Binance co-founder Changpeng “CZ” Zhao backed crypto license passporting across ASEAN, arguing that firms regulated in one market should be able to enter others through a simplified approval process rather than applying from scratch.

Speaking Tuesday during the “One ASEAN, One Digital Economy” fireside chat at the ASEAN Tech Summit Manila 2026, Zhao backed an idea raised by FinTech Alliance PH founding chair Lito Villanueva for regulatory passporting or license portability. Zhao said regulators could still review applicants but should not require them to complete another full licensing application from scratch.

A regional licensing framework could reduce compliance costs, encourage competition and make it easier for crypto and stablecoin services to operate across ASEAN’s fragmented regulatory markets. Member states regulate digital assets separately, creating multiple approval processes for companies seeking a regional presence.

“I think that’s mostly a political problem,” Zhao said of cross-border coordination, adding that the technology was simple. He said allowing more licensed platforms to compete could improve services and lower costs for consumers.

Binance co-founder Changpeng Zhao (left) with FinTech Alliance PH founding chair Lito Villanueva (right) at the ASEAN Summit in Manila. Source: Aubrey Paller

ASEAN has precedents for regional passporting

ASEAN does not currently have a bloc-wide passport for crypto companies, but regional regulators have created streamlined cross-border arrangements elsewhere in finance.

The ASEAN Capital Markets Forum’s (ACMF) operates the Collective Investment Schemes Framework, which allows a fund authorized in its home jurisdiction to be offered in participating host jurisdictions through a streamlined authorization process. The framework was first operationalized in Malaysia, Singapore and Thailand in 2014, while the Philippines joined in 2021, according to the ACMF. 

The forum also introduced the ACMF Pass under its Professional Mobility Framework. The arrangement lets eligible investment advisers licensed in one participating jurisdiction receive fast-track registration to provide advisory services in another without obtaining another license.

Related: Philippine bank BPI plans stablecoin payments pilot

These programs are narrower than the passporting idea Villanueva raised and Zhao supported, and remain subject to host-market requirements, but they show that ASEAN regulators have previously used mutual recognition and simplified approvals to deepen integration.

A direct crypto comparison exists in the European Union. Under the Markets in Crypto-Assets Regulation, an authorized crypto-asset service provider can use passporting rights to provide services across EU member states after notifying its home regulator of the countries and services involved.

Zhao said differences in national policies and regulatory approaches make alignment harder than building common technical rails. Still, he argued that firms already licensed in one market should face a lighter application process when entering another ASEAN jurisdiction.

Magazine: Inside the ‘fake police raid’ that forced a $1M Bitcoin transfer

A US exchange can list a new prediction market by filing a form saying the contract complies with the law, and start trading the next day. No approval required.

Behind that speed sits a trapdoor written into Dodd-Frank, three undefined words, and a rulemaking the CFTC opened this June to finally settle what they mean.

The most useful sentence ever written about prediction markets is that a contract trading at 70 cents implies a 70% probability, and the most useful next sentence is that this is an approximation with known, measurable errors. Both halves matter. The first is why journalists, analysts, and increasingly institutional data buyers treat these prices as forecasts: the mapping is real, and the empirical record supporting it is better than most critics assume. The second is why traders who read the price as literal truth lose money in patterned, predictable ways. Research covering hundreds of thousands of settled contracts across the largest venues now supports a precise account of where the mapping holds and where it bends, and the answer is not that markets are wrong but that a price is a market-clearing number produced by capital under constraints, not a probability produced by an oracle. This guide walks the evidence: the calibration record, then the five distortions, then how to read a price properly.

The mapping, and why it mostly works

Start with the good news, because it is stronger than the skeptical framing usually allows.

Calibration studies plot implied probabilities against realized frequencies: take every contract that traded at roughly 30 cents, check how often those events actually happened, and see whether the answer is close to 30%. Across large samples of settled markets, the resulting curve tracks the ideal diagonal closely. One analysis of thousands of markets on the largest regulated venue found overall accuracy above 90% across probability ranges, with the curve hugging the diagonal and no evidence of gross systematic error. Academic work examining more than 300,000 contracts reached a compatible conclusion: prices are informative, and they improve as markets approach settlement, which is exactly what an efficient information aggregator should do as uncertainty resolves.

