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Weekly Global Stablecoin & CBDC Update
This Week's Stories (So Far)
Chinese tech giants including Alibaba-backed Ant Group and e-commerce giant JD.com halted plans to issue stablecoins in Hong Kong after Beijing raised concerns about private sector-controlled currencies, according to Financial Times reporting on October 18, 2025. Companies received instructions from the People’s Bank of China and Cyberspace Administration of China not to proceed with their stablecoin initiatives. PBOC officials advised against participating in Hong Kong’s initial stablecoin rollout over concerns about allowing tech groups and brokerages to issue any type of currency. The directive came despite Hong Kong’s May passage of stablecoin legislation establishing a licensing regime for fiat-referenced stablecoin issuers.
Key Takeaways:
- Ant Group and JD.com suspend stablecoin plans following direct intervention from PBOC and CAC
- Beijing concerns focus on private sector control of currency issuance threatening state monetary sovereignty
- Directive extends to brokerages and think tanks instructed to stop promoting stablecoins
- State-backed digital yuan remains China’s only approved digital currency initiative
Why It Matters:
- Demonstrates China’s prioritization of central bank control over private digital currency innovation
- Could significantly impact Hong Kong’s ambitions to become a leading stablecoin hub
- Highlights tension between Hong Kong’s regulatory autonomy and Beijing’s monetary policy control
- Validates concerns about regulatory arbitrage between Hong Kong and mainland China
NYDIG Global Head of Research Greg Cipolaro declared on October 18, 2025, that stablecoins like USDC, USDT, and USDe are not truly pegged to the U.S. dollar but rather float based on market supply and demand dynamics. Following the recent $500 billion crypto market sell-off, supposedly stable assets exhibited significant price fluctuations, with Ethena’s USDe dropping as low as $0.65 on Binance. Cipolaro argues that the perceived stability results from arbitrage and market dynamics rather than fixed pegs, and that users fundamentally misunderstand the real risks associated with these assets.
Key Takeaways:
- NYDIG research challenges fundamental assumption that stablecoins maintain fixed $1 peg
- Recent market stress revealed stablecoin price fluctuations with USDe dropping to $0.65 on Binance
- Perceived stability attributed to arbitrage and market trading dynamics rather than guaranteed pegs
- Analysis suggests widespread misunderstanding of stablecoin mechanics and associated risks among users
Why It Matters:
- Challenges marketing claims and user perceptions about stablecoin stability and safety
- Could influence regulatory approaches to stablecoin risk disclosures and consumer protections
- Validates concerns about stablecoin behavior during extreme market stress conditions
- May impact institutional adoption if stablecoins perceived as less stable than advertised
Sentinel Global founder Leon Kranz warned on October 18, 2025, that stablecoins function as “Central Business Digital Currencies” that mirror the control mechanisms of government-issued CBDCs. Speaking as the stablecoin market surpassed $300 billion, Kranz cautioned that despite their private issuance, major stablecoins remain subject to centralized control and government influence. U.S. Representative Marjorie Taylor Greene has characterized the GENIUS Act as a “CBDC Trojan Horse,” warning it could enable programmable money subject to centralized control. Kranz emphasized that technology remains neutral, with outcomes depending on who controls it and how it’s deployed.
Key Takeaways:
- Stablecoins characterized as “Central Business Digital Currencies” mirroring CBDC control mechanisms
- $300 billion stablecoin market faces criticism despite growth from regulatory clarity
- GENIUS Act characterized by critics as enabling backdoor centralized digital currency control
- Technology neutrality emphasized with outcomes dependent on control structures and deployment
Why It Matters:
- Highlights ideological divide between stablecoin advocates and critics over centralization concerns
- Could influence public perception of stablecoins as alternative to rather than extension of state control
- Validates concerns about regulatory frameworks potentially enabling excessive oversight
- Demonstrates growing political polarization around digital currency policy and implementation
Cryptocurrency fundraising accelerated sharply in October 2025, with 27 blockchain and digital asset companies securing more than $2.5 billion according to DefiLlama data. This brings total 2025 crypto funding to over $19 billion, already exceeding 2024’s total by more than $9 billion and demonstrating renewed investor confidence in the digital asset industry. Polymarket led October fundraising with a remarkable $2 billion strategic investment from Intercontinental Exchange valuing the prediction market platform at $9 billion post-money. Investors at Galaxy Ventures and Codebase now project total 2025 fundraising will surpass $25 billion by year-end, marking the strongest year since 2021’s bull market.
