Quick Take:

• Stablecoin competition is heating up, extending from banks and cross‑border payment firms to major exchanges. Even Coinbase is stepping beyond its comfort zone of “compliant distribution” and pivoting toward onchain infrastructure.

• At the same time, Google Cloud has launched its AP2 protocol for AI payments, aiming to create a trusted value network for the machine economy. The key question: what role will stablecoins play in this new landscape?

Market Overview & Growth Highlights

Total stablecoin market cap reached $291.839b, with a week-over-week increase of $4.544b. In terms of market structure, USDT continues to maintain its dominant position at 58.73%; USDC ranks second with a market cap of $73.989b, accounting for 25.35%.

Blockchain Network Distribution

Top 3 Networks by Stablecoin Market Cap:

1. Ethereum: $160.479bb

2. Tron: $77.56b

3. Solana: $12.411b

Top 3 Networks by Weekly Growth:

1. M By M^0 (M) : +18.79%

2. EURC (EURC) : +5.48%

3. Ethena USDtb (USDTB) : +5.48%

Data from DefiLlama

🎯Coinbase Shifts From Compliance Gateway to Onchain Infrastructure

Competition in the stablecoin sector is escalating, with banks, payment firms, exchanges, and new issuers all entering the field. For Coinbase, the pressure is acute: its reliance on USDC distribution and interest spreads is weakening as regulatory clarity and new entrants erode its long‑standing moat.

The GENIUS Act opened the market, allowing Tether’s USAT and upcoming tokens from Robinhood and Revolut to challenge Coinbase’s position. Meanwhile, shrinking interest margins from Fed rate cuts intensify pressure, cutting into Coinbase’s profits and threatening valuations tied to its deep financial link with Circle.

At the same time, exchanges and apps are moving to issue their own stablecoins through white‑label models. Hyperliquid’s USDH effort underscores this shift, with potential to capture a slice of USDC’s market share. Circle’s investment in Hyperliquid highlights how the market is fragmenting into multi‑layer, open competition rather than dominance by a few players.

Facing these headwinds, Coinbase is pivoting. Recent moves include openly fueling expectations of a future Base token, offering 10%+ onchain lending yields, channeling centralized users into DeFi, and expanding cross‑chain reach. Together, these steps reflect a strategy to anchor its future in real onchain activity. The company is repositioning itself from a regulatory gateway to a core onchain financial hub, a necessary shift to retain influence in the stablecoin era.

🎯Google Cloud Launches AP2 Protocol, Targeting the Future Machine Economy

Google Cloud this week released the open‑source Agent Payments Protocol (AP2), marking the first time AI agents gain the ability to perform economic actions similar to individuals. AP2 supports traditional payment methods like cards, while also adding stablecoins as native settlement assets, providing agents with a direct, trustless mechanism for transactions. The move signals Google’s ambition to address trust issues in AI commerce and position itself as the trust layer for the coming machine economy.

Traditional payment systems rely on human accountability and multiple intermediaries for verification, a model that breaks down in an AI‑driven environment. Consumers cannot easily confirm whether an agent executed instructions correctly, merchants struggle to validate authenticity, and payment networks face difficulty assigning responsibility when errors occur.

AP2 shifts trust from opaque machine choices to verifiable user intent. The protocol introduces three forms of authorization mandates: Cart Mandate, Intent Mandate, and Payment Mandate. Each is built on cryptographic signatures and verifiable credentials, forming a proof chain where every step generates a credential and each subsequent action depends on verifying the previous one. This structure makes the entire transaction lifecycle—from intent capture to payment execution—auditable and tamper‑resistant.

The deeper implication is that payment is reframed as part of computation itself. Each AI transaction becomes a semantic data packet that includes not just the transfer of value but also intent, context, and conditions. This enables granular pricing models for developers and captures high‑value intent data reflecting agent decisions and user preferences—data that can reinforce Google’s advertising and cloud businesses while building new competitive moats in the AI economy.

Such “payment‑as‑computation” only scales effectively onchain. Blockchain technology provides the flexible data structures, cryptographic trust, and programmable environment required. Stablecoins emerge as the key lever: while AP2 can operate without them, only programmable, decentralized stablecoins can turn it into a full AI economic operating system. Notably, Ethereum contributed the x402 extension of the protocol’s A2A (agent‑to‑agent) channel, reopening Ethereum’s role in payments by anchoring high‑frequency micro‑settlements between AI agents. The Ethereum Foundation has also pivoted toward AI and machine economy initiatives with its new dAI team, aiming to build decentralized AI infrastructure to ensure the ecosystem does not rely solely on centralized providers.

Capital Deployment

💰Standard Chartered’s venture arm SC Ventures is preparing a $250M digital assets fund focused on financial services, targeted for launch in 2026 with backing from Middle Eastern investors, partner Gautam Jain announced at Money 20/20 in Saudi Arabia. Alongside, SC Ventures is also planning a $100M Africa‑focused vehicle and its first venture debt fund, though their crypto scope is unclear. The move underscores institutional momentum in digital assets, echoing JPMorgan’s Kinexys project and Goldman Sachs’ tokenized money‑market fund with BNY Mellon, while spotlighting the Middle East’s growing role as a hub for blockchain and crypto capital.

