USDStablecoin Weekly: WLFI’s USD1, Tether’s Bold Plan, USDC Doubles, States Join In
Trump-Linked WLFI Launches USD1 Stablecoin Amid Fraud Alerts and Conflict of Interest Concerns
World Liberty Financial (WLFI), linked to Donald Trump’s family, announced the launch of its U.S. dollar-pegged stablecoin, USD1, on March 25, 2025, targeting institutional adoption. USD1 is backed by U.S. Treasury bills and other cash equivalents, aiming for a fixed $1 valuation. Custodian BitGo ensures insurance and regulatory compliance, with independent audits to validate reserves. Prior to its launch, WLFI warned of fraudulent tokens exploiting the USD1 name, while over $3.5 million worth of unauthorized tokens had been minted. WLFI has invested approximately $28.6 million in various digital assets, though it faces an unrealized loss of $1.62 million. The stablecoin sector, valued at over $233 billion, sees USD1 competing with major players like Tether and USDC. However, concerns regarding potential conflicts of interest and regulatory integrity due to Trump’s involvement have prompted calls for ethics investigations and the need for robust oversight in the crypto industry.
Custodia and Vantage Launch Avit: First US Bank-Backed Stablecoin on Ethereum
Custodia Bank and Vantage Bank have introduced Avit, the first US bank-backed stablecoin, on Ethereum, marking a significant milestone in the integration of blockchain technology with traditional banking. This initiative involved a pilot featuring eight test transactions with a business customer, showcasing the minting, transferring, and redeeming of tokens compliant with federal banking standards. Avit operates under the widely utilized ERC-20 standard, demonstrating real-world applications in business-to-business transfers and fiat conversions. The project adheres to the Bank Secrecy Act, anti-money laundering regulations, and OFAC rules, establishing a benchmark for regulatory compliance. Custodia Bank's CEO, Caitlin Long, emphasized the groundbreaking nature of this legal and regulatory achievement, while Vantage Bank's CEO, Jeff Sinnott, noted its potential in reshaping financial systems. Importantly, Avit also utilizes Custodia’s US patent for tokenizing bank deposits, potentially paving the way for enhanced digital dollar payments amidst ongoing discussions on stablecoin regulation.
Fidelity Tests Stablecoin Amid Regulatory Changes and Institutional Interest, No Launch Planned Yet
Fidelity is currently testing its own stablecoin as part of its digital asset expansion, although it has no immediate plans to launch it. This development follows the company's recent filing for a tokenized money market fund, which aims to use blockchain for recordkeeping, underscoring Fidelity's interest in blockchain applications. The stablecoin market, valued at $231 billion, processed $27.6 trillion in transfer volume last year, surpassing major payment networks like Visa and Mastercard. Institutional interest in stablecoins is growing, fueled by clearer regulatory frameworks in the US, including the bipartisan GENIUS Act passed by the Senate Banking Committee, which mandates 1:1 reserves for dollar-pegged stablecoins. Additionally, the market for tokenized U.S. Treasuries has exceeded $5 billion, reflecting a trend towards tokenizing real-world assets. Overall, Fidelity’s exploration signals a significant shift in institutional finance towards digital assets amid evolving regulatory support.
Wyoming to Launch WYST Stablecoin in July 2025, Partnering with LayerZero
Wyoming is set to launch its own stablecoin, WYST, in July 2025, partnering with LayerZero for issuance. This fiat-backed stablecoin will be pegged to the US dollar using reserves such as cash, Treasury bonds, and repurchase agreements, ensuring a capital requirement of 102%. The state is considering nine blockchains, including Solana and Ethereum, to support WYST, marking a significant venture into cryptocurrency. Governor Mark Gordon announced the initiative at the DC Blockchain Summit, though it notably excludes Senator Cynthia Lummis, a proponent of crypto regulations. While fiscal conservatives have previously resisted using state funds for Bitcoin investments, Wyoming has $31 billion in investments that could potentially support the new stablecoin project. The interest from these reserves is anticipated to fund key areas like education and infrastructure, signaling a small-scale experiment that could lead to larger state commitments if successful.
