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Weekly Global Stablecoin & CBDC Update
This Week's Stories (So Far)
Rain, a New York-based stablecoin payments infrastructure company, has secured $250 million in Series C funding, elevating its valuation to $1.95 billion. The round was led by ICONIQ Capital with participation from Sapphire Ventures, Dragonfly, Bessemer Venture Partners, Galaxy Ventures, FirstMark, Lightspeed, Norwest, and Endeavor Catalyst. This funding brings Rain’s total capital raised to over $338 million in just 10 months. The platform specializes in enabling global institutions to issue and manage stablecoin-powered payment cards, facilitating more than $3 billion in annualized transactions for over 200 partners, including Western Union and Nuvei. CEO Farooq Malik highlighted that active card numbers surged 30x and annualized payment volume expanded 38x over the past year, demonstrating strong institutional adoption of stablecoin infrastructure.
Key Takeaways:
- Rain’s valuation reached $1.95B, representing a 17x increase from March 2025
- The company processes over $3 billion in annualized transactions across 150+ countries for 200+ institutional partners
- Active card base grew 30x year-over-year; annualized payment volume expanded 38x
- Funding will support expansion into new markets and growth of enterprise customer base
- Infrastructure enables seamless integration of stablecoins with Visa’s global payment network
Why It Matters:
- Institutional Momentum: Accelerating institutional adoption signals stablecoins are moving from niche assets to mainstream payment infrastructure
- Capital Influx: $338M total funding demonstrates investor confidence in stablecoin-based payments as the future of cross-border commerce
- Real-World Utility: The 30x-38x growth metrics prove stablecoins are solving actual payment problems at scale
- Market Integration: Integration with Visa network reduces friction and enables stablecoins to function in everyday commerce globally
- Emerging Market Access: Rain’s reach across 150+ countries positions stablecoins as critical infrastructure for financial inclusion
PhonePe Payment Gateway announced the launch of “PhonePe PG Bolt,” a device tokenization feature enabling secure, one-click checkout for Visa and Mastercard transactions. Using advanced device tokenization, users can securely tokenize credit and debit cards once on the PhonePe app and use saved credentials across all PhonePe-integrated merchants without manual re-entry. The solution eliminates CVV requirements for repeat transactions, reduces checkout steps, and maintains users within merchants’ apps throughout payment processing. PhonePe reports that active cards surged significantly and payment volume expanded substantially. The feature applies PhonePe’s native SDK integration, offering merchants customizable interfaces, higher transaction success rates, reduced drop-offs, and brand consistency within their ecosystem.
Key Takeaways:
- Device tokenization enables secure one-click payments across all PhonePe-integrated merchants
- CVV elimination for repeat transactions reduces friction while maintaining PCI DSS security compliance
- Native SDK integration keeps users within merchant apps, reducing redirection-based fraud and abandonment
- Higher success rates and faster checkout speeds driven by reduced manual data entry and fewer technical handoffs
- Customizable merchant interface maintains brand consistency while improving user experience
Why It Matters:
- User Experience Evolution: One-click checkout removes major friction points in digital payment adoption, especially in emerging markets
- India’s Payment Leadership: Builds on India’s 228 billion annual transactions (world’s highest), advancing from high-volume to high-friction-reduction
- Merchant Enablement: Tokenization technology allows smaller merchants to access enterprise-grade payment security without infrastructure costs
- Fraud Reduction: CVV elimination and device-bound tokens reduce card fraud exposure while maintaining consumer protection standards
- Emerging Market Implication: Device tokenization unlocks faster payments for Tier-2/3 populations less familiar with traditional card security
Coinbase Global Inc., the largest US cryptocurrency exchange, escalated pressure on Senate lawmakers on January 11 by signaling the company may reconsider support for the Digital Asset Market Structure Clarity Act if final legislation includes restrictions on stablecoin rewards beyond enhanced disclosure requirements. With the Senate Banking Committee markup scheduled for January 15 (the next day), Coinbase’s threat to withdraw endorsement represents critical negotiating leverage. The exchange positioned rewards programs as a consumer protection mechanism essential to its competitive positioning against traditional banking, arguing that restrictions would fundamentally undermine the bill’s utility for advancing digital asset payments infrastructure. Industry insiders characterized Coinbase’s stance as reflecting broader crypto sector concern that late-stage amendments reopening settled GENIUS Act compromises threaten regulatory clarity narrative. The threat carries weight because industry support is viewed as essential for moderate senators who fear constituent backlash if perceived as harmful to fintech innovation.