Comparisons to alternatives are the second part of the case. Aggregated market prices have generally outperformed individual expert forecasts, single polls, and simple statistical models, because the mechanism rewards being right with money and punishes confident error, which is a stronger incentive structure than reputation. Market efficiency has also been improving as the sector grows: spreads on the leading venue compressed sharply as volume expanded, which mechanically improves price quality. For context, crypto.news has explained where the liquid markets live and why the venue structure matters for market quality.

So the base case is that these prices deserve to be taken seriously as probability estimates. The rest of this guide is about the five ways they deviate, each of which is measurable and each of which points the same direction: the deviations mostly hurt the participant who reads the price naively.

Delphi Digital analysts have renewed a debate over whether crypto tokens and company equity can share value without creating conflicting claims. 

During a July 15 roundtable, analyst Ceteris said token market capitalisations should usually remain below the value assigned to the related company because equity holders normally receive most business profits. 

Delphi released the discussion under the title “Are Crypto Tokens Fundamentally Broken?”. The episode covered Grass, Venice and other projects where a private company operates alongside a publicly traded token. 

Equity carries clearer rights to company profits

Equity gives shareholders an ownership interest in a company. Investor.gov states that stock represents a proportional claim on a corporation’s assets and profits. Common shareholders may also vote on company matters and receive dividends when directors approve them.

A crypto token may carry different rights. Some provide network access, rewards or governance votes. Others support staking, fee discounts or payments. Holding a token does not automatically give its owner a legal claim on company revenue, assets or sale proceeds. The rights depend on the project’s documents, contracts and legal structure.

Ceteris argued that this difference should restrain token valuations when a project also has equity investors. He said most “actual cash profits” ultimately flow to shareholders. The token’s market capitalisation “should generally be smaller” unless the project has a clear system that sends value to holders.

Ambiguity can support inflated token valuations

Ceteris said problems arise when projects leave the boundary between tokens and equity unclear. A company may market the token as the centre of an ecosystem while keeping revenue, intellectual property, customer contracts and sale rights inside the equity entity. Token buyers may then price the asset as though it captures the full business.

This setup creates groups with different interests. Equity holders may want the company to retain profits, raise capital or pursue a sale. Token holders may prefer fee sharing, buybacks, burns or stronger onchain governance. Management must decide which side receives value from the product.

The Delphi episode used Grass and Venice as examples. It did not claim every dual structure will fail. The speakers focused on whether projects disclose where revenue goes and whether token holders have enforceable or programmatic economic rights.

Governance alone may not solve the issue. As crypto.news explains in its governance-token guide, holders can vote on protocol proposals, but each project defines what those votes control. A token may govern incentives or technical updates without controlling the company that owns key software and commercial agreements.

Strong markets can hide structural weakness

Delphi Digital co-founder Yan Liberman said tokens may still perform when market conditions remain strong. Rising liquidity can lift prices even when a token’s link to revenue remains limited. Traders may focus on user growth, listings or market narratives instead of cash-flow distribution.

However, Liberman said the structure can weaken when business conditions deteriorate or shareholders seek an exit. A sale may transfer the operating company, brand or intellectual property to a buyer while leaving token holders outside the deal. The outcome depends on agreements linking the company and network.

The risk can also emerge when revenue falls. Equity investors hold formal claims within the corporate structure, while token support may depend on company decisions or governance votes. A project can reduce incentives, delay buybacks or change utility unless binding rules prevent those changes.

Equity also carries risks, including dilution, bankruptcy and operating losses. Tokens may offer global liquidity and transparent onchain systems. Delphi’s argument centred on pricing those different rights accurately rather than treating both assets as equal claims.

Projects test clearer token value accrual

Several crypto projects now use revenue-linked systems to narrow the gap. Buybacks use protocol income to purchase tokens. Burns permanently remove tokens from circulation. Fee sharing sends part of network revenue to eligible participants. Each model creates a clearer connection between activity and token economics.

