Katherine Ross

David Canellis

Today, enjoy the Empire newsletter on Blockworks.co. Tomorrow, get the news delivered directly to your inbox. <a href="https://blockworks.co/newsletter/empire" target="_blank" rel="noreferrer noopener">Subscribe to the Empire newsletter</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Happy Friday! This is our second edition of the new Friday format.



We’re digging into stablecoins today, looking into last month’s activity, and we also heard from Circle CEO Jeremy Allaire.&nbsp;



We hope you have a relaxing weekend —&nbsp;but don’t miss our poll at the end before you start enjoying the last days of summer.



— Katherine Ross &amp; David Canellis



<h2 class="wp-block-heading">Up, up, up</h2>



Earlier this week, I <a href="https://blockworks.co/news/empire-newsletter-ton-outage-centralization">briefly mentioned</a> that the total stablecoin market cap was carving out fresh all-time highs.&nbsp;



CCData noted that the nearly 3% jump over August marks the “highest end of month market capitalization” notched since April 2022 (oh, <a href="https://www.theverge.com/2022/7/14/23216415/south-park-crypto-paramount-plus-streaming-wars-part-2">those</a> were the days…).&nbsp;



<figure class="wp-block-image"><img loading="lazy" decoding="async" width="1476" height="486" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-61.png" alt="" class="wp-image-91200" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-61.png?w=1476 1476w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-61.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-61.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-61.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-61.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-61.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-61.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-61.png?w=80 80w" sizes="(max-width: 1476px) 100vw, 1476px" /><figcaption class="wp-element-caption">Source: CCData</figcaption></figure>



It’s not necessarily all good news, though, as there were some hiccups.&nbsp;



“Stablecoin trading volume fell 14.2% to $848 [billion] in August (as of the 23rd). [Overall] trading volumes are on track for a second consecutive monthly increase, driven by volatile digital asset prices following the unwinding of the Japanese Yen carry trade and recovery in TradFi markets,” CCData analysts <a href="https://ccdata.io/view-report/stablecoins-cbdcs-report-august?utm_medium=email&amp;_hsenc=p2ANqtz--mt8-PNjYP4pfdOAbdxUfl8zjoSMMS59wIn8TEWYfitOYazP12eyNAct18ur6FYQVCZhU-pZ6j6nxIUvH-wAs-40rgGw&amp;_hsmi=93867715&amp;utm_content=93867715&amp;utm_source=hs_email">wrote</a>.



<figure class="wp-block-image"><img loading="lazy" decoding="async" width="1600" height="488" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-64.png" alt="" class="wp-image-91203" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-64.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-64.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-64.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-64.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-64.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-64.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-64.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-64.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-64.png?w=80 80w" sizes="(max-width: 1600px) 100vw, 1600px" /><figcaption class="wp-element-caption">A look at the volumes from last August to now.</figcaption></figure>



Remember how I previously mentioned my chat with Polygon’s Colin Butler? Stablecoins actually came up a few times.&nbsp;



At one point, I asked Butler which types of crypto offerings could have the most market value, given how it’s no secret that stablecoins are viewed as fairly successful.



Butler went on to opine: “What we have now is the money market fund onchain, which is not obviously equal to a stablecoin, right? But it could serve as a settlement token in some use cases. I don&#8217;t think anyone can tell how deeply that penetrates into finance.”&nbsp;



“I just don&#8217;t think we&#8217;re going to know until people really try it. And it could go all the way. It could, overlap [with or] flip tether at some point,” he continued. “Or there could be structural challenges with it that, for whatever reason, don&#8217;t allow it to have that kind of product market fit. I think you&#8217;re gonna know pretty quickly, in the next 12 months.”



What’s also interesting is the surge seen in PayPal’s stablecoin. CCData found that, over the last month, PYUSD’s market cap jumped 56%.&nbsp;



PYUSD currently sits just below a $1 billion market cap, according to DeFiLlama <a href="https://defillama.com/stablecoins">data</a>, after hitting said milestone earlier this month. It’s the sixth largest stablecoin by market cap.



<figure class="wp-block-image"><img loading="lazy" decoding="async" width="1574" height="486" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-62.png" alt="" class="wp-image-91201" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-62.png?w=1574 1574w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-62.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-62.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-62.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-62.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-62.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-62.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-62.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-62.png?w=80 80w" sizes="(max-width: 1574px) 100vw, 1574px" /><figcaption class="wp-element-caption">Unfortunately, I’m not a chart wiz like David, but CCData’s got us covered. </figcaption></figure>



“The recent spike in demand is likely due to attractive incentives offered on decentralized lending protocols for PYUSD, with dapps including Drift Protocol offering up to 18% APR in yield. On-chain data shows that over 50% of PYUSD is serving as collateral on lending protocols and quote pairs on DEXs,” CCData analysts wrote.