USDC Supply Surges to $60 Billion, Doubling in a Year and Outpacing Tether Growth
The supply of USD Coin (USDC), a stablecoin issued by Circle, has soared to over $60 billion, doubling from $30 billion in March 2024 and surpassing its previous peak of $55 billion in 2022. USDC now holds a 25.4% share of the stablecoin market, an increase from 20.7% just three months prior. However, it still trails Tether (USDT), which maintains a dominant position with a market cap of $144 billion and a 63% market share. The total stablecoin market has expanded to $234.6 billion. USDC's growth has been fueled by increased adoption and compliance with European MiCA regulations, resulting in Tether being delisted from several European exchanges. Over the past three months, $16.5 billion of new USDC has been minted, significantly outpacing the $4.7 billion increase in USDT supply. Additionally, Circle is reportedly considering an initial public offering (IPO) to meet rising demand for stablecoins.
Paolo Ardoino Unveils 'Stablecoin Multiverse' as Tether Aims for 1 Billion Users
On March 27, 2025, Paolo Ardoino, CEO of Tether, announced the “Stablecoin Multiverse,” aiming to significantly expand Tether's reach to underbanked populations globally. This initiative reflects Tether's commitment to financial inclusion, with projections for USDT's user base to surpass 1 billion, up from over 400 million currently. Ardoino emphasized leveraging digital currency to bridge gaps left by traditional banking, contributing to broader economic access. The term “Stablecoin Multiverse” suggests a diversified stablecoin ecosystem, poised to transform financial access and monetary policies worldwide. Currently, Tether's USDT maintains a market cap of $144.18 billion, representing 5.05% market dominance, with a steady value at one dollar and a trading volume of $57.07 billion. This announcement has attracted attention from regulatory circles, indicating potential future discussions on policy and market stability as expanded stablecoin adoption continues to unfold.
JPMorgan Predicts Yield-Bearing Stablecoins Could Jump to 50% Market Share
JPMorgan analysts predict that yield-bearing stablecoins could surge from 6% to 50% of the stablecoin market cap due to their appeal in a high-interest-rate environment, akin to traditional money market funds. As of March 2025, top yield-bearing stablecoins have increased from $4 billion to over $13 billion in market cap following the U.S. election, with YLDS—recently approved by the SEC—igniting further momentum. Key factors for this growth include investor preference for earning interest without risky trading, acceptance of tokenized Treasurys as collateral by major crypto platforms, and their adoption in DeFi projects. However, regulatory classification as securities poses a barrier to wider retail adoption. Despite traditional stablecoins' liquidity advantages, the emerging yield-bearing stablecoins may gradually attract idle cash from these established assets, reshaping the stablecoin landscape as they gain acceptance in various financial applications.
Bitso Launches MXNB: Mexican Peso-Pegged Stablecoin on Arbitrum to Boost Trade and Investment
Bitso, a Mexican crypto exchange, is set to launch a Mexican peso-pegged stablecoin named MXNB on the Arbitrum layer-2 network. The stablecoin, fully backed by Mexican pesos on a one-to-one basis, will be managed by Bitso's subsidiary, Juno. The initiative aims to enhance foreign investment and trade in Latin America by streamlining cross-border payments, addressing challenges like high costs and slow transaction times. In 2023, Mexico was the world’s second-largest recipient of remittances, amounting to $61 billion, primarily from the US. A report by Chainalysis indicates a 42.5% year-on-year increase in crypto transactions received in Latin America, driven by high inflation and currency devaluation, fostering a growing reliance on stablecoins. The launch of MXNB comes amid increasing adoption of existing stablecoins like USDC and Tether’s MXNT, indicating a shift toward cryptocurrency as a stable store of value in the region.
This article has been refined and enhanced by ChatGPT.