As crypto.news reported, Hyperliquid has routed trading revenue into HYPE purchases through its Assistance Fund. The mechanism had used more than $1.16 billion in fees for token purchases by May 2026.

Meanwhile, Jito proposed using DAO revenue for JTO buybacks and permanent burns. The proposal would direct its share of JTX revenue toward the token mechanism through at least the fourth quarter of 2027.

Similarly, Uniswap’s fee programme converts protocol income into UNI burns across supported networks. The system links protocol fees with token supply reduction instead of sending dividends directly to holders.

These systems do not turn tokens into equity. Holders may still lack claims on company assets, dividends or acquisition proceeds. Still, automated and disclosed mechanisms make token demand easier to measure through revenue, buyback volume, supply changes and governance controls.

The Delphi roundtable called for lower expectations when those links remain weak. Its central test asks which asset receives the cash generated by the business. When equity captures income and the token relies mainly on market demand, assigning both similar valuations may overstate the token’s economic position.

South Korean crypto exchange Upbit announced trading support for Ripple USD on July 28, adding RLUSD pairs against the Korean won, 

Bitcoin and USDT. Trading was scheduled to begin at 2:00 p.m. Korea Standard Time, subject to the exchange securing sufficient liquidity.

Deposits and withdrawals were due to open within two hours of the announcement. Upbit limited transfers to the XRP Ledger version of RLUSD, excluding the token’s Ethereum and other supported-network versions.

The European Securities and Markets Authority has added 15 crypto-asset service providers to its interim Markets in Crypto-Assets register.

The additions lifted the list to 309 distinct authorised providers, based on the latest register file dated July 23 and published through ESMA’s MiCA page on July 24.

The new entries include BNY SA/NV, the Belgian banking subsidiary of U.S. financial services group BNY. The National Bank of Belgium authorised the unit on July 20 for crypto-asset custody and transfer services.

BNY joins banks and payment firms on the register

BNY SA/NV joins the MiCA register as traditional banks expand their regulated digital-asset operations in Europe. BNY describes itself as a global financial services platform. It reported $62.6 trillion in assets under custody or administration as of June 30. Its Belgian subsidiary already serves as a major European custody bank.

Three German cooperative banks also appeared among the new entries. They were Raiffeisenbank Falkenstein-Wörth, Spar- und Kreditbank Rheinstetten and VR-Bank Augsburg-Ostallgäu. Germany also added JT Technologies, taking the country’s total for this update to four rather than three.

The register also added BitPay B.V. in the Netherlands and Coinify ApS in Denmark. Both companies provide digital payment services. Denmark’s other additions were SafeLynx Technologies and Januar, which provides payment and banking infrastructure for digital-asset companies.

ESMA adds providers from eight European jurisdictions

The 15 additions came from eight jurisdictions. Germany led with four entries, followed by Denmark with three. Bulgaria and Latvia each added two providers. Belgium, Cyprus, Liechtenstein and the Netherlands each contributed one.

Bulgaria’s entries were Altcoins BG and Digital Assist. Latvia added Bleap and Nodu Digital. The remaining providers were Damoon Technology Europe in Liechtenstein and SG Digital Assets in Cyprus. ESMA’s register lists each firm with its national regulator, approval date and permitted services.

The published CSV contains 312 rows, but some firms appear more than once. A register comparison by NorthPoint counted 309 distinct entity-and-regulator pairs. This explains why some trackers may show a higher total when they count authorisation records instead of separate providers.

MiCA register expands after July transition deadline

The update followed the end of the European Union’s MiCA transition period on July 1. Companies that previously operated through national registrations must now hold a CASP authorisation for covered services or take steps to stop those activities. ESMA says national regulators supply the register data and that it republishes the files weekly.

A MiCA authorisation granted by one national authority can support cross-border services after the required passporting process. However, approval only covers the services listed for that provider. BNY’s entry covers custody and administration of crypto-assets and transfer services on behalf of clients. It does not list exchange or trading-platform operations.

