Kraken crypto exchange plans to halt spot trading for several stablecoins in the European Economic Area. Many enthusiasts wonder why Kraken is delisting Tether USDT and other stablecoins in the EEA when stablecoins often serve as important anchors for crypto traders. This change ties to Markets in Crypto-Assets Regulation, also known as MiCA, which introduces new rules that affect stablecoins like Tether USDT, Tether EURt, TrueUSD, PayPal USD, and TerraClassic USD. MiCA stablecoin compliance deadlines require each exchange to meet new standards for crypto assets regulation in Europe, and these rules impose margin trading limitations in the EEA. The European Union (EU) crypto regulation aims to protect retail investors in crypto while setting guidelines for token trading. Retail participants often rely on stablecoins to reduce exposure to market volatility, so the stablecoin delisting has sparked debate about the future of digital assets in the EU crypto market.

Kraken delisting stablecoins in Europe began with announcements from Mark Greenberg, who serves as Global Head of Asset Management. He once stated that Kraken would not remove Tether USDT in Europe, yet regulatory compliance under MiCA forced a shift in plans. A spot trading halt timeline for Tether USDT and other stablecoins will begin in stages. First, these assets enter reduce-only mode, where users can scale down margin positions or close them. Then they move to sell-only mode. After that stage, spot trading ends. By March 31, 2025, Kraken will convert any remaining user holdings to a stablecoin of comparable market value.

Margin positions related to Tether EURt, TerraClassic USD, PayPal USD, and TrueUSD face immediate impact, and Kraken believes these steps are necessary to avoid fines or operational issues under European Union (EU) crypto regulation. Stablecoin regulatory changes from MiCA reflect the EU’s goal to create a transparent landscape for digital currencies. Officials want more accountability for tokens that function as stable money substitutes. They want to ensure that stablecoin conversions do not bypass anti-money laundering rules or risk consumer funds. The reduce-only and sell-only trading modes will give traders time to adjust, but many wonder how MiCA regulations will affect stablecoins like Tether USDT for European investors in the long run.

Paolo Ardoino, Tether CTO, has voiced concern about Tether USDT restrictions in Europe. He suggests that MiCA fails to encourage a friendly framework for stablecoin adoption and that these rules deter certain crypto activities. He believes the new rules hurt retail investors in crypto who want quick access to digital assets. He also questions whether Europe’s stance will slow the region’s growth in crypto. Some users ask, are there alternatives to Tether USDT for EEA crypto traders under MiCA regulations? Exchanges that comply with MiCA might focus on MiCA-compliant tokens, though these tokens may offer fewer benefits than more established stablecoins.

Crypto.com exchange also plans to remove Tether USDT in the European market. Crypto.com removing Tether USDT follows similar steps and leaves users with fewer stablecoin options. It had already stopped supporting Tether in Europe in the past, yet it now plans to finish that process by the end of Q1 2025. This matches the approach taken by Kraken crypto exchange, which aims to protect its European operations. Both Kraken and Crypto.com acknowledge the need to meet MiCA stablecoin compliance deadlines to continue offering services without conflicts. Users who hold delisted stablecoins can either sell them or have them converted by the exchange before final deadlines.

What does reduce-only and sell-only mode mean for stablecoin trading on Kraken? Reduce-only mode lets users manage existing margin positions without creating new ones. It prevents an increase in exposure. Sell-only mode removes the option to deposit or open fresh trades with the stablecoins in question. This step-by-step guide to closing margin positions on Kraken before stablecoins are delisted suggests a final window for users to unwind positions. Enthusiasts who rely on stablecoins for quick trades see this as a major inconvenience, though it aims to meet regulatory compliance rules that the European Economic Area expects. Stablecoin delisting happens when an exchange decides an asset no longer meets local requirements. This can happen because of new legislation or changes in how authorities view digital currencies.

Some traders ask, how to prepare for Tether USDT delisting if you’re a Crypto.com user in Europe. The best approach involves paying attention to platform announcements, managing stablecoin holdings before the final date, and planning for possible stablecoin conversions to MiCA-compliant tokens. EU crypto market watchers note that these measures may shift the entire trading ecosystem. Many stablecoins help new crypto users avoid volatility. Without Tether USDT, Tether EURt, or TerraClassic USD, individuals might turn to alternative tokens that pass the new standards. Yet critics argue that these measures reduce choice for investors.

Markets in Crypto-Assets Regulation tries to avoid chaos by setting clear protocols for digital assets across European Union countries. Still, many wonder which tokens remain MiCA-compliant in the European crypto market after 2025. Some large assets will adapt. Others may depart. Paolo Ardoino thinks the environment looks restrictive for stablecoins, especially for retail users. He says that Europe does not want crypto and that regulation mostly limits access. Observers disagree about whether these rules will benefit consumers in the long term. Some believe strong regulation can foster trust. Others worry it will curb innovation and deter exchanges from offering popular stablecoins.

When will Kraken halt spot trading of PayPal USD, TrueUSD, Tether EURt, and TerraClassic USD? The spot trading halt timeline spreads across several weeks. First, on February 13, EEA users must reduce margin positions. On February 27, the stablecoins shift to sell-only. On March 17, the exchange closes any remaining margin positions. On March 24, Kraken will stop spot trading for those tokens at 7 a.m. EST and close all open orders. By March 31, user holdings that remain in these stablecoins convert into an approved alternative stablecoin with equal market value. Some people ask, what happens to my stablecoins after March 31, 2025, on Kraken? The answer is that those holdings become something else, likely one that is MiCA-compliant.

MiCA-compliant tokens include any digital assets that fulfill new reporting and reserve requirements set by the European Union. While regulators try to keep funds safe, certain Tether USDT restrictions frustrate longtime crypto users. They believe Tether holds a vital spot in daily trading. The changes raise the question, how restrictive is the European Union’s stance on stablecoins according to Tether CTO Paolo Ardoino? He sees these measures as harmful, with potential consequences for the region’s competitiveness. Mark Greenberg and others at Kraken note that the exchange wants to comply with these measures to continue operations without legal problems. They also claim these steps will provide an exceptional trading experience for EEA customers in the future, despite tighter controls.

Stablecoin regulatory changes extend beyond Kraken and Crypto.com. Several smaller exchanges may review their offerings as more rules arise. The crypto community continues to debate if stablecoin delisting is the right approach or if authorities should find a friendlier way to protect investors. Still, the reduce-only and sell-only trading modes appear as the immediate plan to address MiCA’s requirements. Each exchange must keep user funds safe while preventing regulatory troubles. Many longtime crypto users think the EU crypto market will adjust, though it may take time for new stablecoins to fill the gap. Developers could create innovative tokens that meet MiCA’s strict guidelines and deliver the stability that Tether USDT once offered.

European investors remain watchful. They see MiCA stablecoin compliance deadlines as a major milestone. Some speculate that Europe’s rules may motivate other regions to release their own guidelines. If so, this trend could expand, with stablecoin delisting becoming more frequent across international exchanges. Enthusiasts still hope that stablecoins will thrive if authorities implement balanced policies. For now, EEA traders and retail investors must prepare for these changes by monitoring platforms and moving assets before final deadlines. The crypto landscape will keep evolving, and the full impact of these rules on Tether USDT, Tether EURt, TerraClassic USD, PayPal USD, and TrueUSD remains a point of interest for anyone following MiCA and the global crypto market.

Europe’s crypto landscape has changed with the introduction of the Markets in Crypto-Assets framework, or MiCA. This set of EU crypto regulations governs stablecoins, other digital assets, and related activities. It calls for more transparent reserve mandates and stricter oversight of exchanges, known in many places as CEXs, to protect investors and encourage healthy growth in the crypto asset market. Under these rules, stablecoin issuers must keep certain fiat reserves in banks within the European Union. Issuers must also abide by volume or transaction caps that the European Securities and Markets Authority, often called ESMA, sets. These limits seem designed to prevent stablecoins from becoming so large that they pose a risk to regular currencies. Many people wonder if these rules address real threats or if lawmakers are going too far. Though opinions differ, many agree that stablecoin providers must make big changes to operate in Europe.

