Wednesday July 2, 2025
Are Stablecoins Solving the Right Problem?
If 2024 was defined by crypto ETFs, then 2025 is shaping up as a contest between the growth of crypto treasury strategies and the expanding role of stablecoins. The question today is whether stablecoins are truly addressing a meaningful market need.
Note: This analysis is framed through the lens of developed markets. In developing economies, stablecoins may offer more utility as a tokenized dollar alternative with lower volatility than bitcoin.
Stablecoins today represent a $245 billion market within the confines of crypto, yet realistically their real-world adoption remains limited. Their core offering: instant, low-cost settlement is already well-served by existing market infrastructure using traditional financial rails. ACH, debit cards, and wire transfers provide scalable, trusted solutions for most consumer and business payments. Admit it, Venmo and Zelle are both great products. The issue with stablecoins is not its technical capability, but the absence of the layered trust and safety architecture that underpins traditional payment networks.
Visa $V and MasterCard $MA, for example, have built global systems that protect consumers from fraud, offer dispute resolution, and ensure transaction finality. Today, stablecoins offer none of these guarantees. Without fraud protection, liability coverage, and customer support, stablecoins carry significantly higher transactional risk.
To compete beyond crypto-native use cases, stablecoins must evolve. Specifically, they need a Layer 2 framework that mirrors the compliance, security, and accountability standards of incumbent networks. This includes robust KYC/AML enforcement, sanctions compliance, fraud assignment protocols, and cross-border reconciliation.
Blockchain transparency alone is not a substitute for trust. Until stablecoins build an innovative services layer and secure mass adoption, they will remain primarily useful within the crypto ecosystem, for FX arbitrage and as a dollar proxy in unstable economies. Stablecoins need more to meet the market demand required to replace traditional payment infrastructure.
◾ The Senate passed the Big Beautiful Bill without including Senator Lummis’s (R-WY) amendment to end double taxation on crypto miners. (Cointelegraph)
◾ Deutsche Bank $DB plans to offer a digital asset custody service by 2026. (Bloomberg)
◾ The European Central Bank approved two DLT-based settlement systems for central bank money. (Ecb.europa.eu)
Government & NGO Actions
◾ The SEC approved the conversion of the Grayscale’s Digital Large Cap Fund $GDLC into an ETF. (SecFiling)
◾ Connecticut’s Governor signed a bill banning the state from holding or investing in digital currencies. (WTNH)
◾ Arizona’s Governor vetoed legislation that would have allowed the state to hold seized crypto assets. (Mcusercontent)
◾ New York’s Attorney General warned Congress that current crypto proposals lack safeguards to protect US consumers. (Ag.ny.gov)
◾ UK prosecutors charged a Russian-British national for sending £4,000 ($5,510) in crypto to support sanctioned Russian separatists. (Reuters)
Financial Notices & Public Company Releases
◾ MARA $MARA June operations update:
Bitcoin produced: 713
Energized hashrate: 57.4 EH/s
◾ Riot Platforms $RIOT reported that its sold shares in BitFarms $BITF dropping its ownership from 14.3% to 12.3%. (RiotPlatforms)
◾ SharpLink Gaming $SBET added 9,468 ether brining its total ETH holdings to 198,167 ($485 million) (GlobeNewswire)
◾ The Smarter Web Company $TSWCF added 230 bitcoin to its treasury, bringing total holdings to 773 BTC. (SmarterWebCompany)
◾ eToro $ETOR secured a $250 million revolving credit facility. (GlobeNewswire)
◾ DeFi Development $DEFI announced a proposed private offering of $100 million in convertible notes. (GlobeNewswire)
◾ Web-based design tool Figma disclosed holdings of over $69 million in bitcoin ETFs in its IPO filing. (SecFiling)
◾ xAI raised $10 billion through a combination of secured debt and equity. (X)
◾ Hut 8 was awarded 5-year capacity contracts at each of its four natural gas-fired power plants in Ontario by the IESO. (GlobeNewswire)
Restructuring, Hacks, Losses & Legal News
◾ A US bankruptcy judge denied Tether’s request to dismiss Celsius’ lawsuit over collateral liquidation. (CourtFiling)
AI Announcements
◾ Cloudflare $NET introduced a tool to block AI crawlers from accessing website content without creator permission. (Cloudflare)
◾ Grammarly is acquiring Superhuman to expand its AI-powered writing and productivity tools. (Reuters)
◾ Baidu is upgrading its search engine with chatbot-style AI features. (Bloomberg)
◾ Intuit $INTU is introducing AI tools for TurboTax, Credit Karma, QuickBooks and Mailchimp. (Intuit)
◾ The English Premier League signed a five-year deal to integrate Microsoft $MSFT Copilot across its digital platforms and named Microsoft its official cloud provider. (PremierLeague)
Protocols, Applications & Business News
◾ Swissquote was ordered by Swiss regulators to strengthen defenses against fraud and cyberattacks. (Bloomberg)
◾ Deutsche Bank and Galaxy Digital $GLXY are launching Germany’s first regulated euro stablecoin, EURAU. (FinanceFeeds)
◾ Paxos is rolling out its Global Dollar Network across Europe. (PRNewswire)