As crypto.news previously reported, ESMA added 14 providers in the prior update, taking the register to 294. That group included Ripple Payments Europe, Portugal’s Bison Bank and Hrvatska poštanska banka in Croatia. Ripple said its Luxembourg authorisation supported regulated payment services across Europe.

Related coverage also reported that MiCA’s July deadline changed market access for firms that had not completed licensing. Some providers restricted new accounts or adjusted European services, while authorised companies began competing for customers moving to regulated platforms.

Compliance costs remain a concern for licensed firms

The rising CASP count shows that national authorities continue processing applications after the transition deadline. It does not show how quickly each provider will launch services or whether every authorised business can support the long-term cost of compliance.

Gate Europe chief executive Giovanni Cunti recently warned that some licensed firms may “not be capable to sustain the cost and the resources” needed over time. He said the framework creates a smaller regulated market, while ongoing staffing, reporting, security and capital requirements may remain difficult for some operators.

ESMA’s register serves as a public record of authorisation, not a rating of a company’s financial strength or service quality. The regulator also notes that register information may not appear immediately because national authorities first send the data to ESMA.

The addition of BNY and three German banks adds more traditional finance names to the MiCA system. At the same time, the new group includes payment companies, infrastructure providers and smaller crypto businesses. Future weekly files will show whether the number of authorised providers continues rising after the July 1 deadline.

Every legal event contract in America is listed by a designated contract market, a federal exchange license created for grain futures and now the most sought-after permission slip in crypto. Here is what a DCM actually is, what its holder must do, why the licenses have been changing hands, and what the status does and does not protect.

The single most consequential fact about prediction markets in the United States is one almost nobody outside compliance departments can name: the specific federal registration that makes them legal. It is called a designated contract market, abbreviated DCM, and it was designed for exchanges trading futures on physical commodities. Nothing about grain or crude oil anticipated a contract on which party controls the Senate, yet the same registration category now underpins the entire American event-contract industry, from Kalshi’s political markets to the World Cup contracts routed through a Robinhood-affiliated venue. Understanding what a DCM is explains a great deal that otherwise looks arbitrary: why some platforms can serve US retail customers and others cannot, why exchanges have been bought rather than built, why the CFTC keeps addressing exchanges instead of traders, and what protection the license actually confers on someone with money at risk.

What the license is

A designated contract market is a board of trade, in the statute’s antique phrasing, that operates under CFTC oversight pursuant to Section 5 of the Commodity Exchange Act, with the detailed requirements set out in Part 38 of the Commission’s regulations.

Two features define it. First, breadth of product: a DCM may list futures and options contracts on all types of commodities, a category federal law defines expansively enough to include interest rates, indices, digital assets, and the occurrence of events. Second, breadth of access: a DCM may admit all types of traders, including retail customers, which is the property that matters most for this industry. Certain instruments, notably swaps, are generally off-limits to non-professional participants unless executed on a DCM, so the license is the mechanism by which ordinary people gain lawful access to products otherwise restricted to institutions.

Registration is not a one-time approval. A DCM must comply at all times with 23 core principles written into the statute, covering prevention of market manipulation, trade surveillance, position limits, financial integrity of transactions, protection of market participants, recordkeeping, and the operation of a credible self-regulatory program. The Commission’s Division of Market Oversight examines compliance through periodic rule enforcement reviews, which are exactly what the name suggests: audits of whether the exchange is enforcing its own rulebook.

The three-license structure

A DCM registration on its own does not produce a functioning market, and the reason clarifies most of the corporate activity in this sector.

Three categories divide the regulated derivatives stack. Futures commission merchants act as brokers, soliciting and accepting customer orders and holding customer margin in segregated accounts. Designated contract markets are the exchanges where contracts are listed and matched. Derivatives clearing organizations are the clearinghouses that guarantee trades, manage margin, and stand between counterparties to absorb default risk. Every contract a DCM lists must clear through a registered DCO, which means an exchange without clearing access is an exchange that cannot operate.