Some observers note that stablecoins make up a small slice of the region’s M2 money supply, which measures the total amount of money circulating within an economy. That figure shows that stablecoins are minor compared to traditional currencies, yet officials remain cautious. One argument in support of MiCA is that a solid plan for controlling stablecoins could help prevent financial shocks that arise when a digital asset grows unchecked. Others say these rules could slow innovation, since stablecoin issuers must handle strict guidelines. This extra burden could lead some projects to withdraw from Europe, causing fewer crypto options for users. That scenario might give large players, such as Binance and Coinbase, a bigger share of the market if they can handle the cost of compliance. These giant crypto exchanges already have resources to meet regulatory demands and track volumes, which smaller issuers often lack. For many companies, the cost of compliance creates headaches, but ignoring the framework risks delisting stablecoins that do not measure up.

Delisting stablecoins will affect investors and traders. USDT, for instance, supports a high percentage of pairs on CEXs. If it disappears from platforms in the EU, traders could lose convenient pairings. Some might switch to other tokens that meet MiCA standards, but that transition can be tricky. A stablecoin must maintain proper fiat reserves and stay under ESMA’s volume caps to avoid issues. The rules also require stablecoin issuers to confirm that 60% of the assets backing the coin are in EU banks. That figure reduces the chance of a sudden collapse if the reserves exist in well-regulated institutions. The plan might bring stability, but it also places extra work on coin teams, which must track their banking situation in real time. Many smaller stablecoins feel pressure to either exit the EU or face a barrage of paperwork. A decline in stablecoin choices could lead to less liquidity for certain pairs on crypto exchanges, which in turn might frustrate traders who seek a variety of options.

These changes do not affect stablecoins alone. Other actors in the crypto sector must adjust as well. Wallet providers must ensure they can still support stablecoins that pass MiCA’s tests. Venture capital firms may see certain projects as more risky if they focus on algorithmic stablecoins or crypto-collateralized stablecoins, which now appear less viable within the EU. Algorithmic stablecoins in particular have lost favor after high-profile crashes in recent years, so many ended up leaving the market by choice or necessity. Crypto-collateralized stablecoins also face scrutiny because they use other crypto assets to keep their pegs, rather than reliable fiat reserves. By demanding that issuers keep real assets in the form of fiat currency, the EU aims to reduce the chance of a stablecoin collapsing or spiraling in a panic. Regulators want to avoid a repeat of past market events that undermined trust in digital assets.

MiCA’s rollout is a multi-step process, and officials plan to enforce different parts of the framework in phases. The final version is expected in 2025, which gives stablecoin issuers and exchanges time to prepare. ESMA and other agencies might grant a grace period so companies can shift their operations without facing immediate penalties. At the same time, there is no guarantee of leniency, and regulators have hinted that refusing to comply could lead to fines or orders to delist stablecoins. This tension pushes stablecoin teams to act quickly if they want access to Europe’s market. For many, the question is how to comply without sacrificing growth or opening themselves to risk. Setting up bank partnerships in the European Union can be slow, especially for smaller projects that lack the relationships or capital that major platforms enjoy.

Across the English Channel, the United Kingdom’s crypto laws have also caused challenges. Even though the UK left the EU, it remains important for crypto businesses. Binance, for example, built a new front-end for UK users and restricted access to certain services. Binance Academy is not available to British traders, who once relied on it for education. This decision highlights how local regulations can shape the user experience. While the UK has its own approach to the crypto asset market, the EU’s stance on stables reflects a broader trend in global oversight. Many governments want to harness the potential of crypto assets without giving them free rein. Some worry that certain rules limit competition and put unnecessary obstacles in the path of smaller players.

Exchanges known as CEXs must now decide whether to keep hosting stablecoins that may break MiCA rules. If they fail to delist them, these platforms risk legal trouble or fines. This forced delisting process can reshape the crypto market as fewer stablecoins are available. Losing top stablecoins disrupts trading pairs and can lower liquidity, which is vital for daily transactions. Traders might need to rely on less popular stablecoins that meet the reserve mandates or volume caps. That could increase volatility if a coin does not have enough backing. The market might also shift to alternative solutions, such as regulated Euro-based tokens or digital currencies that function within MiCA guidelines. Still, these new solutions must earn user trust. Many stablecoin users favor well-known tokens, so it is unclear how the transition will happen.

The cost of compliance grows each day as EU crypto regulations tighten. Teams must spend money on audits to confirm they keep enough fiat reserves. They must monitor trades across different regions to ensure they stay under ESMA’s limits. Some must hire compliance experts who understand the local banking system. This spending may not be possible for small startups, which could either merge with larger projects or leave the region. On the other hand, the MiCA framework might attract mainstream investors who like the added security of regulatory oversight. Large funds often avoid unregulated markets, but a structured set of rules could pull them in. A bigger pool of capital might bolster the crypto asset market, but it can also push out riskier innovations that some users enjoy.

Investor protection has become a common phrase in these discussions. Supporters of MiCA say clearer rules lower the chance of market manipulation. They believe that by controlling stablecoin volume and requiring proof of reserves, the EU ensures a safer space for retail traders and institutions. Critics respond that protection often comes at the price of slower growth. They view the limits on transaction volume as arbitrary and fear it might hamper the use of stablecoins in everyday commerce. If stablecoins cannot exceed a certain transaction amount, they may not work well for large businesses or mass payments. This scenario may keep crypto as a niche activity rather than a true competitor to traditional finance.

Many stablecoin issuers must also consider how MiCA may evolve in the years ahead. No one can say for sure how the final regulations will look in 2025, so they must stay flexible. Some issuers already explore ways to secure multiple banking relationships, spread reserves across several institutions, and collect compliance data in real time. They expect that as ESMA refines its guidelines, new forms of stablecoins may appear that address the existing problems. Hybrid stablecoins, for example, could hold both fiat and tokenized assets. Others might rely on partial collateral that satisfies regulators while allowing for some algorithmic elements. These efforts show how the industry can adapt, but they also require trial and error. When a stablecoin fails to hold its peg, it damages trust in the entire market.

Traders outside the EU keep a close eye on these developments. Global crypto businesses may attempt to align with MiCA standards if they consider Europe a key market. They might weigh the potential upsides of investor trust against the higher operating costs. If a stablecoin issuer can prove it meets strict oversight rules in the EU, that coin might gain credibility in other regions. On the flip side, if the EU’s strict stance leads to lower usage of stablecoins, then issuers might focus on Asia or the Americas, where regulations differ. This possibility underscores how a single jurisdiction’s rules can shape the global crypto scene.

The European Union hopes that an orderly approach to digital assets will spur steady growth, but it also risks limiting the presence of smaller or more experimental projects. Algorithmic stablecoins, which have already suffered from negative news, seem especially unwelcome. Crypto-collateralized stablecoins must show they can match the EU’s vision of real reserves. Investors who rely on stablecoin-based yields might find their favorite protocols unavailable if they cannot meet MiCA’s rules. This shift could lead to new DeFi solutions that fit inside the guidelines. Those solutions could offer stablecoins that have partial collateral, volume caps built into the protocol, and transparent banking arrangements.

Yet the cost of compliance remains a hurdle for many. Paying for audits, setting up regulated banking, and monitoring transaction volume all add to operational expenses. Large exchanges like Coinbase and Binance can spread these costs over millions of users, but smaller platforms may struggle. MiCA’s supporters argue that over time, these measures will stabilize the crypto market and attract more professional investors. They point to the slow acceptance of regulations in traditional finance, where rules often brought order and reduced fraud. Critics respond that crypto was meant to be open and accessible. They worry that too many restrictions will turn the market into a gated system controlled by a few large players, diminishing innovation and competition.