Our colleague and Lightspeed newsletter writer Jack Kubinec noted that PayPal has to be eating some of the cost when it comes to onramping. Perhaps that speaks to some of the success we’re seeing in the data.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">It&#39;s currently free to onramp PYUSD to a Solana wallet. I paid PayPal $10 with a debit card and ended up with exactly $10 in PYUSD in my Phantom wallet. This process isn&#39;t free however — I wonder if PayPal is footing the onramp bill as part of the liquidity incentives deal?&mdash; Jack Kubinec (@whosknave) <a href="https://twitter.com/whosknave/status/1829226973027283446?ref_src=twsrc%5Etfw">August 29, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



But PayPal’s not the only stablecoin I want to cover this morning. I also want to touch on USDC.&nbsp;



In August, USDC’s market cap climbed 3% to roughly $34 billion. It gained a little more than tether — obviously the dominator when we talk about this sector — which saw an increase of 2.5% to a $117 billion market cap, keeping an easy lead on the rest of the market.&nbsp;



USDC’s growth aside, the stablecoin remains one of my many focuses in part because Circle, its operator, is still trying to go public. In January, it <a href="https://blockworks.co/news/circle-files-ipo">confidentially filed for an IPO</a>. Essentially, Circle filed a registration statement with the SEC under lock and seal. Meaning you and I can’t see it… yet.&nbsp;



And I, dear reader, can’t shake my Wall Street roots even when I desperately try. Admittedly, I’m itching to get my eyes on the S-1 to gleam some details about Circle ahead of its public debut.&nbsp;



Unfortunately, we may have a while yet to wait. Circle didn’t return a request for comment on&nbsp; where they’re at in the process. In an Empire podcast interview (which we’ll get to in a moment) CEO Jeremy Allaire just said that the company remains “very focused on becoming a global US listed publicly traded company.”



“A publicly traded company in the US will increase the trust, increase the transparency [and] will be holding us to the highest governance standards, ethical standards and forms of public accountability that can exist for any corporation in the world, and that&#8217;s valuable,” Allaire said further.&nbsp;



But while we remain unclear on Circle’s timeline, what we do know is that the stablecoin segment continues to grow, even as parts of the market seem to stutter.&nbsp;



— Katherine Ross



<h2 class="wp-block-heading">IYKYK</h2>



Speaking of Circle…



The <a href="https://blockworks.co/podcast/empire/01677b8c-6656-11ef-8ed0-ffb0cd022c10">Empire episode this week</a> featured Jason Yanowitz, Santiago Santos and Allaire, who covered far more subjects than just the IPO.&nbsp;



Allaire gave listeners a read on his hopes and dreams (read: 5-10 year vision) for Circle — and stablecoins in general.



“The really exciting thing is actually what happens when machines can intermediate value exchange, where commercial relationships,&nbsp; commerce relationships, labor relationships, financial relationships can be codified,” Allaire explained. “And deployed on open, public, transparent, compute infrastructure, [also known as] public blockchains in the form of smart contracts.”



To Allaire, it’s the “fundamental” breakthrough of blockchains.&nbsp;



And now you know.&nbsp;



<figure class="wp-block-image"><img loading="lazy" decoding="async" width="1600" height="1199" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-63.png" alt="" class="wp-image-91202" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-63.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-63.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-63.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-63.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-63.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-63.png?w=343 343w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-63.png?w=348 348w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-63.png?w=292 292w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-63.png?w=80 80w" sizes="(max-width: 1600px) 100vw, 1600px" /></figure>



No question there’s room for growth in RWAs.&nbsp;



Counting stablecoins, the total value of the segment is currently almost $182.28 billion — only $5 billion short of its lifetime peak set just before Terra blew up in May 2022.



Circle today carves out almost 20% of the total, while Tether still has more than half.&nbsp;



I’d be on the lookout for tokenized real estate to show up on the chart above over the coming years.&nbsp;



There’s a few projects slowly gathering speed in that corner of RWAs — but overall they&#8217;re still too small to really appear prominently. Perhaps more so after a potential boost from whatever the Trump family is <a href="https://x.com/realDonaldTrump/status/1829141447087648796">cooking up</a>.



— David Canellis &amp; Katherine Ross



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Circle and Paypal’s stablecoins keep notching gains

James Cirrone

Circle’s public beta for its wallet-as-a-service platform begins Tuesday and will allow Web3 developers on Avalanche, Ethereum and Polygon to embed wallets in the apps they’re creating.



Programmable Wallets, as Circle has dubbed the new offering in its <a href="https://www.circle.com/blog/circle-launches-programmable-wallets">blog</a>, amounts to a handful of APIs that developers can plug into their apps to get to their desired use case faster and easier than writing all the necessary code from scratch. 