The separation is deliberate, designed to limit conflicts of interest by keeping the party that brokers orders, the party that matches them, and the party that guarantees them distinct. In practice the largest operators assemble more than one registration, which is why announcements of a firm obtaining its full set of licenses represent genuine capability expansion and not paperwork. It also explains why the assets changing hands in this sector tend to be exchange-and-clearinghouse pairs: buying only half the stack leaves the buyer dependent on someone else for the other half.

Why the license became valuable

For most of its history the DCM category was unglamorous infrastructure. Prediction markets changed that, and the sequence is worth following.

Kalshi obtained DCM designation in 2021, the first purpose-built prediction market to do so, and registered an affiliated clearinghouse in 2024, giving it the complete stack. That combination is what allowed a startup to offer federally regulated event contracts to American retail customers, and it converted regulatory status into the company’s primary competitive asset. As the category grew, the CFTC saw a marked increase in DCM applications from firms focused on prediction markets, enough that the Commission issued an advance notice of proposed rulemaking in March 2026 partly in response. A crypto-native exchange entity affiliated with Gemini was certified as a DCM, a notable expansion of the Commission’s willingness to license firms originating in digital assets, though the entity operates as a centralized venue with conventional clearing, fiat collateral, and standard identity checks. Crypto.com’s derivatives arm assembled the full complement of registrations. Interactive Brokers built ForecastEx.

And then came the transaction that revealed the license’s true nature as an asset: Robinhood, alongside Susquehanna International Group, acquired an existing CFTC-licensed exchange and clearinghouse, previously operating under other names, and rebranded it. That is the license changing hands. The regulatory standing that Kalshi spent years and litigation securing was, for a well-capitalized buyer, available for purchase. The Commission’s own rules even contemplate this pathway, with procedures for reinstating dormant contract markets that have stopped listing products. A license is a durable, transferable good, and the industry learned that lesson in public.

The frontline regulator burden

The obligation that shapes daily practice most is Core Principle 3, which requires a DCM to ensure the contracts it lists are not readily susceptible to manipulation and to conduct surveillance of trading in them.

The Commission spelled out what that means for event contracts in a March 2026 advisory addressed to DCMs, reminding them that these products sit fully under the Commodity Exchange Act and Part 38, pointing to Appendix C as the guide for listing and surveillance, and stating plainly that exchanges are the frontline regulators of their own markets. The advisory flagged sports and similar real-world contracts as higher risk, signaling that venues listing them face a higher bar to show the products are not gambling in substance, and it told exchanges to reassess compliance continuously as volumes and product complexity grow.

The practical translation is that a DCM is not merely a permission to list. It is an obligation to police: to vet whether each contract’s resolution criteria and underlying market can be manipulated, to monitor trading for abuse including by participants with non-public information, to enforce its rulebook against its own customers, and to document all of it for examination. The surveillance and enforcement programs that prediction market venues have been publicizing, screening tools blocking candidates from trading their own races, integrity vendors flagging athletes and officials, in-app reporting for suspicious activity, are core-principle compliance made visible, undertaken by exchanges that answer for their markets’ integrity in a way no offshore venue does.

How a firm actually gets one

The pathway matters, because the choice between applying and acquiring has shaped the competitive landscape more than any product decision.

The application route runs through Part 38 of the Commission’s regulations, with the criteria and procedures set out in the Commodity Exchange Act and elaborated in appendices providing guidance to applicants. A prospective DCM must show, in detail and in advance, how it will satisfy each core principle: the design of its contracts and why they resist manipulation, its trade surveillance systems and the staff running them, its rulebook and disciplinary procedures, its financial resources, its technology and system safeguards, its recordkeeping, its emergency authority, and its governance including conflict-of-interest arrangements. The submission is a description of an operating exchange written before the exchange operates, and the Commission reviews it against a statutory clock while asking questions. Firms in this space have described the process as measured in quarters, not weeks, and it consumes senior legal and compliance capacity throughout.

