial's USD1 supply has increased by 33.7%, absorbing most of the capital rotation. The supply of PYUSD has decreased by 13% in the past month. The issuance of bank-issued and GENIUS Act-compliant stablecoins has proven to be more challenging than expected. Analysts point out that if new issuers want to directly replace USDT's market share, they need to offer higher yields, better distribution channels, or regulatory advantages that USDT cannot match.

According to Onchain Lens monitoring, the U.S. government sent 319 ETH (approximately $673,000) and $933,774 worth of USDT, DAI, and USDC from the seized funds of FTX Alameda to Coinbase.

According to CoinPost, the Financial Services Agency of Japan announced a cabinet order amendment, officially recognizing foreign trust beneficiary rights that are "equivalent" to Japan's electronic settlement system as electronic settlement methods under the Fund Settlement Act. The amendment will take effect on June 1.This revision clarifies: first, it establishes a legal basis for qualified foreign trust-based stablecoins to provide services within Japan; second, it stipulates that electronic settlement method operators should use equivalence with the Japanese system as the eligibility criterion when handling foreign electronic settlement methods. At the same time, relevant foreign trust beneficiary rights will be excluded from the Financial Instruments and Exchange Act's securities and will only be regulated as electronic settlement methods.The Liberal Democratic Party of Japan has officially approved the "AI + Blockchain Finance" proposal, supporting yen stablecoins and tokenized deposits.

On May 19, the Financial Services Agency of Japan announced the revised Cabinet Office Ordinance related to electronic payment methods and transaction operators, clearly including trust beneficiary rights established under foreign laws that are equivalent to the Japanese system within the scope of electronic payment methods under Japan's Fund Settlement Act, providing a legal basis for the compliant circulation of trust-type stablecoins issued by specific foreign entities within Japan. The new regulations will take effect on June 1, 2026, and also clarify that the relevant foreign trust beneficiary rights are not considered securities under the Financial Instruments and Exchange Act.

According to Gate Ventures' latest weekly report, global markets were significantly pressured last week due to inflation data and rising energy prices. The S&P 500 index initially broke through 7,500 points for the first time, but subsequently fell back as both CPI and PPI data exceeded expectations, leading the market to begin pricing in potential interest rate hike risks. Against this backdrop, the cryptocurrency market also weakened, with BTC dropping 8.1% last week and ETH falling 10.2%. The spot BTC ETF recorded a net outflow of $1 billion, and market sentiment returned to the "panic" range.At the industry level, institutional investments in stablecoins and on-chain financial infrastructure are accelerating. JPMorgan is advancing a tokenized money market fund aimed at stablecoin issuers; DTCC will use Chainlink to build an all-weather collateral management network; Hana Bank has acquired a stake in Upbit operator Dunamu for $670 million, further reflecting that traditional financial institutions are accelerating their entry into the cryptocurrency infrastructure sector.In terms of investment and financing, a total of 14 financing deals were completed last week, with a total scale of $1.113 billion, of which financing in the infrastructure sector exceeded $1 billion, dominating the market. Blockchain analytics firm Elliptic completed a $120 million financing round, with Deutsche Bank and Nasdaq participating; Bitcoin custody platform Onramp also completed a $12.5 million Series A financing, continuing to expand its institutional-grade custody infrastructure. Overall, in the context of rising macro uncertainty, market funds continue to concentrate on compliance, custody, and institutional-grade services.

According to Bloomberg, the Bank of England is considering an alternative in response to the industry's opposition to the proposed limits on stablecoin holdings. Bank of England Deputy Governor Sarah Breeden stated that the central bank is exploring the possibility of setting a temporary "guardrail" on the total issuance of stablecoins as an alternative option to the existing proposal. This statement indicates that the Bank of England is reassessing its regulatory framework for stablecoins.

According to CoinPost, the "Next Generation AI and On-Chain Finance Concept Project Group" of the Liberal Democratic Party of Japan has released a proposal that suggests combining AI with blockchain to automate decision-making, financing, and asset management, operating around the clock, and lists finance as the "18th growth investment area."Specific measures in the proposal include: promoting the tokenization of current accounts at the Bank of Japan (including wholesale CBDC), completing the argument organization within the year; the three major banks jointly issuing stablecoins, aiming to launch practical operations before March next year; and promoting the on-chain tokenization of real assets (RWA) such as accounts receivable and real estate.On the international cooperation front, the proposal suggests establishing an "AI and On-Chain Finance Asia Policy Dialogue Framework" and advancing cross-border settlements using yen-denominated stablecoins, building a "Global SC Corridor Concept."

According to a joint article by several executives in the French cryptocurrency industry, the current tax policy on stablecoins is severely outdated. Under current regulations, converting stablecoins to fiat currency and withdrawing to a bank account incurs taxes, forcing a large amount of crypto assets to remain outside the traditional financial system, which is expected to result in a tax loss of 1 billion to 3 billion euros annually.The article calls for the French government to make targeted adjustments to the "2027 Budget Bill" within the next six months, as AI agents are increasingly adopting stablecoins for payments. It suggests following the practices of other countries by defining the conversion of stablecoins to fiat currency as a "tax-free withdrawal." Industry experts warn that if this critical six-month window is missed, France may miss out on significant industrial benefits brought by the integration of AI and cryptocurrency payments.

According to The Block, Geoffrey Kendrick, the global head of digital asset research at Standard Chartered Bank, stated that the total scale of on-chain tokenized assets is expected to reach $4 trillion by the end of 2028, with stablecoins and real-world assets (RWA) each accounting for $2 trillion. Standard Chartered believes that DeFi protocols with mature risk control systems and scalability will be the main beneficiaries of this trend, while the advancement of the U.S. Clarity Act may become an important catalyst for accelerating the on-chain transition of traditional finance.Kendrick pointed out that the core advantage of DeFi lies in "composability." In an on-chain environment, the same asset can simultaneously earn yields, serve as collateral, and maintain liquidity, which the traditional financial system cannot achieve with similar efficiency. He stated that this structural advantage means "1+1=3." Standard Chartered cited BlackRock's tokenized U.S. Treasury fund BUIDL as an example, noting that the product not only yields about 4% from U.S. Treasuries but can also be converted into sBUIDL for use in lending protocol collateral and serves as a reserve asset for products like Ethena USDtb and Ondo OUSG.The report also noted that the current scale of off-chain assets is still about 1,000 times that of on-chain assets, and the tokenization of institutional-grade assets may become the core source of growth for the next phase of the industry. Regarding institutional adoption, Standard Chartered mentioned that Aave's asset scale once matched that of the 38th largest bank in the U.S., and the current daily trading volume of on-chain stablecoin lending has reached $1.5 billion to $2 billion.At the same time, the Bitcoin lending product developed in collaboration between Coinbase and Morpho currently has a loan scale of about $1.75 billion, covering approximately 22,000 borrowers, indicating that traditional financial institutions are gradually using DeFi as underlying infrastructure.