“With these APIs, you can specify parameters, such as the blockchain network you want to create the wallet on, custody type, transaction type, transaction value limits and more, to generate purpose-built wallets tailored to the use case you&#8217;re building,” Circle explained in its <a href="https://developers.circle.com/w3s/docs?_gl=1*1lxmz1e*_ga*MTU4ODQ4NzEzNi4xNjkxMTU5NDg0*_ga_GJDVPCQNRV*MTY5MTQyODUwMi41LjEuMTY5MTQyOTI2Ni41OC4wLjA.">developer documents</a>. 



<a href="https://blockworks.co/tag/circle">Circle</a> CEO and co-founder Jeremy Allaire said Programmable Wallets are part of the stablecoin issuer’s strategy to help move along the adoption of digital assets and “public blockchain-based payments.”



“This new platform marks the first step for Circle’s Web3 services as we work to ease common pain points for developers, remove friction from value exchange, deliver more seamless user experiences and help drive blockchain-powered wallet adoption,” Allaire said in a statement.



Circle previously waded into Web3 in late April when it made its permissionless cross-chain transfer protocol (CCTP) available to Ethereum and Avalanche developers. Since then, <a href="https://blockworks.co/news/usdc-transfers-more-secure">USDC can be transferred more securely and efficiently between the two chains</a> using a burn-and-mint mechanism.



Programmable Wallets is using multi-party computation (MPC) technology as the means to secure users’ assets and transactions, according to its white paper.&nbsp;



ZenGo and <a href="https://blockworks.co/tag/coinbase">Coinbase</a>’s wallet-as-a-service solution, <a href="https://blockworks.co/news/coinbase-cloud-wallet-as-a-service">which launched on Ethereum in May 2023</a>, are examples of MPC-based services.&nbsp;



A user’s private key is sharded into multiple different pieces that are distributed among trusted third parties. This is to eliminate any one single point of failure.



Circle is also looking to expand the beta for Programmable Wallets to other chains sometime in the second half of 2023.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Circle launches Programmable Wallets public beta in Web3 push

Casey Wagner

Circle, the company behind the USDC stablecoin, released its “state of the USDC economy” report, in which it emphasized the importance of dollar-backed cryptos and attempted to ease worries about the state of its reserves. 



“Our history of pioneering transparency underscores our commitment to providing USDC holders and the general public with open, timely reporting on how we minimize risk and maintain liquidity in the USDC reserve,” Circle said in the <a href="https://6778953.fs1.hubspotusercontent-na1.net/hubfs/6778953/PDFs/2301StateofUSDCEconomy_Web.pdf" target="_blank" rel="noreferrer noopener">report</a>, released Tuesday. 



Circle said it will now partner with Deloitte, Coinbase’s accounting firm of choice, for audits on its proof of reserves. A Binance spokesperson told Blockworks in December they were under the impression the “Big Four” accounting firms — known to be Deloitte, Ernst &amp; Young, KPMG and PricewaterhouseCoopers — were <a href="https://blockworks.co/news/crypto-auditors-call-it-quits">“currently unwilling”</a> to conduct a proof-of-reserves audit for a private crypto company. 



Circle, while currently privately held, was considering entry into the public market through a special purpose acquisition partnership (SPAC) with Concord before <a href="https://blockworks.co/news/circle-kills-spac-plans">abandoning its plans</a> last month in the wake of the FTX collapse. 



“We are disappointed the proposed transaction timed out, however, becoming a public company remains part of Circle’s core strategy to enhance trust and transparency, which has never been more important,” Circle CEO Jeremy Allaire said in a <a href="https://www.prnewswire.com/news-releases/circle-and-concord-acquisition-corp-mutually-agree-to-terminate-proposed-business-combination-301694560.html?tc=eml_cleartime" target="_blank" rel="noreferrer noopener">statement</a> at the time of the announcement.



Circle, who for years partnered with firm Grant Thornton for its audits, makes the switch as various accounting firms have exercised caution over audits of crypto companies.&nbsp;



Mazars Group and Armanino <a href="https://www.forbes.com/sites/emilymason/2022/12/15/ftx-accounting-firm-armanino-ends-crypto-audit-practice/?sh=54b386bd362f" target="_blank" rel="noreferrer noopener">reportedly</a> dropped <a href="https://blockworks.co/news/ftx-auditor-proof-of-reserves">their crypto clients</a> last month. Mazars, which handled proof-of-reserves audits for exchanges KuCoin, Binance and Crypto.com, elected to stop providing the services because of “concerns regarding the way these reports are understood by the public,” according to <a href="https://www.cnbc.com/2022/12/16/mazars-suspends-all-work-with-crypto-clients-including-binance-cryptocom.html" target="_blank" rel="noreferrer noopener">reports</a>. 