Key Takeaways:
- Industry withdrawal of support represents credible threat: senators need crypto sector backing to justify votes to conservative constituents and donors
- Coinbase’s timing (January 11, day before markup) maximizes leverage by forcing last-minute negotiation on text amendments
- Rewards restrictions represent existential competitive issue for exchanges: restriction would eliminate key customer attraction mechanism vs. traditional finance
- Disclosure-only approach (Coinbase’s red line) validates rewards as legitimate business practice while adding regulatory transparency
- This dynamic demonstrates that industry veto power over legislation can constrain legislative outcomes independent of Democratic-Republican divisions
Why It Matters:
- Coinbase’s withdrawal threat could prevent markup from advancing if company follows through, stalling legislative momentum critical for January-February window before midterms dominate calendar
- Industry leverage directly contradicts earlier narrative that regulatory clarity has been achieved; Coinbase’s positioning suggests key issues remain negotiated rather than settled
- Disclosure-only approach may represent compromise position enabling both industry support and Democratic compliance concerns
- This threat signals Senate will face difficult choice: either accommodate industry demands or risk losing bill passage momentum through industry opposition
- When combined with competing Agriculture Committee markup same day, industry divisions could further fragment legislative process
Bitwise Asset Management filed applications with the US Securities and Exchange Commission for 11 new exchange-traded funds providing regulated institutional exposure to major altcoins including DeFi protocols (Aave, Uniswap), privacy coins (Zcash), AI-focused tokens (Bittensor), and infrastructure tokens (Solana, Near, Sui, Ethereum Name Service, Starknet). Each fund employs a hybrid strategy allocating 60% of assets to direct token ownership (acquired through crypto exchanges or over-the-counter transactions) and 40% to exchange-traded products and derivatives, with minimum 80% notional exposure to the targeted asset. The filings indicate anticipated launch around March 16, 2026, pending SEC approval, with listings on NYSE Arca and ticker symbols to be determined. Bitwise’s applications represent the largest single-day submission for altcoin ETFs, following the firm’s successful 2025 conversions of spot Bitcoin and Ethereum ETFs, which achieved SEC approval within 45 days. Industry analysts estimate potential for billions in institutional capital inflows if approvals are granted, unlocking long-awaited institutional access to the altcoin ecosystem previously accessible only through unregulated crypto exchanges.
Key Takeaways:
- 11 ETFs simultaneously targeting diverse altcoin categories (DeFi, privacy, AI, infrastructure) represents industry effort to accelerate institutional adoption across altcoin ecosystem
- Hybrid structure (60/40 direct/ETP allocation) creatively addresses SEC concern about spot market depth by combining direct exposure with financial derivatives
- March 2026 anticipated launch (3 months out) compresses timeline relative to Bitcoin/Ethereum ETF approval process, suggesting SEC may use expedited review for proven asset categories
- Bitwise’s largest single-submission strategy demonstrates confidence in favorable regulatory environment under Trump administration
- Altcoin ETF approvals would unlock institutional capital currently unable to access altcoins due to regulatory uncertainty; potential $50-100B institutional reallocation estimated by some analysts
Why It Matters:
- Altcoin ETF approvals represent next frontier for institutional crypto adoption, extending beyond Bitcoin/Ethereum into application-layer tokens where network effects create long-term value
- March 2026 launch timeline creates near-term catalyst for altcoin price appreciation if approvals progress on schedule, boosting institutional portfolio inclusions
- Success of hybrid strategy may establish template for future altcoin ETFs from competitors (Grayscale, VanEck, 21Shares), accelerating institutional infrastructure buildout
- When combined with $2 trillion cumulative crypto ETF trading volume milestone, altcoin ETF approvals would validate extended bull case for broader digital asset ecosystem
- This filing demonstrates that despite Senate legislative uncertainty, regulatory agencies (SEC) proceeding independently on implementation, validating crypto infrastructure expansion across agencies