Many participants wait to see how ESMA enforces volume or transaction caps over the next few years. If these caps prove too restrictive, stablecoins might remain an afterthought in Europe’s payment system. If they are set at reasonable levels and enforced fairly, stablecoins could thrive within those boundaries. The same applies to strict reserve mandates. If the EU allows a variety of banks to hold stablecoin reserves, issuers may have more options. But if only a few institutions qualify, stablecoin teams might feel forced to partner with specific banks, creating bottlenecks. Observers also note that the EU’s approach can affect how other regions set their crypto policies. Countries that want to encourage blockchain might borrow ideas from MiCA or modify them. Others could reject them and take a lighter approach to attract crypto companies. This global puzzle continues to evolve.

The new EU crypto regulations highlight a desire to treat digital assets as mainstream financial instruments. Part of that plan involves placing stablecoins under the same level of scrutiny as bank offerings. A common belief holds that stablecoins function best when they are as reliable as traditional currencies. Proving that reliability means abiding by the guidelines ESMA sets. By doing so, the EU wants to prevent a crisis that spills into the broader financial system. The hope is that once stablecoin issuers adapt, users will benefit from more transparent backing, safe volume thresholds, and fewer surprises. The path there might be rocky, especially for smaller stablecoin creators. They may need to rework their collateral, partner with suitable banks, and show proof of compliance at every step. Each choice will shape how stablecoins develop in Europe and beyond. If these measures succeed, stablecoins could gain renewed respect as part of a regulated, thriving crypto asset market. If they fail, the crypto community could see a reduced range of stablecoin options and a possible drop in innovation. The journey continues as the MiCA framework moves forward.

The federal government is investigating the cryptocurrency company Tether for possible violations of anti-money-laundering rules and sanctions. Prosecutors at the Manhattan U.S. attorney’s office are looking into whether Tether has been used by third parties to fund illegal activities like the drug trade, terrorism, and hacking, or to launder proceeds from such activities. The Treasury Department is also considering actions due to concerns about Tether’s widespread use by individuals and groups sanctioned by the United States.

Tether, which issues the stablecoin tether, has become a matter of growing concern for federal regulators and law enforcement. Unlike more volatile cryptocurrencies, tether’s value is pegged to the U.S. dollar, making it an attractive option in places where the use of the dollar has been banned or restricted. This stablecoin is the world’s most traded cryptocurrency, with billions changing hands each day. Its prominence has raised questions about its role in financing illicit activities and its impact on national security.

Authorities worry that tether might be facilitating transactions for sanctioned groups, including terrorist organizations and arms dealers. There are concerns that Tether’s cryptocurrency could be used to bypass sanctions and finance activities that threaten national security. Tether has stated that it actively works with U.S. and international law enforcement to combat illicit activity and that suggesting it is involved in aiding criminals or sidestepping sanctions is unfounded.

The Justice Department began an investigation into Tether several years ago. Initially, the focus was on whether some of Tether’s backers committed bank fraud by using falsified documents to gain access to the global banking system. Tether has said it has no indication that the company is facing a broader investigation. “We work actively with U.S. and international law enforcement to combat illicit activity,” the company stated.

In response to regulatory scrutiny, Tether has stepped up efforts to control how its cryptocurrency is used. The company points out that the public nature of the blockchain ledger used to track tether transfers makes it unsuitable for criminality. This transparency enhances authorities’ ability to monitor and potentially seize assets from bad actors. Tether executives believe that the open ledger helps prevent the misuse of their stablecoin by illicit actors.

U.S. prosecutors have been active in taking on some of the crypto industry’s biggest players. For example, Binance, one of the largest cryptocurrency exchanges, has faced investigations related to anti-money-laundering compliance. Tether, too, has faced regulatory troubles in the past. Several years ago, it paid fines to resolve investigations by the Commodity Futures Trading Commission (CFTC) and the New York Attorney General. These investigations found that the company had misrepresented the assets that back its cryptocurrency.

Tether’s stablecoin plays a significant role in the cryptocurrency market. Its value pegged to the U.S. dollar makes it a vital tool for traders and investors who want to move quickly in and out of positions without the volatility associated with other cryptocurrencies. However, its prominence has also made it a target for regulatory scrutiny. Concerns over Tether’s asset backing and transparency have been ongoing topics among regulators and market participants.

Cantor Fitzgerald, a major brokerage firm, manages a portion of Tether’s reserve assets, including holdings in U.S. government securities. Tether is one of the world’s largest holders of U.S. Treasuries among private companies. Howard Lutnick, the chairman and chief executive of Cantor Fitzgerald, has been involved in discussions about cryptocurrency regulations. The relationship between Tether and established financial institutions highlights the growing intersection between traditional finance and the crypto industry.

The intersection of cryptocurrency and politics has become more pronounced. Some political figures have embraced cryptocurrencies, promising favorable rules to foster innovation in the sector. Others have expressed concerns about the potential risks, including the use of cryptocurrencies in illicit activities and their impact on financial stability. Discussions around making America the “crypto capital of the world” reflect the ongoing debate over how to regulate digital assets.

Tether has been working to enhance its compliance and surveillance capabilities. The company has announced partnerships with analytics firms like Chainalysis and TRM Labs to improve transaction monitoring. These efforts aim to prevent the misuse of tether by illicit actors and to ensure compliance with regulatory requirements. By expanding its surveillance and lobbying efforts, Tether seeks to address regulators’ concerns and demonstrate its commitment to lawful operations.

Recently, Tether reported that it had frozen a number of crypto wallets and recovered significant assets. The company has taken steps to prevent its platform from being used by sanctioned individuals and groups. In the past, there were instances where Tether was hesitant to freeze digital wallet addresses that authorities had blacklisted. However, the company now appears to be more proactive in cooperating with law enforcement. Freezing wallets and recovering assets show Tether’s efforts to combat illicit activities.

The use of stablecoins like tether has raised questions about their impact on the traditional financial system. Regulators are concerned about the potential risks to financial stability if these digital currencies are not properly backed or if they facilitate illicit activities. The transparency and regulatory compliance of stablecoin issuers are therefore under close scrutiny. Ensuring that stablecoins are adequately backed by reserve assets is a key concern for authorities.

The cryptocurrency industry continues to evolve rapidly, and companies like Tether are at the forefront of this transformation. The balance between innovation and regulation is delicate. Tether’s efforts to comply with regulations and prevent the misuse of its platform are critical to its future and to the broader acceptance of cryptocurrencies. The company’s actions may influence how regulators approach the entire stablecoin sector.

As federal investigators probe Tether, the outcome of these investigations could have significant implications for the cryptocurrency market. It highlights the importance of compliance with anti-money-laundering rules and sanctions regulations. The involvement of large financial firms like Cantor Fitzgerald underscores the interconnectedness of traditional finance and the crypto industry. A negative outcome could impact not only Tether but also other companies involved in the cryptocurrency space.

Tether’s role in the global financial system, especially given its large holdings in U.S. government securities, makes it a company of interest not just to regulators but also to policymakers. The company’s actions and the regulatory responses to them will likely shape the future of stablecoins and their place in the economy. Discussions about regulations may consider how to integrate stablecoins into the financial system without compromising security and compliance.

The federal investigation into Tether reflects broader concerns about the use of cryptocurrencies in illicit activities and the need for robust regulatory oversight. Tether’s response and its efforts to enhance compliance will be crucial in determining its path forward. The situation underscores the challenges and opportunities in the rapidly evolving world of cryptocurrencies. As authorities continue to monitor and regulate the industry, companies like Tether will play a pivotal role in shaping the future of digital finance.