<h3 class="wp-block-heading">Regulating USDC Reserves</h3>



Circle’s report comes as the industry continues to wait for more regulatory guidance from Congress, which <a href="https://blockworks.co/news/stablecoin-regulation-congress-priority">will likely come to the stablecoin sector first</a>, experts said.&nbsp;



“The first Congressional focus point will no doubt be stablecoins,” Katherine Dowling, general counsel and CCO at Bitwise Asset Management, told Blockworks last week.&nbsp;



Stablecoin regulation, namely about reserve reporting and liquidity requirements, has been a long time coming, Dowling said, pointing to the <a href="https://blockworks.co/news/bipartisan-stablecoin-regulation-has-a-slim-chance-of-passing-this-year">bipartisan bill lawmakers failed to pass</a> last session. With much of the legwork already done, Dowling said stablecoin legislation has the potential to be an early win for Congressional members looking to solidify some sort of crypto policy.



“Regardless of where members of congress are on the crypto spectrum — pro or con — or on the learning curve, there is a general sense that something must be done here,” Dowling said.&nbsp;



Allaire agreed, noting in the report that Circle is prepared on a regulatory front and is watching developments closely.&nbsp;



“Policymakers globally are sharpening their focus, ushering in much-needed regulation for how trusted digital currencies can be supervised — in a consistent and harmonized manner — by banking and payments regulators,” Allaire wrote.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Circle Taps Deloitte as New Auditor, Doubles Down on Proof of Reserves 

Shalini Nagarajan

<div id="highlights-block_63170cbb688fe" class="highlights">
 <ul>
 <li>Binance said the move is meant to enhance liquidity and capital efficiency for users</li>
 <li>“Converged dollar books on Binance — now same as on FTX and Coinbase — is a good thing,” Circle’s CEO said</li>
 </ul>
 
</div>



Cryptocurrency exchange <a href="https://cms.blockworks.co/tag/binance/" target="_blank" rel="noreferrer noopener">Binance</a> is removing multiple stablecoin trading pairs and will automatically convert user holdings in <a href="https://cms.blockworks.co/tag/usdc/" target="_blank" rel="noreferrer noopener">USDC</a> and other stablecoins — with the exception of Tether’s USDT — into its own Binance USD (BUSD) token.



Binance <a href="https://www.binance.com/en/support/announcement/e62f703604a94538a1f1bc803b2d579f" target="_blank" rel="noreferrer noopener">said on Monday</a> that existing balances and new deposits of USDC, pax dollar (USDP) and trueUSD (TUSD) will be converted into BUSD on Sept. 29 at 11 pm ET.&nbsp;



This effectively means that competing stablecoins — and their order books — will be consolidated into the platform’s native stablecoin. The move won’t affect withdrawals, however, and Binance customers will still be able to pull out funds denominated in the three stablecoins.&nbsp;



Users who want to convert their holdings into BUSD at a 1:1 ratio before the auto-conversion can do so manually on <a href="https://www.binance.com/en/convert" target="_blank" rel="noreferrer noopener">Binance Convert</a> between Sept. 26 and Sept. 29.&nbsp;



Binance said the move “is a business decision to enhance liquidity and capital efficiency for users.”



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“BUSD being 100% backed by cash and cash equivalents and a stablecoin regulated by the New York State Department of Financial Services (NYDFS), users can be protected,” a spokesperson told Blockworks.&nbsp;</blockquote>



BUSD is managed by third party Paxos, which handles dollar redemptions, asset treasuries and attestations.



Binance added that USDT is not one of the stablecoins involved in the auto-conversion initiative, but didn’t provide a reason as to why. The spokesperson declined to comment when asked how much USDC is currently held in Binance’s wallets.



Rival exchange FTX similarly aggregates stablecoin deposits of USDC, TUSD, USDP and BUSD as “USD” in its customer’s exchange wallets while accounting for USDT balances separately. FTX does not have its own branded stablecoin.



USDC, which is issued by Circle, is the second most valuable stablecoin after tether with a market capitalization of roughly $52 billion, <a href="https://www.blockworksresearch.com/assets/usdc" target="_blank" rel="noreferrer noopener">Blockworks Research</a>’s portal shows. Binance’s stablecoin trails behind by a wide margin with a market cap of <a href="https://www.blockworksresearch.com/assets/busd" target="_blank" rel="noreferrer noopener">$19.4 billion</a>, tether boasts about $67.5 billion.



Circle’s co-founder and CEO Jeremy Allaire appeared to be on board with Binance’s decision, <a href="https://twitter.com/jerallaire/status/1566922064119971840" target="_blank" rel="noreferrer noopener">predicting</a> the move would lead to a gradual net share shift from Tether to BUSD and USDC. “Converged dollar books on Binance — now same as on FTX and Coinbase — is a good thing,” he wrote.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Prediction: this move leads to a gradual net share shift from USDT to BUSD and USDC. <a href="https://t.co/pvITiUXo5d">https://t.co/pvITiUXo5d</a>&mdash; Jeremy Allaire (@jerallaire) <a href="https://twitter.com/jerallaire/status/1566922064119971840?ref_src=twsrc%5Etfw">September 5, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Meanwhile, a Circle spokesperson was more objective about the move. &#8220;Based on market activity, it would seem much of this transition has already passed and while optimizing dollar liquidity on the world’s largest exchange may carry benefits, the paradigm does raise potential market conduct questions,&#8221; they told Blockworks.