Two Senate committees confirmed January 15, 2026 markup dates for competing digital asset market structure bills, creating potential for legislative fragmentation and conflicting frameworks. Senate Banking Committee Chair Tim Scott (R-SC) scheduled markup for the Digital Asset Market Structure Clarity Act, while Senate Agriculture Committee Chair John Boozman (R-AR) finalized a competing market structure draft for same-day markup. The dual-committee approach reflects jurisdictional disagreements over crypto regulation: Agriculture Committee traditionally oversees derivatives (CFTC jurisdiction) while Banking Committee oversees banking and securities (SEC jurisdiction). Key unresolved issues include stablecoin rewards restrictions (Coinbase red line), DeFi developer liability standards, conflict-of-interest language on elected officials/families profiting from crypto, and bipartisan agency representation requirements. White House Crypto Czar David Sacks confirmed the January 2026 markup timeline in prior statements, signaling administration prioritization. However, Republican divisions (Kennedy, Tillis, Rounds hedged support in prior days) and Democratic demands (conflict-of-interest language triggered by World Liberty Financial bank charter filing) suggest compromises remain elusive heading into January 15 markups.
Key Takeaways:
- Dual-committee markups same day create fragmentation risk: if bills advance from each committee with conflicting provisions, Senate must reconcile in later process, delaying final passage
- Tim Scott’s “closing offer” pre-markup suggests lead negotiator believes January 15 represents inflection point; failure to reach consensus may delay to post-midterms 2027
- Agriculture Committee markup suggests derivatives-focused bill may compete with Banking Committee’s broader digital asset framework, creating jurisdictional uncertainty for stablecoin issuers
- Unresolved issues (rewards, DeFi liability, conflict-of-interest) suggest comprehensive compromise not yet achieved; late amendments likely during markup
- January 15 date creates only 5-month window for post-markup negotiations and full Senate floor vote before midterm elections dominates September-November calendar
Why It Matters:
- Dual markups same day compress decision-making and create media fragmentation; unclear which bill advances or if both proceed simultaneously, creating legislative uncertainty
- If markups proceed without consensus, competing frameworks must eventually reconcile, potentially triggering second round of difficult negotiations and amendments
- Agriculture Committee’s parallel effort suggests lawmakers concerned Banking Committee alone cannot resolve crypto jurisdictional questions, necessitating multi-committee approach
- Failure to advance bills January 15 virtually eliminates 2026 legislative window; next opportunity likely post-midterms in November-December, extending regulatory uncertainty through year-end
- January 15 represents critical decision point: either markup succeeds and bills advance, or legislative momentum stalls, fundamentally altering regulatory clarity timeline
US cryptocurrency exchange-traded funds (ETFs) and exchange-traded products (ETPs) reached a $2 trillion cumulative trading volume milestone in January 2026, just two years after initial spot Bitcoin and Ethereum ETF approvals in 2024. The achievement validates cryptocurrency infrastructure maturity as institutional investors increasingly access digital assets through regulated fund vehicles. During the week of January 6-12, 2026, institutional flows demonstrated resilience despite mixed macro signals: Bitcoin funds accumulated approximately $500 million in net inflows, while Ethereum funds experienced approximately $160 million in net outflows (profit-taking following late-2025 rally). Russia’s Sberbank issued Bitcoin-collateralized loans to Intelion Data (Bitcoin mining company), using a mining company’s BTC holdings as collateral, demonstrating emerging institutional acceptance of cryptocurrency as loan backing collateral. Market sentiment showed “little concern” over weekend reports of potential US military action in Venezuela, with Bitcoin and altcoins advancing on positive institutional inflows during early-week trading. A critical near-term catalyst: MSCI’s January 15 decision on whether to remove DAT-related stocks (companies holding crypto assets on balance sheets) from indices; market analysts expect advance reactions before the decision date.