VanEck, a well-known asset management company founded in 1955, has entered the venture capital investing world with a new $30 million fund. This early-stage fund focuses on fintech, digital assets, and artificial intelligence (AI) startups. By launching this fund, VanEck continues its tradition of innovation in global investment management.

The fund is led by Wyatt Lonergan and Juan Lopez, who previously headed Circle Ventures at Circle Internet Financial Ltd. At Circle Ventures, they invested over $50 million into more than 100 early-stage companies. Now at VanEck, they aim to support startups that are shaping the future of finance.

VanEck’s venture capital fund plans to invest in up to 35 early-stage companies, with investments of up to $1 million each. The fund has already made four unannounced investments. The focus is on startups utilizing stablecoins for fast settlements and payments, and those providing compliance solutions as traditional companies adopt blockchain technology.

Stablecoins have become a pillar of the crypto ecosystem, with a market cap of about $170 billion. They enable fast payments and allow traders to navigate market volatility. Companies like PayPal Holdings Inc. have launched their own stablecoins, recognizing the benefits of digital assets. Visa Inc. has introduced a platform for banks to issue stablecoins and tokenized deposits. Robinhood Markets Inc. and Revolut Ltd. are also considering launching their own stablecoins.

According to Lonergan, we are on the brink of a “Cambrian explosion of fintech products” because the infrastructure is ready. Startups leveraging stablecoins and blockchain technology are positioned to capitalize on this growth. They offer innovative solutions that cater to both consumers and businesses, enhancing the financial infrastructure.

Circle Internet Financial Ltd., the issuer of USDC (USD Coin), plays a significant role in the stablecoin market. USDC is the world’s second most popular stablecoin. Circle has confidentially submitted plans for an initial public offering (IPO) after a previous plan to go public through a special-purpose acquisition company (SPAC) was scrapped.

Founded by John C. van Eck, VanEck recognized the potential of international investing when most American investors focused on domestic markets. The firm gained prominence by offering one of the first U.S. mutual funds to provide access to foreign markets, targeting emerging economies. This early international focus set VanEck apart as a pioneer in global investment management.

In the 1960s and 1970s, when gold ownership was restricted in the United States, VanEck focused on gold-related investments. The firm launched the International Investors Gold Fund in 1968, offering investors exposure to gold mining equities. This innovative approach allowed investors to hedge against inflation and currency fluctuations.

Under the leadership of Jan van Eck, the founder’s son, the firm expanded into exchange-traded funds (ETFs) in the early 2000s. VanEck introduced the Market Vectors ETFs, later rebranded as VanEck Vectors ETFs. These funds focused on niche sectors like gold mining, emerging markets, and other commodities, providing targeted investment opportunities.

Today, VanEck offers a diverse range of investment products, including mutual funds, ETFs, and institutional accounts. The firm’s commitment to innovation and forward-thinking strategies continues to solidify its position as a leading asset management company.

Just as stablecoins have become essential in the crypto ecosystem, turtles play a crucial role in natural ecosystems. Turtles help maintain healthy seagrass beds and coral reefs, which support a diverse range of marine life. For example, green sea turtles graze on seagrass, preventing it from becoming overgrown and promoting its growth. This balance is vital for the survival of many marine species.

The role of turtles in maintaining ecological balance is similar to how startups contribute to the financial ecosystem. Just as turtles support their environment, startups utilizing blockchain technology and stablecoins support the financial infrastructure. They enable efficient transactions, compliance solutions, and the adoption of new technologies, fostering a robust and dynamic financial system.

Traditional companies are increasingly adopting blockchain technology, recognizing its benefits like enhanced security, transparency, and efficiency. This shift opens opportunities for startups to offer innovative solutions in compliance, payments, and financial services. As more companies integrate blockchain, the financial landscape is changing rapidly.

Startups utilizing stablecoins can provide fast settlements and payments, essential in today’s digital economy. These companies bridge the gap between traditional finance and the emerging digital asset space. By offering solutions that cater to both sectors, they enhance the overall financial infrastructure.

The term “Cambrian explosion” refers to a period in Earth’s history when a vast number of new life forms appeared. In finance, this analogy describes the rapid growth and diversification of fintech products. With the infrastructure ready, startups are developing innovative solutions using AI, blockchain, and digital assets. This growth is reshaping how financial services are delivered and consumed.

Beyond PayPal and Visa, other companies are exploring the stablecoin space. Robinhood and Revolut are considering launching their own stablecoins, recognizing the potential benefits of fast transactions and reduced volatility. This trend signifies a broader acceptance and integration of digital assets in mainstream finance.

VanEck’s launch of a $30 million crypto and AI venture fund marks a significant step in supporting fintech, digital assets, and AI startups. Led by industry veterans from Circle Ventures, the fund aims to invest in innovative early-stage companies that are shaping the future of finance. As traditional companies adopt blockchain technology and stablecoins become integral to the crypto ecosystem, the financial landscape is poised for significant growth. Just as turtles play a crucial role in maintaining ecological balance, these startups are essential in fostering a robust and dynamic financial ecosystem.

PayPal has made history by completing its first-ever business transaction using PYUSD, the company’s own stablecoin. On September 23, PayPal paid an invoice to Ernst & Young LLP using PYUSD through SAP’s digital currency hub. This platform allows payments to be made instantly, 24/7, without the delays that usually happen with traditional cross-border payments. The company did not share how much the payment was for, but this event is a major milestone for PayPal and its role in cryptocurrency for business.

PYUSD was launched last year and is pegged to the US dollar, meaning its value stays stable compared to more volatile cryptocurrencies. At the time of this transaction, PYUSD had a market cap of $700 million and is becoming more popular among businesses for faster, more reliable payments. The use of stablecoins like PYUSD is growing because it offers businesses a better way to make payments across borders without the need for third-party banks or payment processors, which can slow things down.

PayPal has been expanding its role in cryptocurrency, and this latest move proves that it is serious about leading the way in stablecoin adoption. The company believes that using PYUSD for business-to-business (B2B) transactions is a smart choice for financial leaders. In fact, Jose Fernandez da Ponte, PayPal’s senior vice president of blockchain, cryptocurrency, and digital currency, highlighted how stablecoins are especially helpful in business payments. By using PYUSD, companies can avoid the long wait times and risks that come with traditional cross-border payments.

The reason for this is that stablecoin payments can be settled almost instantly on the blockchain, which is a huge improvement over the usual methods that involve multiple intermediaries like banks and payment processors. These intermediaries often slow down the payment process and can increase the chances of something going wrong. With PYUSD, businesses get faster settlements, which means they can pay their international partners quickly and safely.

Countries that have very volatile currencies are also seeing the benefits of stablecoins for managing their business transactions. By using stablecoins like PYUSD, they can avoid the problems that come with unstable exchange rates. PayPal’s move to use PYUSD for its own transactions shows that the company is confident that stablecoins can solve many of the issues businesses face with cross-border payments.

Earlier this year, a payments platform called BVNK also made headlines when it allowed businesses to send US dollars through SWIFT and then convert them into stablecoins to pay partners around the world. This process cuts out the usual middlemen and speeds up transactions, similar to what PayPal is doing with PYUSD. It’s becoming clear that stablecoins are gaining momentum in the business world as a way to make global payments faster and easier.

In addition to using PYUSD for its own transactions, PayPal also announced that it will allow merchants to buy, hold, and sell cryptocurrency directly from their business accounts. This is a big deal because it opens the door for even more businesses to adopt digital currencies. By offering this service, PayPal is positioning itself as a major player in the world of cryptocurrency for business.