The acquisition route is faster and increasingly common. Licenses attach to entities, so buying the entity conveys the standing, subject to the Commission’s review of the change in control and continued compliance. The Commission’s rules also address contract markets that have gone dormant, meaning they hold designation but have stopped listing products: a dormant DCM must apply for reinstatement before listing or relisting, though the application may rely on previously submitted materials that still accurately describe conditions. That provision is the formal basis for what the market saw this year, when a licensed exchange and clearinghouse that had passed through multiple owners and business models was acquired and relaunched under a new name and a new strategy. The regulatory achievement of one era becomes the acquisition target of the next.

The strategic consequence deserves to be stated plainly, because it cuts against the intuition that regulation protects incumbents. In this category, the license is a purchasable input with a market price, and the durable advantages sit elsewhere: in distribution, in liquidity relationships, in brand, and in the compliance organization that keeps a venue in good standing once it has one. A startup that treats its DCM registration as its moat has misidentified its asset, and the events of this year in prediction markets are the demonstration.

What the license does and does not protect

For a participant deciding where to trade, the honest accounting has two columns.

What DCM status provides: a federally supervised venue subject to examination; contracts cleared through a registered clearinghouse that guarantees performance and manages default risk; customer funds held under the segregation rules applying to regulated derivatives intermediaries; exchange rules the venue is obliged to enforce; a surveillance program with a regulator checking that it functions; and a defined complaint and enforcement path when something goes wrong. Against an unlicensed offshore book, that is a substantial difference in kind.

What it does not provide: any guarantee that a contract is a good trade, any protection against losing the amount staked, any assurance that a market will resolve the way an ordinary reading of events suggests, or any immunity from the legal turbulence around the category. A DCM’s contracts remain subject to the Commission’s authority to review and prohibit products involving certain enumerated activities, state gaming regulators continue to contest sports contracts regardless of federal registration, and pending federal legislation could remove entire product categories from licensed venues. Registration answers the question of whether the venue is lawful. It does not answer whether the product will still be listed next year, which is the live question in this category and the reason product availability should be treated as provisional.

U.S. District Judge Analisa Torres denied KalshiEX’s request for an emergency injunction pending appeal on July 27 in KalshiEX LLC v. Williams. 

The Southern District of New York also rejected Kalshi’s alternative request for short-term administrative relief. The three-page order does not dismiss Kalshi’s appeal or resolve the underlying lawsuit. It only denies protection from New York enforcement while the appellate dispute continues.

Kalshi appealed after Torres denied its preliminary-injunction motion on July 7. That earlier ruling found that the Commodity Exchange Act likely does not preempt New York gambling laws as applied to Kalshi’s sports-event contracts. The appeal was filed with the Second Circuit as case number 26-1835.

Kalshi emergency injunction failed a higher legal test

An injunction pending appeal requires a stronger showing of likely success than an ordinary preliminary injunction. Torres said Kalshi had not met any of the four factors in the earlier proceeding and had not identified unusual circumstances that justified reversing that result.

Kalshi argued that it faced a choice between violating New York law or complying with the state and risking its federal registration. Torres found the alleged registration risk speculative. She also said the expected compliance costs were largely monetary and generally did not qualify as irreparable harm.

The CFTC proposal did not bind the court

Kalshi pointed to the CFTC’s June proposed rule, which states that the Commodity Exchange Act expressly preempts state laws regulating transactions on CFTC-registered exchanges. The Commission also proposed standards for reviewing event contracts involving gaming, unlawful conduct, war, terrorism and assassination.

Torres did not invalidate or formally reject the proposed rule. Instead, she said courts must independently interpret statutes under the Supreme Court’s Loper Bright decision. She maintained her earlier view that the Commodity Exchange Act does not displace every state gambling law governing transactions involving swaps. The proposal’s public-comment period closed on July 27, but it is not a final rule.

A separate Second Circuit request remains unresolved

The district-court denial is separate from Kalshi’s emergency request at the Second Circuit. New York regulators urged the appeals court on July 27 to deny that request. As of the latest available reporting, no Second Circuit order resolving the emergency motion had been published.