Key Takeaways:
- October brings $2.5 billion from 27 deals pushing 2025 total past $19 billion, exceeding 2024 by $9 billion
- Polymarket’s $2 billion ICE investment at $9 billion valuation represents largest single crypto funding round
- Projections increased to $25 billion year-end total demonstrating robust venture and institutional interest
- 2025 on track to be strongest fundraising year since 2021 bull market peak
Why It Matters:
- Validates sustained institutional confidence in crypto despite market volatility and regulatory uncertainty
- Demonstrates Wall Street’s increasing involvement with tokenized financial instruments through ICE investment
- Positions 2025 as inflection point for institutional capital allocation toward blockchain technology
- Could accelerate mainstream adoption through well-funded infrastructure development and applications
Pakistan’s State Bank is exploring the development of a digital rupee (e-Rupee) as a strategic response to growing crypto dollarisation and stablecoin adoption within the country, according to Dawn newspaper reporting on October 20, 2025. The initiative aims to provide a state-controlled digital currency alternative to private cryptocurrencies and dollar-pegged stablecoins, which have gained traction among Pakistani citizens seeking to preserve wealth amid currency volatility. The digital rupee project reflects broader concerns among emerging market central banks about losing monetary sovereignty to private digital currencies.
Key Takeaways:
- State Bank of Pakistan exploring digital rupee development to counter crypto dollarisation trends
- Initiative responds to growing citizen adoption of dollar-pegged stablecoins for wealth preservation
- Project reflects emerging market concerns about monetary sovereignty erosion from private cryptocurrencies
- Digital currency positioned as state-controlled alternative to decentralized crypto adoption
Why It Matters:
- Demonstrates how currency instability drives emerging market CBDC development urgency
- Highlights competition between state-issued and private digital currencies for monetary control
- Could influence other South Asian countries facing similar crypto dollarisation challenges
- Validates concerns that stablecoins threaten emerging market central bank policy effectiveness
Bitcoin is experiencing its worst October performance since 2015, declining 5% month-to-date to trade near $107,000 by October 19, 2025, contradicting the cryptocurrency’s historical “Uptober” seasonal pattern. The historically strongest month for Bitcoin, which averages 19.8% gains, has been overwhelmed by macro risks including the U.S.-China tariff standoff, weak liquidity, and leveraged liquidations totaling $1.2 billion. Bitcoin’s drop below $107,000 triggered massive position liquidations, with Ethereum, Solana, and BNB each declining 4-7% on the week.
Key Takeaways:
- Bitcoin down 5% in October 2025, worst performance since 2015, breaking “Uptober” seasonal trend
- Historical October average of 19.8% gains overwhelmed by macro headwinds and tariff tensions
- $1.2 billion in leveraged liquidations triggered by Bitcoin’s decline below $107,000 support level
- Major altcoins including Ethereum, Solana, and BNB post 4-7% weekly declines amid selling pressure
Why It Matters:
- Demonstrates cryptocurrency market’s continued sensitivity to macroeconomic and geopolitical factors
- Validates concerns about leverage risks in crypto markets during volatility periods
- Could influence year-end market sentiment if Bitcoin fails to recover traditional October strength
- Highlights disconnect between seasonal patterns and fundamental macro drivers in crypto markets
ACI Worldwide and BitPay have formed a strategic alliance to integrate cryptocurrency and stablecoin processing into ACI’s Payments Orchestration Platform. The collaboration enables merchants and PSPs to accept, hold, and settle digital assets alongside fiat through a unified interface. Over half of global retailers surveyed by ACI and Payments Dive are considering crypto payments. The integrated solution supports peer-to-peer, mobile, and cross-border transactions, offering capabilities for treasury management, supplier payments, and settlement optimization. The platform aims to increase payment success rates, streamline reconciliation, and unlock new revenue streams.
Key Takeaways:
- ACI’s Payments Orchestration Platform now supports BitPay’s crypto and stablecoin rails.
- Merchants gain end-to-end capabilities: acceptance, custody, settlement in digital assets.
- Integration addresses both retail and B2B payment scenarios.
- Survey by ACI and Payments Dive finds >50% of retailers exploring crypto payments.
- Joint solution enhances fraud controls, reconciliation, and cross-border settlement.
Why It Matters:
- Bridges traditional payment systems and blockchain-based assets, fostering adoption.
- Provides merchants with flexible rails to leverage stablecoins for treasury and payables.
- Reflects growing merchant demand for digital currency options at checkout.
- Demonstrates continued convergence of traditional payments and digital finance.
- May drive broader industry standards for crypto payment integration.
The International Monetary Fund and global regulators have sounded the alarm over the rapid expansion of stablecoins, warning that inconsistent rules across jurisdictions could trigger a systemic shock comparable to an explosive “Hindenburg moment.” With stablecoin assets projected to reach $2 trillion by 2028, fragmentation in regulatory frameworks poses a serious risk to financial stability. The IMF’s latest Global Financial Stability Report highlights that stablecoins’ high exposure to short-term debt instruments could spark fire-sale dynamics, spilling over into bank deposits and sovereign bond markets. The U.S. is leading the charge on federal stablecoin regulation under the GENIUS Act, while the UK and EU work to finalize their own regimes next year.
Key Takeaways:
- Global stablecoin supply could hit $2 trillion by 2028, driven by institutional adoption.