The decision to remove most rival stablecoins as trading pairs was also met with some skepticism. One Twitter commentator <a href="https://twitter.com/bloodgoodBTC/status/1566860397625352196" target="_blank" rel="noreferrer noopener">described</a> Binance’s decision as “crypto monopoly 101.” 



However, Binance’s plan allows users to continue to withdraw USDC, USDP or TUSD at a ratio of 1:1 from their BUSD balances after the conversion, so no one is forced to use BUSD to interact with Binance.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Binance To Rename All Stablecoin Holdings to BUSD

<div id="highlights-block_62ab5325f8168" class="highlights">
 <ul>
 <li>Euro stablecoins hold insignificant value in today’s crypto markets, where USD-pegged stablecoins dominate</li>
 <li>EUROC is expected to be supported by major cryptoasset custodians and DeFi protocols</li>
 </ul>
 
</div>



Europe is bidding adieu to negative interest rates — and a euro-backed stablecoin is vying to be a prime beneficiary.&nbsp;



Seizing the development in monetary policy, USDC’s issuer, Circle, announced Thursday a new euro-backed stablecoin called EUROC, modeled after the second-largest dollar-pegged stablecoin, which currently has a market cap of $54.4 billion.&nbsp;



The plan is for Euro Coin to be backed 100% by euro-denominated reserves held in Silvergate Bank, regulated in North America, so it is redeemable 1:1 for euros. The reserves will grow based on supply and demand.&nbsp;



“Euro Coin expands opportunities for payments, on-chain FX, trade finance, commerce, and broader digital asset markets use-cases. The launch is symbolic of a shift in crypto markets towards greater and greater utility value from blockchain infrastructure,” Circle’s co-founder and CEO, Jeremy Allaire, <a href="https://twitter.com/jerallaire/status/1537421741521309696" target="_blank" rel="noreferrer noopener">wrote</a> in a tweet.&nbsp;



The euro, shared by 19 European Union member states, is the second-largest currency in the world, just behind the US dollar, but has an insignificant representation in stablecoins. So far in 2022, the eurozone’s currency lost 11% of its value against the dollar, and some analysts predict the two currencies will reach parity later this year.



Until now, only a few stablecoins are pegged to the euro, such as Tether’s EURt — a sister stablecoin to the largest dollar-backed issue, USDT — or Stasis’ EURS. Far from the scale of dollar-pegged stablecoins, EURt has a market cap of roughly $216.1 million and EURS’ market cap sits around $130 million, <a href="https://www.coingecko.com/en/categories/stablecoins" target="_blank" rel="noreferrer noopener">according to CoinGecko</a>.



Asked whether the launch is linked to the European Central Bank&#8217;s decision to raise the benchmark interest rate in July and September out of negative territory, a Circle spokesperson told Blockworks that the company “builds for the long term.”



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“There is a clear need for a credible, sound, and regulated euro-backed stablecoin to play a role in the future of finance,” the spokesperson said.</blockquote>



However, <a href="https://www.circle.com/en/euro-coin" target="_blank" rel="noreferrer noopener">on EUROC’s website</a>, Circles addresses the issue: “How do negative eurozone interest rates impact Euro Coin? Circle assumes the interest rate risk on Euro Coin reserves, just as we do with USDC,” the company says.&nbsp;



The new token will be available for everyone June 30. EUROC will launch on the Ethereum blockchain as an ERC-20 standard token — additional blockchains will be added later this year. USDC similarly began on Ethereum and has since <a href="https://www.circle.com/en/multichain-usdc" target="_blank" rel="noreferrer noopener">expanded</a> to eight other chains.



“A number of ecosystem leaders will support Euro Coin at launch, including Anchorage Digital, Binance.US, Bitstamp, Compound, Curve, CYBAVO, DFX, Fireblocks, FTX, Huobi Global, Ledger, MetaMask Institutional, and Uniswap Protocol,” the statement said.&nbsp;



EUROC reserves will be audited and attested monthly by Grant Thornton, a US independent auditor, starting in July.



Asked whether the stablecoin will be compliant with future European regulation once <a href="https://cms.blockworks.co/eu-negotiators-want-to-hammer-out-crypto-bill-this-month/" target="_blank" rel="noreferrer noopener">MiCA (Markets in Crypto-Assets)</a> framework is approved by the EU, a Circle spokesperson responded, saying that EUROC will be initially issued “within the US regulatory perimeter, with euro-denominated reserves held by US-regulated financial institutions.”



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Circle’s New Euro-backed Stablecoin Mimics USDC

Ben Strack

<div id="highlights-block_6262d3d2466da" class="highlights">
 <ul>
 <li>Circle CEO says Stripe’s launch is an “indicator of things to come”</li>
 <li>Creator earnings will be paid into Polygon-compatible wallets like Metamask, Coinbase Wallet or Rainbow Wallet</li>
 </ul>
 
</div>



Payments company Stripe is now enabling crypto payments in USD Coin (USDC), and Twitter creators will be the first to use the service.



