USDThis Week in Stablecoin and Tokenization: Banks Double Down on Digital Dollars
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Citigroup Considers Dollar-Backed Stablecoin and Announces $4 Billion Stock Buyback
Citigroup is exploring the issuance of a dollar-backed stablecoin, as announced by CEO Jane Fraser during the bank’s Q2 2025 earnings call. This initiative aims to enhance digital payments and aligns with ongoing efforts in tokenized deposits and crypto-asset custody services. As one of the first major U.S. banks to consider a proprietary stablecoin, Citigroup is responding to the growing demand for regulated digital payment systems. Following strong quarterly results, Citigroup's shares reached their highest levels since the 2008 financial crisis, prompting the board to authorize a stock buyback of at least $4 billion.
JPMorgan Unveils Stablecoin Strategy to Compete with Fintech Rivals
On July 15, 2025, JPMorgan CEO Jamie Dimon announced plans to launch stablecoin services and a proprietary deposit token to enhance payment strategies, framing the move as a defensive response to fintech competition. Dimon emphasized the need for banks to engage proactively to safeguard market share. Competitors like Citigroup and Bank of America are exploring stablecoin options and digital asset custody. Regulatory clarity is prompting this shift, with the House set to vote on the GENIUS Act, aimed at establishing a federal framework for stablecoin issuance, further incentivizing traditional banks to participate in this evolving landscape.
Schwab Plans Stablecoin Launch and Bitcoin, Ethereum ETF Expansion
Charles Schwab plans to introduce a stablecoin and expand spot trading for Bitcoin and Ethereum, according to CEO Rick Wurster. This prospective shift aims to enhance blockchain transaction solutions for Schwab’s vast client base, managing over $10 trillion in assets. The move could significantly impact the integration of digital assets within traditional finance, prompting institutional interest and cautious market reactions. Observers are particularly attentive to the potential for increased accessibility to digital assets and mainstream adoption, with confirmation on timelines and product details pending.
Tether and Circle Adapt to GENIUS Act, Tether Launches Compliant USDT for Institutions
Tether and Circle are responding strategically to the GENIUS Act, with Tether planning a new USDT version for institutional users that complies with the legislation. Circle views the act as validation of its business model. Tether's CEO, Paolo Ardoino, emphasizes adaptability and transparency, bolstered by a recent $1.3 billion profit. Coinbase's Brian Armstrong urges for comprehensive regulations, citing the act as foundational yet highlighting the need for further legislation. As of July 19, 2025, USDT maintains a market price of $1.00 and a market cap of approximately $160.9 billion, despite a 14.67% drop in trading volume.
Ripple, Circle Face Charter Pushback as SEC Declares Stablecoins Under Banking Oversight
As of July 18, 2025, major U.S. banking groups, including the ABA and ICBA, urged the OCC to halt banking license approvals for Ripple and Circle, citing insufficient transparency and noncompliance with fiduciary requirements. The OCC’s move could disrupt trust charter standards and spark regulatory gaps. Meanwhile, SEC Chairman Paul Atkins confirmed stablecoins will now fall under banking regulation to streamline oversight and reduce legal ambiguity. The shift demands heightened compliance from stablecoin issuers and may catalyze unified regulatory frameworks. Critics warn of systemic risks if crypto firms gain charters without meeting traditional banking expectations.
PayPal Expands PYUSD Stablecoin to Arbitrum, Enhancing Blockchain Flexibility
PayPal is expanding its PYUSD stablecoin to the Arbitrum blockchain, enhancing user flexibility by integrating multiple blockchain options. Previously partnered with Ethereum and Solana, PYUSD, issued by Paxos, remains pegged at $1 and fully backed by USD deposits and US Treasury instruments. This expansion aims to improve competitiveness in the evolving fintech landscape, leveraging Arbitrum's speed and low fees. The updated terms reflect transaction limits on the new blockchain, allowing for a unified user experience across platforms. PYUSD's introduction in August 2023 and subsequent growth aligns with PayPal’s goal of enabling stable digital currency for commerce.
Ondo Acquires Strangelove, Brings 100+ Tokenized U.S. Assets to BNB Chain and Sei
Ondo Finance announced two major moves to accelerate real-world asset (RWA) adoption: the acquisition of blockchain infrastructure firm Strangelove to enhance its open-source and modular tech stack, and a partnership with BNB Chain to bring over 100 tokenized U.S. equities, ETFs, and funds to its users. This expansion onto BNB Chain—second only to Ethereum in daily active users—, grants 24/7 on-chain access to fractionalized U.S. securities. Ondo Finance also launches USDY, a tokenized US Treasury fund on the SEI Blockchain. These chains are added to Ondo’s Global Markets Alliance, aiming to boost liquidity, interoperability, and investor protection in tokenized capital markets.
KuCoin Launches xStocks, Offering Tokenized Equities like Tesla and S&P 500 on Solana
KuCoin has launched xStocks, a new line of tokenized equities, allowing access to popular US stocks like Tesla and the S&P 500 ETF via the Solana blockchain. Each token is backed by real shares in regulated custodial accounts. With over 41 million users globally, KuCoin aims to enhance flexible, borderless investing for retail traders. xStocks enables seamless switching between crypto and equities under one account, using USDT, with a focus on lower transaction fees and faster trading. Regulated under Swiss law, this initiative reinforces user trust and integrates traditional finance with crypto innovation for broader investment opportunities.
Kamino Integrates Tokenized Stocks as Collateral, Pioneering DeFi Lending on Solana
Solana-based decentralized lending protocol Kamino has integrated tokenized stocks, specifically launching with AAPLx, allowing users to borrow stablecoins against these equities. This development positions Kamino as the first major DeFi borrowing/lending protocol to use tokenized equities as collateral. The xStocks feature, utilized by platforms like Kraken and Bybit, enables 24/7 trading and fractional ownership of U.S. stocks and ETFs. With nearly $3 billion in total value locked, Kamino aims to evolve into a comprehensive on-chain asset marketplace while navigating regulatory challenges associated with tokenized securities.
Dubai's Tokenization Boosts Real Estate Market: 68% of 1,025 Investors Are First-Time Buyers
Dubai's real estate market is experiencing a significant shift with the introduction of tokenization, attracting 1,025 investors, 68% of whom are first-time buyers. The Real Estate Tokenization Project has funded five ventures, with the market projected to reach $16 billion by 2033. Notably, 462 investors contributed to luxury tokenized properties, with an average investment of $2,432. Despite a forecasted 15% price correction due to increased housing supply, Dubai's blockchain strategy aims to sustain its allure. The global tokenized real estate market could reach $16 trillion by 2030, showcasing the burgeoning potential of this investment model.
Bank of England's Andrew Bailey Warns Against Stablecoins, Cites Financial Risks
Bank of England governor Andrew Bailey cautioned against banks issuing stablecoins, emphasizing their potential systemic risks to the financial system and the loss of government control over currency. He supports tokenizing deposits instead and opposes a central bank digital currency. As chairman of the Financial Stability Board, he aims to regulate stablecoin proliferation. In contrast, the U.S. government, under the Trump administration, prioritizes stablecoin regulations to extend dollar dominance, relieving inflation pressures through tokenization of U.S. debt. European officials warn that U.S. dollar stablecoins could threaten the EU financial system, potentially displacing the euro.
This article has been refined and enhanced by ChatGPT.
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