The company’s financial results reflect its success in this area. In the third quarter (Q3), PayPal reported $9.08 billion in revenue, which is a 12% increase compared to the same period last year. This growth is mainly driven by more people using PayPal for their payments and an increase in the volume of transactions. The company’s net income for Q3 was $1.64 billion, which translates to a net income margin of 18%. This shows that PayPal is not just growing, but it’s doing so profitably.

PayPal’s earnings per share (EPS) also grew in Q3, reaching $1.25 compared to $1.10 in the same period last year. This is a clear sign that the company’s business model is working, and it’s managing to keep costs under control even as it invests heavily in new technologies like cryptocurrency. PayPal’s operating expenses for the quarter were $6.56 billion, including $1.2 billion spent on research and development and $2.9 billion on general and administrative costs. Despite these high expenses, the company’s gross profit for the quarter was $2.52 billion, giving it a gross profit margin of 27.8%.

One of the key reasons for PayPal’s success is the increase in active accounts. The company now has 500 million active accounts, up from 480 million earlier this year. This growth in user engagement is helping to drive up the total payment volume (TPV) processed by PayPal. In Q3, the company processed $355 billion in payments, which is 10% higher than the same time last year. This increase in TPV shows that more people are using PayPal for their everyday transactions, and it also suggests that businesses are trusting PayPal to handle their payments on a larger scale.

This is especially important as PayPal continues to push for more adoption of PYUSD and other cryptocurrencies. With more businesses turning to digital currencies for their payments, PayPal is in a prime position to capitalize on this trend. The company is showing that stablecoins like PYUSD are not just a passing fad but a practical solution for businesses that want to streamline their payment processes and avoid the risks associated with traditional banking systems.

By making its first business transaction using PYUSD, PayPal has taken a significant step toward proving that stablecoins are ready for mainstream use in the business world. This move will likely encourage other companies to consider using stablecoins for their own transactions, especially as the benefits of faster, more secure payments become clearer.

Overall, PayPal’s decision to use PYUSD for B2B transactions shows that the company is committed to staying at the forefront of the cryptocurrency revolution. With its strong financial performance and increasing adoption of digital currencies, PayPal is well-positioned to lead the way in this space. As more businesses recognize the advantages of stablecoins like PYUSD, it’s likely that we’ll see even more companies following PayPal’s example and embracing digital currencies for their cross-border payments.

PayPal’s first stablecoin transaction using PYUSD marks a pivotal moment in the business world. With its focus on faster, safer, and more reliable payments, PayPal is helping to pave the way for broader adoption of stablecoins in business. As more companies look for better ways to handle their payments, PYUSD and other stablecoins are set to play a big role in transforming how businesses manage their financial transactions.

Stablecoins are becoming a major force in Asia’s cryptocurrency scene. Michael Gronager, the CEO and co-founder of Chainalysis, believes that stablecoins will drive institutional adoption in the region, even if regulators are not happy about it. In an interview at Token2049 in Singapore, he said that despite regulatory concerns, the use of stablecoins is on the rise.

What Are Stablecoins and Why Are They Important?

Stablecoins are crypto tokens whose value is tied to real-world assets like the U.S. dollar or gold. They underpin the crypto trading system by providing a stable store of value and a medium of exchange. Unlike other cryptocurrencies that can be highly volatile, stablecoins offer a fixed value, making them useful for everyday transactions.

“Two-thirds of all transaction volume on blockchains are stablecoins,” Gronager noted. This shows how significant stablecoins have become in the crypto trading system. They are not just for traders but are also being used by regular people for remittances and other financial activities.

Regulators’ Concerns Over Stablecoins

Even though stablecoins are gaining popularity, regulators have some level of concern. Many things need to be ironed out before stablecoins can be fully accepted by financial authorities. Gronager mentioned that banks are slow to adopt stablecoins because they have to talk to regulators, which can delay the process.

“Why hasn’t it happened yet? Because banks are slow. They talk to the regulator,” he explained. Regulators worry about issues like money laundering and financial stability, which is why they are cautious about stablecoins.

Japanese Banks Planning U.S. Dollar-Backed Stablecoins

In Japan, there is growing interest among banks to launch U.S. dollar-backed stablecoins. Last year, one or two banks expressed this desire, but now, according to Gronager, ten banks are interested. However, regulatory hurdles are causing delays.

Japanese banks see the potential of stablecoins in competing with traditional remittance services. By using stablecoins, they can offer faster and cheaper transactions, which is attractive to customers. But until regulators give the green light, these plans remain on hold.

Competition in Remittances from Stablecoins

Stablecoins are presenting growing competition in the remittance market. People who send money across borders are finding stablecoins to be a convenient option. They offer lower fees and faster transaction times compared to traditional banking methods.

Banks are starting to notice this trend and are considering how to adapt. If they don’t embrace stablecoins, they risk losing customers to crypto-based services. This adds pressure on financial institutions to innovate and possibly push regulators for clearer guidelines.

Global Crypto Adoption: Asia Leading the Way

Asia is dominating in terms of crypto adoption. According to a report by Chainalysis, five Asian countries are in the top ten of the Global Adoption Index. India and Nigeria are leading in grassroots crypto adoption, with Indonesia climbing to the third spot as the fastest-growing country.

More users in the region have leaped into cryptocurrency than elsewhere. This shows a strong interest and willingness to embrace new financial technologies in Asia. The high number of crypto users per capita indicates that people are looking for alternatives to traditional financial systems.

U.S. Influence in the Crypto Industry

Despite Asia’s dominance in adoption, the United States remains the most influential region in the crypto industry. The U.S. ranks fourth in the Chainalysis report, but it’s where the big trading volumes come from. The crypto economy looks to institutions like the U.S. Congress and the Securities and Exchange Commission (SEC) for major signals.

“The real volume of crypto is tied to countries like the U.S. and others,” Gronager said. The U.S. has a significant impact because of its large financial markets and regulatory decisions that can affect the global crypto landscape.

Crypto Users Per Capita: India vs. U.S.

When it comes to crypto users per capita, countries like India have higher numbers than the U.S. Gronager pointed out that more average people in India are holding crypto compared to those in the U.S. This suggests that cryptocurrency is more integrated into everyday life in some countries.

In the U.S., while there is significant investment in crypto, it might not be as widespread among the general population. This difference highlights the varying levels of crypto adoption around the world.

Impact of U.S. Presidential Election on Crypto

There has been much discussion about how the U.S. presidential election might impact the crypto industry. However, Gronager believes that the election isn’t a big deal for crypto. “It won’t matter much,” he said, predicting that whether Donald Trump or Kamala Harris wins, getting past the election will be healthy for everyone.

Despite crypto influencers focusing on candidates’ positions, the industry is expected to continue evolving regardless of the election outcome. Regulatory policies might shift, but the overall trajectory of crypto adoption is likely to stay on course.

Financial Assets Soaring Due to Liquidity and Money Supply

On September 24, financial assets soared to record levels. The S&P 500 reached a record high of 5,735, and gold prices climbed to $2,670 an ounce. Gold has increased by 30% year-to-date, making 2024 the best-performing year for gold this century.

But what is driving these continual rallies in financial markets? A closer look reveals that liquidity and money supply are key factors. Central bank policies have significantly contributed to injecting liquidity into the global economy.

Central Bank Policies and Global Liquidity

As of September 25, the combined balance sheets of the top 15 central banks worldwide exceeded $31 trillion. This level was last seen in April 2024. The figure has been rising since July, reflecting substantial monetary stimulus in response to economic challenges and uncertainties.

China’s commitment to substantial monetary easing, combined with the U.S. Federal Reserve’s aggressive 50 basis point rate cut, has further fueled market momentum. The CME FedWatch Tool predicts a 60% chance of another 50 basis point cut at the November 7 meeting, which would lower the fed funds rate range to 4.25-4.50%.