The appellate court can now decide whether to grant temporary relief and later review Torres’s July 7 preemption analysis. The underlying lawsuit has not been finally decided. As previously reported, the July 7 ruling left New York free to apply its gambling laws unless an appellate court intervenes.

Conflicting rulings leave prediction-market law unsettled

Federal courts have reached different conclusions on the jurisdiction question. In April, the Third Circuit ruled 2-1 that New Jersey could not regulate Kalshi’s sports-event contracts because they fell within the CFTC’s exclusive jurisdiction. Courts in New York and several other states have taken a narrower view of federal preemption.

The split widened on July 27 when a Minnesota federal judge temporarily blocked that state’s direct prediction-market ban. The judge found that several Kalshi and Polymarket contracts likely met the federal definition of swaps, while warning that later relief could cover fewer products. In related coverage, crypto.news examined the platforms’ widening state-by-state legal battle.

Kalshi has also faced restrictions elsewhere. Washington judge blocked its sports contracts under state gambling law. The CFTC, meanwhile, has sued multiple states and continues to argue that federally registered exchanges should operate under one national derivatives framework.

The next immediate event is the Second Circuit’s decision on Kalshi’s emergency motion. After that, the court will consider the merits of the appeal, including whether New York’s laws are preempted. The CFTC may also revise or finalise its prediction-market proposal after reviewing comments, but it has announced no deadline for a final rule.

The stablecoin market contracted in June 2026 even as transaction activity reached a record.

CoinDesk Data reported on July 6 that market capitalization fell 2.39%, or about $7.7 billion, to $312 billion. It was the first month-end decline in five months and the largest monthly dollar reduction since the Terra-Luna collapse in May 2022.

The supply decline did not produce a matching fall in on-chain activity. Visa’s Allium-powered dashboard recorded $1.79 trillion in adjusted transaction volume for June, up 63% from May and 125% from June 2025. USDC accounted for about $1.21 trillion, compared with roughly $576 billion for USDT.

As previously reported, the market had fallen roughly $10 billion below its May peak by mid-July. DefiLlama’s stablecoin dashboard placed total capitalization at about $309.9 billion on July 28, down 0.79% over 30 days. USDT remained the largest token at roughly $183.9 billion, while USDC stood near $73.7 billion.

The stablecoin market decline was modest, not Terra-like

The phrase “biggest drop since Terra” describes the dollar amount of the June decline, not the severity of the event. A 2.39% monthly contraction was far smaller than the 2022 collapse. CoinGecko found that the leading stablecoins lost $33.9 billion, or almost one-fifth of their value, during the second quarter of 2022 as UST failed and wider crypto credit markets broke down.

June 2026 also lacked the defining feature of the Terra crisis: a major market-wide depeg. DefiLlama showed both USDT and USDC trading close to $1 on July 28. The contraction occurred through lower circulating supply rather than a comparable collapse in token prices.

Data providers report different totals because they track different assets and apply different classification rules. CoinDesk Data measured the market at $312 billion at the end of June. CoinGecko’s Q2 industry report put the quarter-end total at $305.1 billion and reported a $4.8 billion, or 1.6%, quarterly decline. CoinGecko described it as the first quarterly contraction since Q3 2023.

That distinction makes the claim that the market shrank “for the first time in four years” too broad. CoinDesk Data recorded the first monthly decline in five months, while CoinGecko recorded the first quarterly decline since Q3 2023. Both datasets show a pullback, but neither supports treating June as the first contraction of any kind since Terra.

Record volume shows faster turnover, not only payments

Visa’s adjusted transaction figure is more useful than raw blockchain volume, but it is not a pure payments measure. The dashboard removes known bot activity, intra-exchange transfers, redundant smart-contract movements and wallets that cross high-frequency or high-volume thresholds. It also counts only the largest stablecoin amount transferred within a complex transaction.

However, Visa’s adjusted categories still include exchange deposits and withdrawals, decentralized exchange trades, lending, investment funds, minting and burning, and on- and off-ramp activity. The $1.79 trillion total therefore measures filtered economic movement. It should not be described as $1.79 trillion of purchases, remittances or merchant settlement.

