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Weekly Global Stablecoin & CBDC Update
This Week's Stories (So Far)
Visa Direct has launched a pilot enabling corporate clients to prefund fiat-backed stablecoins for cross-border business payments. By integrating stablecoin wallets into its existing push-to-card and push-to-account rails, Visa aims to cut settlement times from days to minutes and reduce costs associated with correspondent banking. Early participants include two global payment service providers and three midsize banks, which will test euro- and dollar-pegged tokens. Visa’s API allows seamless conversion between fiat and stablecoin balances, with on-chain transparency and Visa’s fraud-monitoring overlay. The pilot seeks to validate both technical interoperability and regulatory compliance in jurisdictions across Europe and North America.
Key Takeaways:
- Corporate users can prefund stablecoin wallets via Visa Direct APIs.
- Settlement times targeted to drop from days to under 15 minutes.
- Pilot covers euro- and dollar-pegged tokens with fiat–crypto conversion.
- Visa’s fraud and compliance controls extend into on-chain transactions.
- Initial trials involve global PSPs and regional banks in EU/NA.
Why It Matters:
- Demonstrates mainstream payments network embracing stablecoins.
- May catalyse broader adoption of tokenised liquidity in trade finance.
- Offers banks a low-code path to digital-asset rails without full custody.
- Enhances transparency and auditability of cross-border flows.
- Signals regulatory comfort with hybrid fiat-stablecoin models.
A coalition of ten leading global banks including Bank of America, Deutsche Bank, Goldman Sachs, UBS, Citi, Barclays, TD Bank, Santander, BNP Paribas, and Mitsubishi UFJ is jointly assessing the feasibility of issuing a stablecoin pegged 1:1 to G7 currencies.This initiative aims to combine the advantages of blockchain-based settlement, such as near-instant finality and enhanced transparency, with robust regulatory and risk-management frameworks. The consortium’s initial focus is on evaluating market demand, interoperability with existing payment infrastructures, and compliance with anti-money-laundering (AML) and know-your-customer (KYC) standards. If pursued, such a bank-backed stablecoin could significantly expand digital-asset usage beyond crypto exchanges, facilitating cross-border trade and institutional liquidity management while preserving financial stability.
Key Takeaways:
- Ten major banks form a consortium to explore a G7-pegged stablecoin.
- Focus on public-blockchain issuance with 1:1 real-world currency backing.
- Aim to enhance competition and interoperability in digital-asset markets.
- Regulatory alignment and risk mitigation are central to the project.
- Preliminary phase; user adoption and technical integration still under review.
Why It Matters:
- Signals traditional finance’s commitment to blockchain and tokenized assets.
- Could lower cross-border settlement costs and speeds.
- May redefine liquidity management for institutional treasuries.
- Sets groundwork for standardized, regulated stablecoins.
- Influences central-bank policies on private digital currencies.
During a massive $19 billion liquidation event triggered by new China-tariff announcements, Ethena’s yield-bearing stablecoin, USDe, deviated from its 1:1 dollar peg, dropping to $0.65 on Binance, before swiftly recovering. Despite the flash-crash, Ethena Labs confirmed that USDe remained overcollateralized and that mint-and-redeem mechanisms functioned normally. The incident also caused Ethena’s governance token, ENA, to tumble up to 40% before stabilizing. Clear compensation policies for affected traders are under review. USDe’s underlying basis-trade strategy, offering a 5.5% yield via crypto collateral and futures, weathered this stress test without jeopardizing solvency.
Key Takeaways:
- USDe fell to $0.65 amid unprecedented $19B liquidations.
- Algorithmic basis-trade model restored peg quickly.
- Overcollateralization shielded holders from losses.
- Governance token ENA experienced a 40% flash drop.
- Binance to review affected accounts and compensation.
Why It Matters:
- Highlights systemic risks in yield-bearing stablecoins.
- Demonstrates resilience of overcollateralized, algorithmic models.
- Reinforces need for robust liquidity-management protocols.
- Sets benchmarks for compensation and transparency standards.
- Informs regulatory discourse on stablecoin stability requirements.
The U.S. Social Security Administration (SSA) has announced the discontinuation of paper-check disbursements, deploying its inaugural digital-payment systems for benefit recipients. Starting November 2025, millions of Social Security beneficiaries will transition to electronic fund transfers (EFTs) or direct-deposit alternatives, including prepaid debit cards and mobile-wallet provisions. The SSA cites faster delivery, reduced processing costs, and enhanced fraud protection as primary motivations. The rollout follows pilot programs in several states, which demonstrated a 75% reduction in lost or stolen payments and a 40% decrease in administrative overhead. Social Security’s shift aligns with federal goals to modernize payment infrastructures and promote financial inclusion among underserved populations.
Key Takeaways:
- Paper-check issuance ends; digital disbursements begin November 2025.
- Beneficiaries can choose EFT, prepaid debit, or mobile-wallet options.
- Pilot studies showed 75% fewer lost payments.
- Administrative costs dropped by 40% in pilot regions.
- Enhanced anti-fraud measures integrated into digital platforms.
