TickerTape
Weekly Global Stablecoin & CBDC Update
Reuters analyzes the growing systemic risk posed by Tether’s USDT, now about 184 billion dollars in circulation and more than twice the size of its nearest rival. While Tether has maintained its peg through multiple market shocks, its latest attestation shows a thinner equity buffer and a rising share of riskier assets such as bitcoin, gold and opaque secured loans. Equity fell from 7.1 billion to roughly 6.3 billion dollars even as liabilities grew, meaning a relatively small loss on reserves could render the firm under-collateralized. At the same time, “cash‑like” assets such as T‑bills have declined as a share of reserves. The piece argues that USDT has become so embedded in crypto trading and liquidity that a serious de‑pegging would create cascading dysfunction across digital asset markets and could spill over into U.S. Treasuries.
Key Takeaways:
- USDT supply has grown to about 184 billion dollars, cementing its position as the dominant dollar stablecoin.
- Tether’s equity buffer fell from 7.1 to roughly 6.3 billion dollars, now only about 3.3% of assets.
- The reserve mix has shifted away from pure cash/T‑bills toward bitcoin, gold and secured loans, raising portfolio risk.
- A simultaneous drawdown in crypto, gold and loan exposures could wipe out Tether’s capital cushion.
- Despite these metrics, USDT still trades very close to 1 dollar and shows no obvious stress in secondary markets.
Why It Matters:
- USDT is core settlement “plumbing” for crypto; failure would disrupt pricing and liquidity across exchanges globally.
- A Tether run could force fire‑sales of U.S. Treasuries and other assets, creating channels into traditional markets.
- The analysis strengthens arguments for bank‑like regulation and transparency standards for large global stablecoins.
- It underscores concentration risk: one off‑shore issuer anchors a market now exceeding 300 billion dollars in stablecoins.
- The piece will likely feed into U.S. and EU debates on reserve composition rules and caps for non‑cash investments.
ECB Governing Council member Piero Cipollone told the Italian parliament that implementing the digital euro could cost European banks between 4 and 6 billion euros over four years, roughly 3% of their annual IT budget. The ECB itself expects around 1.3 billion euros in setup costs plus about 300 million in operating expenditures, as it moves toward a potential 2029 launch of a retail CBDC. Banks would need to build front‑end wallets and integrate back‑end systems but would be allowed to recover costs through merchant fees, without paying network fees to the ECB. The central bank is now selecting institutions for the pilot phase and awaits final EU legislation to authorize issuance. The digital euro is framed as a way to preserve public money in an increasingly digital economy, enhance payment competition and reduce dependence on non‑EU providers.
Key Takeaways:
- ECB pegs bank implementation costs at 4–6 billion euros over four years, about 3% of annual IT spend.
- ECB expects 1.3 billion euros in setup costs plus around 300 million in operating costs for its own infrastructure.
- Banks will supply wallets and interfaces and can recoup costs via merchant fees, with no ECB network fees.
- Pilot‑phase participants are being selected ahead of a possible 2029 roll‑out.
- The digital euro is positioned as a response to private digital payment dominance and as a tool to safeguard monetary sovereignty.
Why It Matters:
- Quantifies, for the first time, the expected direct cost burden of retail CBDC on commercial banks.
- Highlights a political trade‑off: banks face new capex/opex but may gain a new revenue line in merchant CBDC fees.
- Signals ECB confidence that legislative approval and pilot progress are on track despite industry pushback.
- Reinforces that CBDC design is being tightly coupled with competition policy and strategic autonomy objectives.
- Provides a benchmark other central banks can use when modeling CBDC cost‑benefit trade‑offs.
India reports that the National Highways Authority of India (NHAI) is considering phasing out cash payments at all national highway toll plazas from 1 April 2026, shifting entirely to digital payments through FASTag and UPI. The move builds on FASTag penetration above 98%, which has already transformed toll collection, with most transactions now made via RFID tags on vehicles. Authorities argue that residual cash use causes congestion, longer queues and more disputes at fee plazas. Under current rules, vehicles without valid FASTag must pay double the toll in cash, while UPI users pay 1.25 times the normal rate. The proposed change is framed as part of a wider push to build a technology‑driven, high‑efficiency national highway network and to deliver seamless, contactless travel across more than 1,150 fee plazas nationwide.
Key Takeaways:
- NHAI is weighing a proposal to stop accepting cash at all national highway toll plazas from 1 April 2026.
- FASTag usage already exceeds 98% of toll transactions, with UPI added as a complementary digital option.
- Cash users currently pay double the fee; UPI payments are charged at 1.25x, incentivizing digital adoption.
- Authorities say cash payments are a major source of congestion, delays and transaction disputes.
- The plan aligns with India’s broader strategy to deepen digital payments and modernize transport infrastructure.