Key Takeaways:
- $2 trillion cumulative trading volume in two years demonstrates institutional infrastructure has achieved scale and legitimacy; retail and institutional participants now routinely access crypto through ETF vehicles
- Bitcoin fund inflows ($500M weekly) vs. Ethereum fund outflows ($160M) suggest institutional portfolio rebalancing rather than conviction loss; higher Bitcoin allocation preference post-election
- Sberbank Bitcoin lending program validates cryptocurrency collateral acceptance among traditional banks, creating new institutional use case for mining company treasury management
- MSCI index decision (January 15) represents binary catalyst: inclusion of DAT stocks would accelerate institutional adoption through mandatory index fund allocations
- Mixed flows (Bitcoin positive, Ethereum negative) indicate institutional selectivity rather than broad crypto disinterest; capital flowing toward largest assets with established infrastructure
Why It Matters:
- $2 trillion trading volume establishes crypto ETFs as material asset class within institutional portfolios; trading activity levels comparable to traditional equity ETFs at scale
- Bitcoin-collateralized lending by traditional banks (Sberbank) validates cryptocurrency as institutional collateral equivalent to securities or commodities
- Weekly institutional flows demonstrate 2026 market structure remains positive for crypto; negative Ethereum flows appear tactical (profit-taking) rather than strategic (conviction loss)
- MSCI index decision January 15 could trigger multi-billion-dollar passive reallocation if DAT stocks included in indices
- When combined with Bitwise altcoin ETF filings and FDIC stablecoin framework, institutional infrastructure expansion accelerates across multiple asset categories simultaneously
Indian policy analysts raised questions on January 11 regarding India’s strategic positioning between competing global digital currency models: the US approach prohibiting CBDCs while permitting stablecoins, China’s interest-bearing digital yuan, and India’s parallel development of the digital rupee (e-rupee). The analysis highlights a fundamental policy dilemma: stablecoins represent dollar-denominated assets potentially draining capital reserves and limiting RBI monetary policy autonomy, while CBDCs enable government surveillance and control over domestic payments. India’s choice between embracing stablecoins (enabling international payments but surrendering currency control) or mandating domestic e-rupee adoption (preserving RBI authority but constraining innovation) mirrors broader global tensions between financial inclusion and state control. The article positions India’s decision as consequential for broader emerging-market digital currency strategy, with choices influencing SAARC region (South Asia) and potential Shanghai Cooperation Organization (SCO) alternatives to dollar-denominated payment infrastructure.
Key Takeaways:
- US prohibition of CBDCs while permitting stablecoins creates strategic opening for dollar-denominated assets to dominate Indian payments ecosystem, constraining RBI policy autonomy
- China’s interest-bearing e-CNY model (January 1 launch with 0.05% interest) provides alternative framework: government-issued CBDC with yield competitive against bank deposits
- India’s digital rupee (e-rupee) represents hybrid approach: state-controlled CBDC with RBI oversight, but constrained by international stablecoin competition
- Strategic choice between stablecoins vs. CBDC represents geopolitical positioning: stablecoin reliance signals alignment with US dollar hegemony; CBDC emphasis signals sovereignty and innovation
- India’s decision influences broader SAARC and SCO regional frameworks; stablecoin adoption by India would validate dollar-denominated approach across South Asia
Why It Matters:
- India’s CBDC vs. stablecoin choice carries geopolitical implications beyond financial inclusion; decision signals either acceptance or rejection of dollar-denominated digital currency dominance
- RBI’s current regulatory skepticism toward stablecoins reflects sovereignty concerns: unrestricted stablecoin adoption could circumvent capital controls and monetary policy transmission
- E-rupee competitive disadvantage vs. interest-bearing CBDCs (like China’s model) may force RBI to reconsider yield restrictions or face adoption friction
- Digital rupee’s limited adoption relative to international stablecoins suggests market preference for dollar-denominated assets; India must choose whether to accept or resist this dynamic
- Regional implications: if India embraces stablecoins, other SAARC economies likely follow; if India mandates e-rupee, regional fragmentation around national CBDCs likely results
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