- Around 80% of Tether’s reserves are held in short-term debt and cash-like instruments.
- Disparate regulatory approaches risk cross-border regulatory arbitrage and contagion.
- The IMF cautions that stablecoin runs could precipitate forced selling in broader markets.
- The U.S. GENIUS Act sets a federal framework; the UK aims to finalize legislation in 2026.
Why It Matters:
- Ensuring harmonized rules is critical to prevent a market-wide crisis emanating from stablecoins.
- Stablecoins’ integration into mainstream finance amplifies both innovation and systemic vulnerabilities.
- Policymakers must coordinate globally to mitigate risks of regulatory arbitrage.
- Strong regulation can bolster confidence in stablecoins as reliable digital-payment instruments.
- Conversely, regulatory fragmentation could undermine the evolution of cross-border digital payments.
According to the Nikkei, Japan’s five largest banks, including Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho, plan to collaborate on launching a yen-pegged stablecoin by early 2026. The joint initiative aims to bolster cross-border payments efficiency and reinforce confidence in digital settlements among corporate clients. Scheduled to leverage existing banking rails and the Bank of Japan’s CBDC platform for settlement, the project represents a significant fusion of private-sector innovation with central-bank infrastructure. This consortium seeks to pre-empt foreign stablecoins and ensure Japan’s financial ecosystem retains strategic control over digital-currency use cases.
Key Takeaways:
- Japan’s five largest banks to co-issue a yen-pegged stablecoin in early 2026.
- The project will integrate with the BOJ’s CBDC network for final settlement.
- Objective: accelerate corporate cross-border payments and reduce transaction costs.
- A coordinated industry approach underscores Japan’s proactive stance on digital finance.
- The stablecoin will complement, not compete with, the BOJ’s forthcoming digital yen.
Why It Matters:
- Japan’s banking sector moves to fortify its digital-currency ecosystem against external entrants.
- Integration with the BOJ’s CBDC platform illustrates public-private collaboration on digital payments.
- The yen-stablecoin could set a template for other jurisdictions balancing CBDC and private tokens.
- Corporate clients stand to benefit from faster, lower-cost international transactions.
- Success here may accelerate adoption of digital payments in Japanese and regional markets.
The H1 2025 Payment Pulse Report by Phi Commerce highlights loyalty programs as a key driver in India’s digital payments ecosystem. According to the report, 68 percent of consumers engage more frequently with merchants offering rewards, fueling a 27 percent year-on-year increase in wallet-based transactions. Wallet providers are integrating gamification, tiered benefits, and real-time offers to boost user retention amid intense competition. The study also notes a shift toward co-branded loyalty cards issued by fintech banks and platforms, with wallet adoption rising in nonmetro regions. Emerging trends include the use of AI-powered personalization to tailor rewards and the expansion of loyalty points into financial services, such as instant credit and micro-investments.
Key Takeaways:
- 68 percent of Indian consumers transact more with reward-enabled merchants.
- Wallet transactions grew 27 percent year-on-year in H1 2025.
- Gamification and tiered benefits are central to loyalty program design.
- Co-branded fintech bank wallets gain traction in smaller cities.
- AI personalization is enhancing reward relevancy and engagement.
Why It Matters:
- Loyalty is shifting from marketing to a core payments value driver.
- Enhances wallet stickiness and competitive differentiation in India’s crowded fintech space.
- Promotes financial inclusion by extending digital payments into lower-penetration regions.
- Positions loyalty points as an entry point for broader financial service adoption.
- Signals a maturing digital payments market that combines rewards with embedded finance.
Australia’s government announced that, beginning October 20, 2025, all pension disbursements will be processed via digital payments, moving away from paper checks. The overhaul applies to hourly and age-based pension schemes, incorporating real-time transfers to bank accounts, mobile wallets, and prepaid digital cards. Beneficiaries can choose their preferred digital channel through a new online portal, which includes multilingual support and assisted registration for vulnerable groups. The reform aims to reduce administrative costs by AUD 120 million annually, cut payment delays, and improve transparency. A pilot phase conducted earlier this year in Queensland and Tasmania reported a 95 percent adoption rate and a 30 percent reduction in transaction errors, showcasing the system’s robustness ahead of national rollout.
Key Takeaways:
- All pension payments will transition to digital channels from October 20, 2025.
- Options include bank transfers, mobile wallets, and prepaid cards.
- New portal offers assisted onboarding and multilingual support.
- Expected cost savings of AUD 120 million per year.
- Pilot achieved 95 percent digital uptake and 30 percent fewer errors.
Why It Matters:
- Modernizes welfare delivery, improving speed and reliability of payments.
- Reduces government administrative overhead and error rates.
- Enhances financial inclusion through diversified digital channels.
- Sets a precedent for other social welfare digitalization efforts globally.
- Demonstrates digital payments’ role in public sector efficiency and transparency.
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