Why It Matters:
- Marks major federal push toward end-to-end digital payments.
- Improves speed and reliability of social benefits delivery.
- Reduces government processing expenses significantly.
- Advances financial inclusion for underbanked beneficiaries.
- Lays groundwork for broader federal digital-payment services.
A European Central Bank simulation has found that a retail digital euro could prompt depositors to move as much as €700 billion from commercial banks into digital euro accounts during a bank run scenario. The ECB’s model assumes account holders view the digital euro as safer due to its sovereign backing, triggering a rapid flight-to-safety that would strain bank liquidity and potentially force some lenders into emergency funding or resolution. The ECB stressed the need for design features, such as holding limits and tiered remuneration, to mitigate sudden outflows. This analysis, provided to EU finance ministers, underscores the importance of carefully calibrating the digital euro’s operational framework.
Key Takeaways:
- ECB simulation indicates up to €700 billion could migrate to digital euro in a crisis.
- Sovereign backing makes digital euro more attractive than bank deposits.
- Banks facing large outflows may require emergency liquidity or resolution measures.
- Design options (holding caps, tiered interest) are critical to control runs.
- Findings presented to EU finance ministers to inform digital euro rollout.
Why It Matters:
- Highlights systemic risks of retail CBDC if not properly designed.
- Underlines urgency for safeguards to protect bank stability.
- Informs policymakers crafting legislation and technical specs.
- May influence the adoption timeline and feature set of the digital euro.
- Sets precedent for other central banks planning retail CBDCs.
The European Commission announced that the EU’s Markets in Crypto-Assets (MiCA) framework sufficiently addresses risks posed by stablecoins, despite calls from the ECB for stricter safeguards. In response to a letter from crypto associations, the Commission affirmed that MiCA’s provisions on reserve requirements, governance, and transparency create a balanced regulatory environment. The ECB had warned of potential runs under a multi-issuance stablecoin model, where tokens issued outside the EU could be redeemed domestically, straining EU-based reserves. Stablecoin issuers countered that robust reserve management prevents such scenarios. The Commission plans to issue clarifying guidance on multi-issuance soon but sees no need for major legislative changes.
Key Takeaways:
- MiCA deemed robust for stablecoin risk mitigation.
- ECB concerns focus on runs under multi-issuance models.
- Crypto associations requested clarity on multi-issuance in MiCA.
- Commission will publish guidance rather than amend MiCA.
- Emphasizes balance between innovation and financial stability.
Why It Matters:
- Provides regulatory certainty to stablecoin issuers in the EU.
- Reduces likelihood of sudden policy shifts that could hamper growth.
- Signals a pro-innovation stance while maintaining safety.
- Offers guidance on cross-border issuance, aiding market participants.
- Shapes global stablecoin regulatory norms through EU example.
Visa announced a stablecoin prefunding pilot for its Visa Direct platform at Sibos 2025, enabling businesses to prefund cross-border payments with stablecoins instead of traditional fiat currencies. The pilot addresses inefficiencies in cross-border payments that often take days to complete, forcing businesses to deposit funds well in advance. With stablecoin settlement occurring in minutes, businesses can deploy capital more efficiently while recipients continue receiving payments in their local currency. The program targets banks, remitters, and financial institutions, with limited availability expected by April 2026.
Key Takeaways:
- Stablecoin prefunding reduces cross-border payment settlement from days to minutes
- Recipients maintain ability to receive payments in local currency despite stablecoin prefunding
- Pilot targets financial institutions with limited availability planned for April 2026
- Initiative aims to unlock business liquidity and modernize treasury management
Why It Matters:
- Represents major payment network’s commitment to integrating blockchain technology into traditional infrastructure
- Could significantly reduce costs and improve speed for international business payments
- Positions Visa competitively against emerging blockchain-based payment alternatives
- Validates stablecoins as practical solution for institutional cross-border payment challenges
The global stablecoin market capitalization crossed $300 billion for the first time in history during the week of October 7-13, 2025, representing a 46.8% increase since the beginning of the year. This surge signals growing institutional adoption and capital influx into cryptocurrency markets, driven largely by financial institutions embracing stablecoin infrastructure. The milestone comes as JPMorgan predicts Bitcoin could reach $165,000 by year-end and Citigroup raises Ethereum price targets to $4,500, while institutional investors continue increasing crypto allocations.
Key Takeaways:
- Stablecoin market cap crosses historic $300 billion threshold with 46.8% year-to-date growth
- Growth driven primarily by institutional adoption and financial institution integration
- Milestone coincides with JPMorgan’s $165,000 Bitcoin and Citi’s $4,500 Ethereum price targets
- Market expansion reflects broader cryptocurrency ecosystem maturation and institutional acceptance
Why It Matters:
- Validates stablecoins as foundational infrastructure for global digital payment systems
- Demonstrates sustained growth despite regulatory challenges and market volatility
- Positions stablecoin market for projected growth toward $1-2 trillion by decade’s end
- Reflects institutional confidence in blockchain-based payment alternatives to traditional systems
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