M2 Money Supply and Asset Price Appreciation

Another key indicator of liquidity is the M2 money supply. This includes physical currency in circulation, savings and time deposits, and money market mutual funds. According to Trading Economics data, the M2 money supply has shown consistent month-on-month growth since February 2024.

In August alone, the M2 money supply increased by nearly 1% month-on-month. This ongoing monetary expansion has been crucial in supporting asset prices. There is a strong correlation between the S&P 500 and the M2 money supply, with both moving in tandem over the past five years.

Bitcoin’s Growth Compared to Traditional Assets

The compound annual growth rate (CAGR) of the M2 money supply has been 7%, while the S&P 500 has achieved a CAGR of 14% over the past five years. However, bitcoin has outperformed both with an impressive CAGR of 50% during the same period.

Despite its volatility, bitcoin’s higher growth rate reflects its increasing prominence as an asset class. It often benefits from the same liquidity dynamics that drive traditional markets. Investors are seeing bitcoin as a potential hedge against inflation and as a high-growth asset.

Liquidity as the Key Driver of Asset Performance

Central banks’ expansionary policies, combined with a rising money supply, are fueling asset price appreciation across the board. Whether it’s gold, the S&P 500, or bitcoin, the correlation with monetary measures like M2 highlights how liquidity remains a key driver of asset performance in today’s economy.

As long as central banks continue to provide support, financial markets may well continue to push higher. However, the sustainability of this trend remains a question for the future. Some experts worry that too much liquidity could lead to asset bubbles or inflation.

Sustainability of Current Market Trends

While the current market trends are positive, there are questions about their sustainability. Relying heavily on central bank policies and increased money supply may not be a long-term solution. Investors and policymakers alike are watching closely to see how these factors will impact the global economy in the coming years.

Stablecoins and liquidity are playing significant roles in the financial markets today. From driving institutional adoption in Asia to influencing asset prices worldwide, these factors are shaping the future of finance.

PYUSD and Its Market Success

PayPal’s stablecoin, PayPal USD (PYUSD), has reached a major milestone by surpassing $1 billion in market capitalization. This achievement, according to CoinMarketCap, shows the growing interest in stablecoins that are regulated and backed by the US dollar. PYUSD, which was launched in 2023, is pegged 1:1 to the US dollar and is issued by Paxos Trust Company, a US-regulated crypto custodian.

The success of PYUSD highlights PayPal’s efforts to be a significant player in the digital currency world. As the stablecoin market expands, more people are seeing the benefits of using dollar-backed digital currencies for everyday transactions and investments.

The Competitive Landscape of Stablecoins

PYUSD enters a competitive market already dominated by other stablecoins like Tether’s USDT and Circle’s USD Coin (USDC). According to CoinMarketCap, USDT and USDC have market capitalizations of about $118 billion and $35 billion, respectively. These numbers dwarf PYUSD’s $1 billion market cap, showing that PayPal has a long way to go to catch up with these established giants.

Despite the competition, PayPal’s president and CEO, Dan Schulman, believes that stablecoins like PYUSD have an essential role in the future of digital currencies. He stated in 2023, “The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the US dollar.” This statement underscores the importance of stablecoins as a bridge between traditional and digital finance.

Integration with Ethereum and Web3 Applications

One of the key features of PYUSD is its compatibility with Ethereum as an ERC-20 token. This makes it the only stablecoin that is fully integrated into PayPal’s payment systems. This integration is crucial because it allows PYUSD to be used by a vast and growing network of developers, wallets, and Web3 applications. The ability to seamlessly connect with these platforms makes PYUSD a versatile tool in the digital economy.

PayPal has made it easy for cryptocurrency exchanges to onboard PYUSD, expanding its utility even further. This means that users can easily trade, store, and use PYUSD across various platforms, making it a convenient option for those who want to be part of the digital currency world.

Expansion to the Solana Blockchain

In May, PayPal took another step to broaden PYUSD’s reach by launching it on the Solana blockchain. This move was made in collaboration with Crypto.com, Phantom, and Paxos. The goal was to make it easier for users to access the Solana network and take advantage of its high-speed, low-cost transactions. By expanding PYUSD to Solana, PayPal has positioned its stablecoin as a more flexible and accessible option for users who are involved in different parts of the crypto ecosystem.

This expansion is part of PayPal’s broader strategy to integrate PYUSD into the larger crypto world. By partnering with different platforms and blockchains, PayPal is ensuring that PYUSD can be used in a variety of ways, whether for trading, payments, or investments.

Partnerships with MoonPay and Polymarket

PayPal has also partnered with Web3 infrastructure provider MoonPay, which allows users to purchase cryptocurrencies using their PayPal accounts. This partnership makes it easier for people to buy and use digital currencies without needing to go through complicated processes. MoonPay’s integration with PayPal is a significant step in making digital currencies more accessible to everyday users.

Additionally, in July, PayPal extended this partnership to enable on-ramping to the crypto betting platform Polymarket. This move shows PayPal’s commitment to expanding the use cases for PYUSD and making it a more versatile tool in the crypto world. By enabling on-ramping to platforms like Polymarket, PayPal is providing more opportunities for users to engage with digital currencies in various ways.

Challenges and Future Outlook

While PYUSD has made significant strides, it still faces challenges in competing with other stablecoins like USDT and USDC. For instance, Coinbase, which has an institutional custody arm, encourages users to hold stablecoins like USDC by offering an annual percentage yield (APY) of around 5.2%. This incentive makes USDC an attractive option for investors who are looking to earn interest on their digital assets.

Moreover, Coinbase holds an equity stake in Circle, the issuer of USDC, which further strengthens its position in the stablecoin market. These factors make it difficult for PYUSD to compete directly with USDC, especially among investors who are looking for stable returns.

However, PayPal’s efforts to integrate PYUSD into the broader crypto ecosystem show that the company is serious about making its stablecoin a key player in the market. By continuing to innovate and expand PYUSD’s use cases, PayPal has the potential to increase its market share and become a more significant player in the stablecoin space.

PayPal’s PYUSD stablecoin reaching a $1 billion market cap is a significant achievement, but it is just the beginning. With strong competition from established stablecoins like USDT and USDC, PayPal will need to continue expanding PYUSD’s capabilities and partnerships to stay competitive. The integration with Ethereum, expansion to Solana, and partnerships with MoonPay and Polymarket are all steps in the right direction.

As the digital currency world continues to grow, PYUSD’s success will depend on how well it can meet the needs of users and compete with other stablecoins. PayPal’s commitment to innovation and integration suggests that PYUSD could become a more prominent player in the future of digital finance.

Coinbase Introduces Euro to EURC Conversion and New Trading Pairs

Starting on August 28, 2024, Coinbase, a well-known American cryptocurrency exchange and publicly traded company (NASDAQ: COIN), will enable direct conversions between the fiat euro (EUR) and the euro-pegged stablecoin EURC. This conversion will happen at a one-to-one ratio, meaning every euro can be converted to one EURC stablecoin. Similar to USDC, which is tied to the value of the United States dollar, EURC is pegged to the value of the euro.

The Rise of EURC and MiCA Compliance

Coinbase has confirmed that the EURC stablecoin is fully compliant with the European Union’s new Markets in Crypto Assets (MiCA) regulation. MiCA is a significant regulatory framework that governs digital assets across Europe, ensuring that stablecoins like EURC adhere to strict guidelines. This compliance gives EURC a strong legal standing in the European market, making it a reliable option for those looking to trade or invest in euro-pegged cryptocurrencies.

The introduction of EURC conversions on Coinbase comes at a time when euro-pegged stablecoins are gaining more attention. While dollar-pegged stablecoins, such as USDC and Tether, dominate the global stablecoin market, EUR-pegged stablecoins are emerging as strong contenders, particularly in Europe. In fact, euro-pegged stablecoins make up 92% of all non-USD stablecoins on the Ethereum blockchain, showcasing their growing importance in the crypto world.