The process for fans and customers to pay creators, freelancers, sellers and &#8220;solopreneurs&#8221; can be difficult, especially outside of major markets, Stripe Product Manager Karan Sharma said in a Friday <a href="https://stripe.com/blog/expanding-global-payouts-with-crypto" target="_blank" rel="noreferrer noopener">blog post</a>.



“While the ‘store of value’ aspects of cryptocurrencies typically receive the most attention, we view the prospect of ‘open-access global financial rails’ as being at least equally compelling,” Sharma wrote.



The crypto payouts will be added to Connect, the payouts platform Stripe created in 2015. Businesses currently use Connect to programmatically send payouts to roughly 70 countries in local currencies.&nbsp;



A select group of creators on Twitter, Stripe’s first partner, will be able to use crypto-based rails to receive earnings from the social media platform. Twitter already uses Connect to pay creators though its <a href="https://media.twitter.com/en/articles/blogs/2021/be-the-first-to-try-ticketed-spaces-and-super-follows" target="_blank" rel="noreferrer noopener">Ticketed Spaces and Super Follows</a> products.



Payouts will first be supported in the USDC stablecoin via the Polygon PoS (MATIC) network, according to the company. Creator earnings will be paid into Polygon-compatible wallets such as Metamask, Coinbase Wallet or Rainbow Wallet, and creators can hold their earnings as USDC or convert them into a local currency.



Jeremy Allaire, the CEO of Circle — the firm behind USDC — said in <a href="https://twitter.com/jerallaire/status/1517489261192392704" target="_blank" rel="noreferrer noopener">Twitter posts</a> that the promise of digital currencies such as USDC has enabled anyone to easily receive payments anywhere in the world.



“Having one of the most important payments companies in the world adopting USDC is an indicator of things to come,” Allaire tweeted. “We<a href="https://twitter.com/circlepay"> </a>share their mission to grow the GDP of the internet, and believe USDC is going to become a key building block for internet commerce.”



Sharma said that Stripe plans to add additional rails and payout currencies over time and seeks to support crypto payouts in more than 120 countries by the end of the year.



Stripe <a href="https://cms.blockworks.co/stripe-jumps-back-into-crypto-providing-new-payment-options-for-consumers-and-companies/" target="_blank" rel="noreferrer noopener">announced partnerships last month</a> with FTX and Blockchain.com to offer support for exchanges, on-ramps, wallets and non-fungible token (NFT) marketplaces.



Stripe became the first major payments company to support bitcoin payments in 2014, but ended its support of the cryptoasset in 2018. “Bitcoin has evolved to become better-suited to being an asset than being a means of exchange,” <a href="https://stripe.com/blog/ending-bitcoin-support" target="_blank" rel="noreferrer noopener">Stripe wrote</a> at the time.



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Payment Company Stripe Enables Crypto Payouts in USDC

<div id="highlights-block_62559489d24e5" class="highlights">
 <ul>
 <li>Circle’s latest funding round is expected to close in the second quarter</li>
 <li>The raise comes as Congress starts to take a more critical look at the stablecoin industry</li>
 </ul>
 
</div>



Circle, one half of the <a href="https://www.centre.io/" target="_blank" rel="noreferrer noopener">Centre Consortium</a> behind stablecoin USDC, has announced a $400 million fundraise from firms including BlackRock, Fidelity Management and Research and Fin Capital.&nbsp;



BlackRock and Circle also revealed a new strategic partnership to focus on exploring capital market applications for USDC, the companies <a href="https://www.prnewswire.com/news-releases/circle-announces-400m-funding-round-301523647.html" target="_blank" rel="noreferrer noopener">said</a>. USDC, the second largest stablecoin in the world, currently has over $50 billion in circulation, Circle said.



&#8220;Dollar digital currencies like USDC are fueling a global economic transformation, and Circle&#8217;s technology infrastructure sits at the center of that change,” Jeremy Allaire, co-founder and CEO of Circle, said in a statement. “This funding round will drive the next evolution of Circle&#8217;s growth.”



The latest funding round comes as Circle executives continue to publicly plead with US regulators, who are starting to take a closer look at the rapidly growing stablecoin industry. Dante Disparte, chief strategy officer and head of global policy at Circle, appeared before the <a href="https://cms.blockworks.co/senators-cant-agree-on-path-for-stablecoin-regulation-during-hearing/" target="_blank" rel="noreferrer noopener">Senate Banking Committee</a> in December to defend USDC’s place in the global financial landscape.&nbsp;



Stablecoins play an essential role in deploying smart contracts, Disparte told senators, and will continue to be used in a host of industries. Without stablecoins, blockchain technology’s impact on innovation is limited, he noted.