Why It Matters:
- Represents a significant national‑scale example of “cashless by design” policy in everyday transport payments.
- Reinforces India’s position as a global leader in retail digital payments infrastructure (UPI, FASTag).
- Provides a proof‑point for how policy levers (pricing, mandates) can accelerate digital payment migration.
- May raise inclusion questions for users without access to digital wallets or banking, especially in rural areas.
- Offers a model other countries may study when considering fully digital tolling or transport‑fare systems.
A long‑form explainer on the UK’s incoming 2026 regime for systemic stablecoins argues that Bank of England and FCA rules will effectively create a new class of digital money with stronger solvency protections than ordinary commercial bank deposits. Under the proposed model, stablecoins used for payments must be backed 1:1 with deposits held directly at the central bank, rather than commercial paper or bank assets, eliminating traditional bank‑run credit risk and moving toward a narrow‑banking structure. The piece contrasts three forms of money in the UK – commercial bank money, physical cash, and regulated stablecoins – and concludes that ring‑fenced central bank reserves plus blockchain traceability give regulated stablecoins near‑zero insolvency risk and high recovery potential in fraud cases. It stresses that this framework applies to privately issued payment stablecoins and is distinct from any future UK retail CBDC.
Key Takeaways:
- The 2026 UK framework for systemic stablecoins will require strict backing in highly liquid, secure assets, in practice central bank deposits.
- Compared with bank deposits, regulated stablecoins would carry near‑zero insolvency risk because issuers cannot lend user funds.
- A comparison table shows 2026 regulated stablecoins outranking commercial bank money on insolvency risk, theft recovery, and settlement speed.
- The article brands the regime a “growth regulation” that aims to de‑risk, not suppress, stablecoin adoption so they can become core payments infrastructure.
- It clarifies that these rules cover private stablecoins, not a UK CBDC or “Britcoin,” and that physical cash will remain legally protected.
Why It Matters:
- The piece captures how UK policymakers are positioning regulated payment stablecoins as safe, central‑bank‑anchored digital money rather than speculative crypto assets.
- Requiring backing at the Bank of England effectively turns systemic stablecoins into tokenised central bank liabilities via intermediaries, tightening the link between public money and private rails.
- If implemented as described, the UK could become one of the safest jurisdictions globally for systemic stablecoins, attracting issuers and institutional users.
- The model illustrates a middle path between private, lightly regulated stablecoins and a full retail CBDC, which other countries may study.
- For markets, it signals that “unregulated crypto is dangerous” is being replaced by tight prudential regimes that aim to make regulated stablecoins mainstream payment instruments.
An institutional market wrap highlights two important US stablecoin‑related developments: new SEC guidance on broker‑dealer capital treatment for stablecoins and the launch of a ProShares “stablecoin‑ready” money market ETF that recorded 17 billion dollars in day‑one trading volume. The SEC guidance allows brokers to apply only a 2 percent capital haircut to proprietary positions in certain eligible stablecoins, lowering the regulatory cost of holding them on the balance sheet and potentially encouraging more direct stablecoin exposure in broker‑dealer workflows. At the same time, the ProShares fund is framed as part of a growing suite of ETF products designed to plug seamlessly into stablecoin rails and tokenised cash management. The article situates both moves alongside rising expectations that the CLARITY Act will pass by April, providing a fuller legal framework for US digital assets.
Key Takeaways:
- SEC guidance lets broker‑dealers apply a 2 percent capital haircut to proprietary positions in specified “eligible” stablecoins.
- This reduces the capital cost of holding stablecoins compared with treating them as high‑risk assets on broker balance sheets.
- ProShares launched a “stablecoin‑ready” money market ETF that generated roughly 17 billion dollars in first‑day trading volume.
- The wrap links these product and regulatory moves to broader institutional adoption trends, including tokenised money market pilots by BNP Paribas.
- Ripple’s CEO is cited as seeing a 90 percent chance that the CLARITY Act will pass by April, which would further codify stablecoin and crypto market structure.
Why It Matters:
- Capital relief for eligible stablecoins is a concrete sign that US securities regulators are beginning to normalise stablecoins as part of broker‑dealer liquidity and collateral stacks.
- A high‑volume “stablecoin‑ready” ETF shows traditional asset managers are designing products meant to interface directly with tokenised and stablecoin cash rails.
- Together, these developments narrow the gap between on‑chain dollar liquidity and off‑chain regulated products, supporting the narrative of stablecoins as core market plumbing.
- The moves land just as lawmakers push to finalise the CLARITY Act, so they could shape how fast brokers and ETFs lean into stablecoin infrastructure once legislation is in place.
- For institutional investors, they signal that stablecoin risk is shifting from “unmodelled” to explicitly parameterised by capital and product rules, which typically precedes wider adoption.
Powered by