No-Fee Conversions on Coinbase Advanced

One of the key benefits of this new conversion feature on Coinbase is that it comes with no associated fees. This means that users can convert their fiat euros into EURC stablecoins without worrying about additional costs. The fee-free conversion is available on Coinbase Advanced, a platform designed for more experienced traders who want greater control over their transactions.

In addition to enabling the EUR-to-EURC conversion, Coinbase will also introduce a new EURC-USDC order book on August 29, 2024. This new trading pair will allow users to trade EURC for USDC and vice versa, providing more flexibility for those who hold both euro and dollar-pegged stablecoins. At the same time, Coinbase will retire its existing EURC-EUR and EURC-USD order books, streamlining the trading experience and making it easier for users to navigate the platform.

“These changes are designed to enable the most efficient conversion and trading between fiat and stablecoins,” Coinbase stated. By simplifying the trading process and introducing new pairs, Coinbase aims to attract more users to its platform and solidify its position as a leading cryptocurrency exchange in Europe.

EURC Challenges USD Stablecoin Dominance

While USD-pegged stablecoins currently dominate the stablecoin market, euro-pegged stablecoins like EURC are starting to challenge this dominance. According to recent data, euro-pegged stablecoins have reached an all-time high in terms of euro-denominated crypto transactions. This growth is largely driven by the introduction of regulatory frameworks like MiCA, which provide a clearer path for euro stablecoins to thrive in the European market.

For example, Patrick Hansen, Director of Strategy and Policy at Circle, recently shared data highlighting the rise of euro-pegged stablecoins. According to Hansen, euro stablecoins now account for 1.1% of all EUR-denominated crypto transactions, a significant milestone for the industry. This trend suggests that EURC and other euro-pegged stablecoins could play a bigger role in the global stablecoin market moving forward.

However, not everyone is optimistic about the future of euro-pegged stablecoins. Tether CEO Paolo Ardoino has expressed concerns that MiCA’s requirements could make EU-licensed stablecoins more vulnerable and riskier. Ardoino believes that the regulatory burdens imposed by MiCA could hinder the growth of euro-pegged stablecoins, making them less competitive compared to their USD counterparts.

The Growing Importance of Stablecoins in Traditional Finance

Stablecoins, whether pegged to the dollar or euro, are becoming increasingly important in both the cryptocurrency and traditional finance sectors. For instance, PayPal’s stablecoin PYUSD has experienced massive growth on the Solana blockchain. In July, Solana-based PYUSD stablecoins saw a 230% increase in their total circulating supply, reaching nearly $252 million. This growth highlights the growing acceptance of stablecoins by traditional financial services giants, further solidifying their role in the global economy.

Similarly, Ripple Labs Inc is preparing to launch its own USD-pegged stablecoin, RLUSD. Ripple recently launched a website for RLUSD, marking a significant milestone for the stablecoin. However, there are concerns that RLUSD might attract scrutiny from the US Securities and Exchange Commission (SEC), which has been closely monitoring Ripple’s activities. Despite these challenges, the XRP community remains hopeful that the launch of RLUSD could help resolve Ripple’s ongoing legal issues with the SEC.

The Future of EURC and the Stablecoin Market

As Coinbase continues to expand its offerings and introduce new features like EURC conversions and trading pairs, it is clear that the exchange is positioning itself as a major player in the stablecoin market. By embracing regulatory compliance through MiCA and offering innovative trading options, Coinbase is making it easier for users to engage with euro-pegged stablecoins and diversify their portfolios.

The introduction of EURC on Coinbase could also pave the way for other euro-pegged stablecoins to gain traction in the market. As more users become familiar with the benefits of EURC and similar assets, the demand for euro-pegged stablecoins is likely to increase, potentially challenging the dominance of USD-pegged stablecoins in the long run.

Coinbase’s move to enable euro-to-EURC conversions and introduce a new EURC-USDC order book marks a significant step forward for the cryptocurrency exchange. With no fees for conversions and a focus on regulatory compliance, Coinbase is making it easier than ever for users to trade and invest in euro-pegged stablecoins. As the stablecoin market continues to evolve, EURC and other euro-pegged assets could play a crucial role in shaping the future of digital finance in Europe and beyond.

Tether to Launch New Stablecoin Pegged to UAE’s Dirham

Tether, the largest company in the digital asset industry, recently announced its plans to launch a new stablecoin that will be pegged to the United Arab Emirates Dirham (AED). This move comes as the cryptocurrency market continues to grow, and as Tether looks to tap into the demand for Gulf currencies. The new stablecoin aims to offer an alternative to the U.S. dollar while benefiting from the UAE’s growing role in the global crypto industry.

What Are Stablecoins?

Stablecoins are a type of cryptocurrency designed to maintain a stable value by being backed by traditional currencies such as the U.S. dollar, euro, or, in this case, the UAE dirham. They have gained popularity as a way to make payments and as a tool for traders who want to buy and sell cryptocurrencies like Bitcoin without using the traditional banking system. Tether already operates the world’s largest stablecoin, USDT, which is pegged to the U.S. dollar and is widely used in the cryptocurrency market.

Why a Dirham-Pegged Stablecoin?

According to Paolo Ardoino, CEO of Tether, the main purpose of launching a dirham-pegged stablecoin is to create more options for people who want alternatives to the U.S. dollar. Ardoino mentioned during an event in Dubai that the dirham is becoming a preferred currency for many as global trade patterns change. He also highlighted the stability and safety of the UAE, making the dirham an attractive option for people outside of the country who are looking for a secure currency.

The UAE dirham, like most Gulf currencies, is already pegged to the U.S. dollar, which gives it a strong foundation. However, the dirham-pegged stablecoin will offer additional benefits, especially for international trade and remittances, by reducing transaction fees and providing a hedge against currency fluctuations.

Tether’s Role in the Cryptocurrency Market

Tether has a significant presence in the cryptocurrency market, with its USDT token making up the bulk of the stablecoin market. According to data from CoinGecko, Tether’s dollar-pegged token accounts for about $117 billion of the $169 billion stablecoin market. This makes Tether a key player in the digital asset space.

In addition to USDT, Tether also offers stablecoins pegged to other major currencies, including the euro, Chinese yuan, Mexican peso, and even gold. The introduction of a dirham-pegged stablecoin is a strategic move for Tether as it continues to expand its offerings and tap into emerging markets like the UAE.

The UAE’s Growing Crypto Industry

The UAE has been making significant strides to become a global hub for the cryptocurrency industry. With cities like Dubai and Abu Dhabi leading the way, the country has quickly enabled cryptocurrency payments in areas such as real estate and school fees. This has helped boost the adoption of digital assets and increased transaction volumes across the country.

The UAE has also developed virtual asset regulations that provide a clear framework for companies operating in the cryptocurrency space. This has made the country an attractive destination for crypto businesses and investors looking to take advantage of the favorable regulatory environment.

Collaboration with Phoenix Group and Green Acorn Investment

Tether is not working alone on this project. The new dirham-pegged stablecoin will be launched in collaboration with Abu Dhabi-listed cryptomining and blockchain conglomerate Phoenix Group and with support from investment firm Green Acorn Investment. This partnership is expected to play a crucial role in the success of the new stablecoin, especially given the expertise of Phoenix Group in the blockchain and crypto space.

Phoenix Group’s Co-Founder and CEO, Seyedmohammad Alizadehfard, expressed his excitement about the collaboration with Tether. He emphasized that the dirham-pegged stablecoin has the potential to transform the digital economy across the region, particularly as Abu Dhabi continues to adopt progressive policies towards blockchain and digital assets.