“An open internet dollar functionally becomes one of the only missing links to enable [smart contracts] at scale,” Disparte said during the hearing. “We’re in the opening innings and when people say we have failed the financial inclusion test, the presumption is that the stablecoin has agency just as the dollar, and both are patently wrong.”&nbsp;



Circle’s General Counsel Flavia Naves has also been vocal about the need to create regulation that allows for innovation, arguing that the proposed rule to only allow banks to issue stablecoins will effectively end the industry.&nbsp;



“Trying to place the existing constructs of traditional banks on stablecoin issuers may have the effect of simply banning the entire industry altogether,” Naves said during a <a href="https://events.merklescience.com/stability-in-the-cryptosphere" target="_blank" rel="noreferrer noopener">virtual panel</a> discussion with Merkle Science in December. “I am sure this is not the desired intent of the regulators, but it may just go in that direction.” 



BlackRock’s participation in the funding round and strategic partnership is “particularly gratifying,” Allaire said, and will help to scale Circle as stablecoins start to play a larger role in the global economy.



BlackRock hired between 12 and 20 registered lobbyists and spent between about $1.8 and $2.7 million in each of the past five years to lobby the federal government, according to data from <a href="https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2018&amp;id=D000021872" target="_blank" rel="noreferrer noopener">OpenSecrets</a>.



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BlackRock, Fidelity Back USDC Issuer in $400M Raise

<div id="highlights-block_61b08d5a6c0b0" class="highlights">
 <ul>
 <li>Executives from Bitfury, Paxos, and Stellar Development Foundation will also testify at hearing of US House Committee on Financial Services</li>
 <li>Circle Co-founder Jeremy Allaire to recommend that “the US should aggressively promote the use of the dollar as the primary currency of the internet”</li>
 </ul>
 
</div>



Executives of some of the largest crypto companies in the world are set to testify before the US House Committee on Financial Services on Wednesday.



The hearing — called Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States — will feature testimony from FTX CEO Sam Bankman-Fried, Circle CEO Jeremy Allaire and Alesia Haas, the CFO of Coinbase Global.



<hr class="wp-block-separator"/>



The other crypto firm leaders set to testify include Bitfury CEO Brian Brooks, Paxos CEO Chad Cascarilla and Denelle Dixon, the chief executive of Stellar Development Foundation.Though some might interpret the invitation as US legislators taking a hostile approach towards digital assets, it should rather be seen as a positive signal, said Mikkel Morch, executive director at crypto hedge fund <a href="https://urldefense.proofpoint.com/v2/url?u=https-3A__ark36.com_about-2Dus_-23our-5Fteam&amp;d=DwMF-g&amp;c=sWW_bEwW_mLyN3Kx2v57Q8e-CRbmiT9yOhqES_g_wVY&amp;r=FUTyxn_53i67ILzDMW5BFG24i77vq3UgLHm1MQBAppk&amp;m=F2xft-K7lbChauYoIcnSMDrgQHVZWAilDTCEYvi8Lnk&amp;s=4TvW1zxaA07sth7ycoEiAHuILYioqhRAnu0CpSFeqrU&amp;e=" target="_blank" rel="noreferrer noopener">ARK36</a>.



“Cryptocurrencies have been on the radar of top US politicians for a long time now, yet the Congress hasn&#8217;t yet decided to take any substantial regulatory action towards it,” Morch said.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“One should hope the committee is a sign that US congressmen and congresswomen are willing to learn more about this burgeoning and extremely innovative market sector before taking any action that could potentially cripple it.”</blockquote>



Martha Reyes, head of research at digital asset prime brokerage and exchange <a href="https://urldefense.proofpoint.com/v2/url?u=https-3A__bequant.io_&amp;d=DwMF-g&amp;c=sWW_bEwW_mLyN3Kx2v57Q8e-CRbmiT9yOhqES_g_wVY&amp;r=FUTyxn_53i67ILzDMW5BFG24i77vq3UgLHm1MQBAppk&amp;m=F2xft-K7lbChauYoIcnSMDrgQHVZWAilDTCEYvi8Lnk&amp;s=dowhZcTdB6r7C_aqJIkkDmqvYIufW4NNrBpEaluPZDk&amp;e=" target="_blank" rel="noreferrer noopener">BEQUANT</a>, said in an email that it is key for politicians to understand the implications of any crypto-related laws they may enact. She added that the hope is that the US becomes the first major crypto-friendly economy.



Morch said he doesn’t expect the US to follow China’s approach to crypto. The People’s Bank of China (PBOC) <a href="https://cms.blockworks.co/bitcoin-breaks-below-30000-on-china-concerns/" target="_blank" rel="noreferrer noopener">told the country’s key financial institutions</a> in June to block all cryptocurrency transactions, and its regulators have intensified a ban on bitcoin in recent months.



But, Morch added, he believes there will be tighter regulation related to stablecoins, noting that it is becoming more likely that the US government will seek to “severely restrict” what entities will be able to issue stablecoins.