💰MoonPay has acquired payments startup Meso to expand its crypto payments footprint, though deal terms and timeline weren’t disclosed. Meso’s co‑founders Ali Aghareza (ex‑PayPal) and Ben Mills (ex‑Venmo) will join MoonPay as CTO and SVP of Product, respectively. It’s MoonPay’s second payments deal this year, following its $175M purchase of Solana‑based processor Helio in January. By consolidating talent and infrastructure, MoonPay is positioning itself as the Stripe‑style backbone of crypto and Web3 payments, aiming to build the world’s largest crypto payments network for both institutions and consumers.

Market Adoption

🌱MoneyGram has launched a new app that puts USDC, Stellar, and Crossmint wallet tech at its core, positioning stablecoins as the backbone of its digital payments. Debuting in Colombia—a major remittance corridor where families receive 22x more than they send and the peso has lost over 40% in four years—the app enables users to receive and hold dollar‑denominated stablecoins. With 150M customers, 400k retail outlets, and reach in 200+ countries, MoneyGram is already the largest cash on/off ramp for crypto. CEO Anthony Soohoo likened stablecoins to spreadsheets in the PC era or browsers in the internet era, arguing that with U.S. GENIUS legislation in place, stablecoins are set to be crypto’s killer app for real‑time settlement and value storage.

Big Picture

🔮BitMEX co‑founder Arthur Hayes says expansive fiscal policy under Trump’s second term will drive a wave of global money printing and extend the crypto bull market through 2026. Speaking with Kyle Chassé, he argued the spending surge has yet to fully kick in, with mid‑2026 bringing another round of liquidity that investors underestimate in scale for both equities and crypto. Hayes dismissed concerns over Bitcoin’s pause after its $124k August peak, framing it as stronger protection against currency debasement than traditional assets. He linked the outlook to geopolitical fractures—including potential euro instability if France were to default—and urged patience, noting Bitcoin’s real power lies in compounding returns over years, not short‑term speculation.

Regulatory Compliance

🏛 Quantexa has launched Cloud AML, a Microsoft‑powered compliance platform aimed at U.S. community and mid‑sized banks facing new stablecoin oversight. The tool promises faster, more accurate anti‑money‑laundering investigations with fewer false positives, addressing the gap between uniform regulatory standards and uneven bank resources. As stablecoin legislation opens the door to larger players like Bank of America and Citigroup, smaller institutions are under pressure to track crypto‑linked flows where exchanges often obscure fund origins. Quantexa’s survey shows 36% of AML professionals expect digital assets to drive the industry’s biggest changes in the next five years, underscoring why banks need better visibility into crypto risk.

🏛Tether has unveiled plans for USAT, a U.S.‑regulated stablecoin, appointing former Trump administration official Bo Hines—ex‑director of the White House crypto council—as CEO of its new U.S. arm. Issued via Anchorage Digital with backing from Cantor Fitzgerald, USAT is slated to launch by the end of 2025 as a complement to Tether’s $169B USDT. The new team will be based in Charlotte, NC, with Group CEO Paolo Ardoino highlighting reduced intermediation and closer ties with U.S. banks. With Tether already the world’s 18th‑largest U.S. Treasury holder and $13B in 2024 profits, the move cements its push into America’s regulated stablecoin market.

🏛U.S. Rep. French Hill has proposed amending the recently passed GENIUS stablecoin law through the Clarity Act, with Sen. Cynthia Lummis signaling support. The changes would tighten CEO/CFO liability for financial disclosures, bar non‑financial companies from issuing stablecoins, and guarantee the right of Americans to self‑custody digital assets via hardware or software wallets. Senate Banking Committee Republicans have already circulated a draft, with Lummis aiming to wrap up broader market structure legislation by year‑end, a timeline backed by Treasury advisor Tyler Williams. While GENIUS marked a landmark bipartisan win, these revisions could decide the ultimate shape of U.S. stablecoin regulation.

🏛BDACS, a Korean crypto custody provider, has launched the country’s first KRW‑backed stablecoin, KRW1, on Avalanche after completing a proof‑of‑concept trial. Each token is fully collateralized with won held at Woori Bank, one of Korea’s largest lenders, with reserves verifiable in real time via bank APIs. Still in PoC phase and not yet in public circulation, KRW1 is being positioned for remittances, payments, savings, and investments, with multi‑chain expansion on the roadmap. The effort aligns with President Lee Jae‑myung’s push for local fiat‑pegged stablecoins to bolster monetary sovereignty, even as the central bank insists issuance remain restricted to licensed banks.

🏛The Bank of England is weighing caps on systemic stablecoin holdings, with limits of £10k–20k ($13.6k–$27.2k) for individuals and £10M ($13.6M) for firms, according to the FT. Coinbase’s Tom Duff Gordon criticized the plan as harmful to savers, London’s financial sector, and sterling itself, noting no comparable curbs exist in other major markets. Industry groups echoed that enforcement would be impractical without digital ID systems and inconsistent given no such caps apply to cash or bank deposits. If adopted, the rules would make the U.K. stricter than both the U.S. GENIUS Act and EU’s MiCA, which regulate issuers but set no limits on user holdings.