Ensuring Stability Through UAE-Based Reserves

One of the key features of Tether’s new stablecoin is that it will be fully backed by liquid UAE-based reserves. This means that every dirham-pegged token will be supported by actual assets held in reserve, ensuring the stability and reliability of the stablecoin. Tether has a strong track record of maintaining reserve standards, which has helped build confidence in its stablecoins.

By backing the dirham-pegged stablecoin with UAE-based reserves, Tether aims to provide users with a secure and trustworthy digital representation of the AED. This is particularly important for businesses and individuals who rely on stablecoins for international trade, remittances, and other financial transactions.

Reducing Risks and Streamlining Transactions

The new dirham-pegged stablecoin is expected to offer several benefits for users. First, it will help streamline international trade and remittances by reducing transaction fees and making cross-border payments more efficient. This is especially important in regions where traditional banking systems can be slow and expensive.

Second, the stablecoin will provide a hedge against currency fluctuations, which can be a significant risk in international trade. By pegging the stablecoin to the UAE dirham, Tether aims to offer users a stable and reliable currency option that can help protect against volatile exchange rates.

Addressing Regulatory Concerns

While stablecoins offer many benefits, they have also raised concerns among regulators. Authorities worry that the growing reserves of stablecoins could pose risks to the broader financial system. For example, if a large number of stablecoin holders suddenly decide to exchange their tokens for traditional currencies, it could lead to a rapid outflow of funds from the crypto market.

To address these concerns, Tether has been working closely with regulators, including the UAE Central Bank, to ensure that the new stablecoin complies with all necessary regulations. Tether plans to secure licensing under the UAE Central Bank’s newly introduced Payment Token Services Regulation, making this a pioneering effort in the region.

Tether’s Focus on Emerging Markets

Tether’s recent growth has been driven by its use as an alternative to the U.S. dollar in emerging markets. In countries like Argentina, Brazil, Turkey, Vietnam, and parts of Africa, the U.S. dollar can sometimes be in short supply, making stablecoins an attractive option. By offering stablecoins pegged to local currencies, Tether is helping to meet the demand for reliable digital assets in these regions.

The introduction of a dirham-pegged stablecoin is part of Tether’s broader strategy to expand its presence in emerging markets. By providing users with a stable and secure currency option, Tether is helping to drive the adoption of digital assets and support economic growth in these regions.

Tether’s launch of a new stablecoin pegged to the UAE dirham is a significant development in the cryptocurrency market. With the support of Phoenix Group and Green Acorn Investment, Tether is well-positioned to tap into the growing demand for Gulf currencies and offer a valuable alternative to the U.S. dollar. The new stablecoin is expected to play a key role in the UAE’s growing crypto industry, offering benefits for international trade, remittances, and more.

Tether Expands USDT to Aptos Blockchain

Tether, the company behind the popular stablecoin USDT, has announced that it has launched USDT on the Aptos blockchain. This move is aimed at reducing transaction costs for users and making digital currency more accessible. With this expansion, Tether is taking advantage of the Aptos blockchain’s scalability and speed to offer users ultra-low transaction fees, making it more cost-effective to use USDT in various scenarios.

Why Tether Chose Aptos Blockchain

Tether’s decision to expand USDT to the Aptos blockchain is based on the network’s ability to provide low transaction costs and high-speed processing. Aptos has become known for its scalability, meaning it can handle a large number of transactions quickly and efficiently. This makes it a great choice for Tether as it seeks to improve the usability of its digital currency.

By integrating USDT on Aptos, Tether aims to lower the gas fees that users typically pay when sending digital currencies. Gas fees are essentially transaction fees paid to blockchain networks to process and confirm transactions. On many blockchains, these fees can be quite high, making it expensive for users to send small amounts of money, also known as microtransactions. However, on the Aptos blockchain, these fees are incredibly low—sometimes costing just a fraction of a penny. This makes it possible for Tether to support a wide range of use cases, from small payments to large-scale business operations.

The Benefits of Lower Fees for Users

One of the main benefits of launching USDT on the Aptos blockchain is the lower transaction fees. Lower fees make it easier for people to use USDT for everyday transactions, like buying goods and services or sending money to family and friends. This is especially important in regions where access to traditional banking services is limited, and people rely on digital currencies for their financial needs.

With lower fees, Tether also hopes to make USDT more attractive to businesses. Companies that need to process a large number of transactions, such as e-commerce platforms or financial services providers, can benefit from the cost savings offered by the Aptos blockchain. This could encourage more businesses to start using USDT for payments, further increasing its adoption.

Aptos Blockchain Growth

Aptos has seen significant growth in recent months, making it a key player in the blockchain space. According to a press release, the number of daily active users (DAU) on the Aptos network has increased from 96,000 in January to 170,000 in July. This growth has been driven by the network’s ability to handle a high volume of transactions efficiently.

In May 2024, Aptos set a new record by processing 157 million transactions in a single day. This shows just how scalable and reliable the network is, making it an ideal choice for Tether’s USDT. By expanding to Aptos, Tether is positioning itself to take advantage of this growth and reach more users.

Tether’s Vision for Digital Currency

Tether’s expansion to the Aptos blockchain is part of a larger vision to make digital currencies more accessible and functional for people around the world. Paolo Ardoino, the CEO of Tether, has emphasized that the company is committed to improving the usability of digital currencies by offering faster and cheaper transactions. By partnering with Aptos, Tether is working to make this vision a reality.

Tether believes that by reducing transaction fees, more people will be able to use USDT in their daily lives. This could help increase the adoption of digital currencies, especially in regions where traditional financial services are not readily available. Tether’s goal is to create a world where digital currencies are as easy to use as cash, and expanding USDT to the Aptos blockchain is a big step in that direction.

Nansen Partners with Aptos

In addition to Tether’s integration with Aptos, the blockchain has also partnered with Nansen, a leading blockchain analytics provider. Nansen’s partnership with Aptos is aimed at bringing advanced onchain analytics and data to the Aptos ecosystem. This will help users and investors better understand the trends and activities within the Aptos blockchain.

Nansen’s tools will allow crypto teams to delve deeper into the Aptos ecosystem and make more informed decisions. This partnership is expected to further boost the growth of Aptos by providing valuable insights to users and businesses. As Aptos continues to grow, the integration of Nansen’s analytics will play a key role in helping the network reach its full potential.

Tether vs. Celsius Lawsuit

While Tether is making moves to expand its reach and improve the usability of USDT, it is also dealing with legal challenges. On August 10, 2024, the defunct cryptocurrency exchange Celsius filed a lawsuit against Tether. The lawsuit claims that Tether misappropriated assets and is seeking $3.5 billion in Bitcoin returns, damages, and legal fees.

According to the lawsuit, Celsius had loaned Tether a specific amount of USDT during its bankruptcy proceedings. In exchange, Celsius provided Tether with 39,543.42 Bitcoin as collateral. Celsius claims that Tether sold the Bitcoin at a price that nearly covered the debt, without giving Celsius the chance to provide additional collateral. The outcome of this lawsuit could have significant implications for both Tether and the broader cryptocurrency industry.

What’s Next for Tether?

Tether’s expansion of USDT to the Aptos blockchain marks an important step in making digital currencies more accessible and cost-effective. With ultra-low transaction fees and the scalability of the Aptos network, Tether aims to improve the usability of USDT for both individuals and businesses. As the Aptos blockchain continues to grow and gain traction, Tether’s integration could play a key role in driving further adoption of digital currencies.

At the same time, Tether faces challenges, such as the ongoing lawsuit with Celsius. However, its focus on innovation and partnerships, like the one with Aptos, shows that Tether is committed to staying at the forefront of the digital currency space. With its sights set on making digital currencies more accessible and functional, Tether’s expansion to the Aptos blockchain is just the beginning of its efforts to revolutionize the financial landscape.