Circle launched its stablecoin, USD Coin (USDC), in September 2018.



“In a world where money becomes a core feature of the internet, the US should aggressively promote the use of the dollar as the primary currency of the internet, and leverage that as a source of national economic competitiveness, security and a major upgrade needed for more efficient and inclusive financial services,” Allaire, Circle’s co-founder, said in <a href="https://www.circle.com/blog/circle-ceo-to-congress-u.s.-at-pivotal-moment-on-digital-assets" target="_blank" rel="noreferrer noopener">a blog post </a>published Tuesday.&nbsp;&nbsp;



Allaire will also be speaking about the expanding use cases for stablecoins across both institutional and startup businesses, according to a Circle spokesperson, including small business payments, international low-cost, high-speed remittances and efficient payments for remote workers.



“Even though the road will be a long one, the sector is hopeful that these Congressional meetings will make a difference in the long term,” Reyes said. “While this continues, players in the industry such as ourselves must continue to act with clients&#8217; best interests at heart and aim to become recognized and regulated in other jurisdictions while the US decides how it will move forward.”



<hr class="wp-block-separator"/>



<h3 class="wp-block-heading">Watch Replay</h3>



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Blockchain Industry Executives Set to Testify Before Congress

Sam Reynolds

<div id="highlights-block_618baf7d2afdf" class="highlights">
 <ul>
 <li>Circle announced today that its building out its Asia hub in Singapore, in conjunction with the Monetary Authority of Singapore</li>
 <li>Circle began hiring across Asia earlier this year, as USDC gains marketshare against the dominant player, Tether</li>
 </ul>
 
</div>



Circle, the issuer of the USDC stablecoin, announced today that it has begun the process of establishing a regional hub in Singapore, working with the Monetary Authority of Singapore to acquire the required licenses to set up shop.&nbsp;



&#8220;You cannot build an always-on, global internet finance business without considering Singapore as a hub,&#8221; said Dante Disparte, Circle&#8217;s Chief Strategy Officer and Global Head of Policy.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">&#8220;The Monetary Authority of Singapore (MAS) has been an extraordinary regulatory partner as we have looked to expand our business horizons and invest in the Singaporean market.&#8221;</blockquote>



<div class="wp-block-image"><figure class="alignright size-thumbnail"><img decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/02/jeremy-allaire-150x150-1.jpg" alt="Jeremy Allaire" class="wp-image-2412"/><figcaption>Jeremy Allaire</figcaption></figure></div>



In a press release, Circle said it is looking for partners to experiment in stablecoin innovations in the Singapore market as part of a Lighthouse Project, with MAS observing and guiding project design.



&#8220;MAS has always been at the forefront of fintech innovation,&#8221; said Jeremy Allaire, Co-founder and CEO of Circle. &#8220;We are honored to work with MAS and look forward to collaborating with Singaporean businesses on our innovation initiatives.&#8221;



Circle started hiring for the hub earlier this year, as <a href="https://cms.blockworks.co/circle-hiring-in-asia-as-usdc-demand-grows/">Blockworks previously reported</a>. Within Asia, Stablecoin usage is notably high, with unregulated Tether making up most of the volume.&nbsp;



<h3 class="wp-block-heading">USDT vs USDC and the centralized stablecoin landscape</h3>



Recently, Aymeric Salley, the co-founder of StraitsX, which issues XSGD, a Singapore-dollar based stablecoin, <a href="https://cms.blockworks.co/a-majority-of-stablecoins-will-be-non-usd-says-straitsx-founder/">forecast</a> that in the future USD-issued stablecoins will eventually only represent 50% or less of the total stablecoin value in circulation. That being said, the market so far has <a href="https://cms.blockworks.co/singapore-strives-to-be-a-home-for-stablecoins-but-challenges-lie-ahead/">strongly signalled support</a> for USD-denominated stablecoins — or their proxies — given the US currency’s liquidity.



According to Coingecko, USDT today has a total market cap of <a href="https://www.coingecko.com/en/coins/tether" target="_blank" rel="noreferrer noopener">$74.7 billion</a>, compared to <a href="https://www.coingecko.com/en/coins/usd-coin" target="_blank" rel="noreferrer noopener">$34.5 billion</a> for USDC. Data analytics firm Nansen shows $4.8 billion of the USDT supply on the Binance exchange alone, while the balance of USDC on Binance is $3.2 billion. However, on decentralized exchanges, USDC has the edge, with $1.5 billion circulating within <a href="http://curve.fi">Curve Finance</a> and $950 million on <a href="http://uniswap.org">Uniswap</a>, compared with $978 million and $425 million for USDT respectively.



Binance’s native BUSD, which is administered by <a href="https://paxos.com/">Paxos</a>, is a distant third at $13.1 billion, however Nansen shows that nearly 98% of that supply is on Binance itself, where many digital assets trade against BUSD.



Macauley Peterson contributed reporting.



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