Stablecoin

The circulating supply of fiat-backed stablecoins has climbed above $284 billion, driven largely by USDT and USDC, and reigniting debate over potential risks to bank deposits. Economists Niall Ferguson and Manny Rincon-Cruz argue that stablecoins resemble modern bank notes and can grow alongside traditional deposits, while banking groups warn that reward-bearing tokens and rising transaction volumes could pressure funding costs and credit. Recent data on trillions of dollars in annual stablecoin payments and new U.S. regulation for payment tokens underscore how quickly this market is reshaping digital money usage.

Hong Kong's SFC set the cutoff for the legacy STREAMS platform at 12:00 AM on January 28, 2026, with a blackout until the morning of February 2, when STREAMS 2 becomes the only STR submission channel. During the gap, urgent STRs must be sent via email, phone, or fax. Paul Chan said stablecoin licensing will begin in Q1 2026, with HKMA approval and HK$25 million capital.

On Monday, Tether reported that its XAUt tokenized gold product now exceeds $2.2 billion in value and represents more than half of the gold‑backed stablecoin segment. The milestone comes as Comex gold moves above $5,000 per troy ounce and the US Dollar Index, which dropped 9.4% in 2025 and another 2.4% since Jan. 19, hits its weakest level since September amid central bank gold buying.

Bitwise Asset Management launched its first curated onchain vault on Morpho, aiming for up to 6% yield on USDC by deploying into over-collateralized lending markets while keeping user funds non-custodial. The firm oversees strategy and real-time risk and may add other stablecoins and DeFi approaches. Kraken also unveiled a vault-based "DeFi Earn" targeting up to 8% yields.

On Monday, the American Federation of Teachers asked the Senate to withdraw the crypto market structure bill, warning it poses profound risks to pensions and the broader economy. The 1.8 million‑member union said the Responsible Financial Innovation Act lacks adequate safeguards for crypto assets and stablecoins and could open retirement plans to unsafe holdings. The measure was first introduced in 2022 and updated in September.

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India will introduce the ARC stablecoin, pegged 1:1 to the rupee, in early 2026, according to project documentation. Developed by Polygon and fintech firm Anq, the digital asset aims to reduce capital outflows to USD-backed stablecoins and support domestic debt needs. The Reserve Bank of India will oversee operations through its Central Bank Digital Currency framework using a two-tier corporate account structure.

Gold dropped 6.8% on October 21, recording its steepest single-day decline in 12 years after reaching a record high of $4,381 per ounce. Tether minted $1 billion USDT within 24 hours, according to blockchain data. Institutional investors allocated $619 million into Bitcoin and Ethereum ETFs with zero outflows, suggesting potential capital rotation from traditional assets into digital currencies.

Federal Reserve Governor Christopher Waller directed staff to explore granting stablecoin firms limited access to Fed payment systems through restricted master accounts. The proposed framework would enable direct settlement on central bank infrastructure without traditional banking intermediaries. Speaking at the Fed's inaugural payment innovation conference, Waller acknowledged that distributed ledgers and crypto-assets have become integral to mainstream financial infrastructure.

Coinbase launched Payments MCP on Wednesday, enabling AI models including Claude and Gemini to execute wallet operations, fiat conversions, and stablecoin transfers through natural language commands. The company also introduced its Coinbase One Card in the United States, offering bitcoin cashback rewards of up to 4% for subscribers.