🏛 Australia’s securities regulator ASIC has eased rules for stablecoin intermediaries, allowing them to distribute AFS‑licensed issuers’ tokens without needing separate licenses for financial services, markets, or clearing facilities. The relief, the country’s first major step to reduce uncertainty in stablecoin oversight, could expand as more issuers secure AFS licenses. Intermediaries must still provide clients with product disclosure statements, while issuers remain accountable for transparency and prudential duties. The measure, pending federal registration, creates a friendlier regulatory landscape ahead of Treasury’s broader framework, with Blockchain APAC’s Steve Vallas noting global players’ appetite to meet local rules will shape industry growth.

New Launches

👀MetaMask has quietly shipped its own stablecoin, mUSD, making it the first self‑custody wallet to debut a native dollar unit. Issued by Stripe’s Bridge and minted through M0’s decentralized stack, mUSD is fully backed 1:1 by liquid, high‑quality assets with real‑time transparency and cross‑chain composability. Users can now fund, hold, swap, send, and bridge mUSD directly in‑app, with Mastercard spending support via MetaMask Card expected later this year. The launch lands as Tether readies USAT, Hyperliquid builds its native coin, and U.S. banks experiment post‑clarity, pushing stablecoin competition into overdrive. Circulating mUSD supply sits at roughly $18M.

👀The Ethereum Foundation has created a new dAI team, led by core developer Davide Crapis, to push Ethereum as the coordination layer for the AI economy. Its dual mission: position Ethereum as the default settlement layer for AI and machine agents, while building a decentralized AI tech stack that resists capture by a few entities. The team’s first milestone is ERC‑8004, a standard for AI agent identity and transaction rules, slated for release at Devconnect in November. As autonomous software increasingly signs messages, makes payments, and triggers on‑chain services, Ethereum’s neutral and verifiable base becomes critical for scaling trust and governance.

👀Coinbase has rolled out an onchain USDC lending feature, delivering yields up to 10.8% without leaving the app. Powered by Morpho and Steakhouse Financial on Base, the service creates smart contract wallets for users, letting deposits start accruing instantly with the option to withdraw anytime liquidity permits. It’s launching across the U.S. (excluding New York), Bermuda, and other markets, while keeping Coinbase’s familiar UX. This marks a step beyond its prior 4–4.5% rates, offering mainstream users higher passive returns and reinforcing Coinbase’s position as a trusted bridge into DeFi as USDC supply tops $73.6B.

👀PayPal has introduced PayPal Links, a feature that lets users generate one‑time custom payment links and share them across any chat, rolling out first in the U.S. and later in the U.K. and Italy. Crypto is being baked into the P2P flow: U.S. users can now send Bitcoin, Ethereum, and PYUSD across PayPal, Venmo, and compatible wallets. Alongside, PayPal continues to offer a 3.8% APY savings account (FDIC‑insured via Synchrony Bank) and a suite of crypto trading options. The move doubles down on seamless, global money movement, adding to PayPal’s 10% year‑over‑year P2P growth and Venmo’s strongest volumes in three years.

👀 Vercel has released x402‑mcp, an open protocol that lets AI agents handle payments directly via HTTP 402, removing the need for accounts or API key management. Developers can price API routes or MCP tools through seamless integration with the Model Context Protocol and Vercel AI SDK, while clients wrap calls to manage payments automatically. Settlements currently run on USDC over Base, though the x402 spec supports multiple networks and even non‑crypto methods, with ready‑to‑deploy templates and Coinbase Wallet integration. By enabling agents to pay for services programmatically, x402 tackles a core bottleneck in the AI economy and brings true financial autonomy to machine systems.

👀PayPal’s dollar‑pegged stablecoin PYUSD has expanded to nine new blockchains via LayerZero, pushing beyond its original footprint on Ethereum, Solana, Arbitrum, and Stellar. Through LayerZero’s Hydra Stargate, Paxos‑issued PYUSD is mirrored as PYUSD0, a permissionless version fully swappable 1:1 with the base token. The rollout brings PYUSD to Abstract, Aptos, Avalanche, Ink, Sei, Stable, and Tron, while community versions on Berachain and Flow auto‑convert. Launched in 2023, PYUSD has now grown to $1.3B in circulation, with this multi‑chain push signaling PayPal’s intent to cement its role across the broader crypto economy.

👀Offline Protocol has unveiled OfflinePay, billed as the world’s first offline stablecoin settlement network, designed to let unbanked and digitally underserved communities exchange stablecoins peer‑to‑peer on basic smartphones without internet access. Alongside, the company launched the Stable Institute to study inclusive money systems and how stablecoin infrastructure can expand equitable financial access. OfflinePay joins products like Fernweh, OfflineID, and Proof of Location AVS, but emerges as the flagship aimed at regions with weak infrastructure, limited connectivity, or frequent disasters. By enabling true offline payments, it cuts remittance costs, improves transparency, and advances financial inclusion where traditional digital rails fail.