The June data still show a clear divergence between supply and usage. USDC moved about $1.21 trillion despite having less than half USDT’s circulating supply. USDT handled roughly $576 billion while remaining the larger token by market capitalization. As previously reported, USDC has built a sustained lead over USDT in adjusted transfer value.

A smaller float can support greater volume when each token changes hands more often. June’s record, combined with lower supply, is consistent with rising turnover. It does not identify who sent the money, why it moved or whether the activity generated payment revenue.

A separate McKinsey and Artemis analysis shows the measurement gap. The firms estimated identifiable stablecoin payments at about $390 billion during 2025, or roughly 0.02% of global payment volume. B2B payments accounted for about $226 billion, while much of the wider on-chain total came from trading, internal transfers and automated activity. Stablecoin usage is growing, but filtered blockchain movement and real-world payments remain different datasets.

Yield products may explain only part of the shift

The expansion of tokenized Treasury products offers a plausible destination for some capital leaving non-yielding stablecoins. RWA.xyz placed tokenized U.S. Treasury value at about $16.2 billion in late July. DefiLlama listed Circle’s USYC near $3 billion and BlackRock’s BUIDL near $2.64 billion on July 28.

The rotation argument has an economic basis. Payment stablecoins aim to maintain a fixed value and generally do not pass reserve income directly to holders. Tokenized Treasury funds can provide exposure to short-term government debt while remaining on-chain. Treasurers may therefore hold idle balances in yield products and convert into stablecoins nearer to settlement.

Still, public data do not prove that the full $7.7 billion decline moved into tokenized funds. Aggregate growth cannot trace every subscription. Capital may also have returned to bank deposits, funded crypto sales, moved between excluded categories or left digital-asset markets.

CoinDesk Data found that total tokenized asset capitalization rose 1.75% to $30.1 billion in June while stablecoin supply fell. That supports a broader shift toward tokenized financial products, but it does not establish a direct one-for-one transfer.

CoinGecko also found that some yield-linked crypto dollars contracted during Q2. USDS fell 16.4%, while USDe declined 24.4%. CoinGecko attributed the reductions partly to yields falling below the risk-free rate and users unstaking related products. The evidence points to selective rotation rather than a uniform move into yield.

U.S. rules and July issuance will shape the next move

The regulatory backdrop remains unfinished. The GENIUS Act was enacted on July 18, 2025 and created a federal framework for payment stablecoin issuers. The Office of the Comptroller of the Currency’s proposed rules cover reserves, redemption, risk management, reporting, custody and supervision.

The law is scheduled to take effect on January 18, 2027, or 120 days after federal regulators issue final implementing rules, whichever comes first. Regulators had not completed the full rulebook by July 28. As crypto.news reported, the one-year rulemaking deadline passed with multiple proposals awaiting final action.

One live deadline concerns customer identification. A joint federal proposal would require permitted payment stablecoin issuers to establish risk-based procedures for identifying and verifying customers. Comments are due by August 21, 2026.

The FDIC also issued proposed reporting forms on July 17, with comments due 60 days after publication in the Federal Register. These filings would establish regular financial and operational reporting for payment stablecoin issuers under FDIC supervision.

These rules may change where stablecoins are issued and held. They can also affect competition between U.S.-oriented products such as USDC and offshore-focused products such as USDT. In related coverage, industry groups disputed whether proposed rules extend yield restrictions too far toward third-party reward programmes.

The next evidence will come from issuer mint-and-burn data, month-end supply, peg stability and adjusted transaction volume. A return to net issuance would support the view that June was temporary. Continued redemptions would point to a longer contraction in on-chain dollar liquidity.

June supports two conclusions at once. Stablecoin supply weakened, but the remaining tokens moved at a record adjusted rate. Market capitalization measures the size of the float, while adjusted volume measures how actively it circulates. Neither metric can replace the other.

Kraken parent Payward entered a definitive agreement on July 27 to acquire Magic Labs’ wallet-as-a-service business through an asset purchase.

The financial terms were not disclosed, and the companies expect the transaction to close within several weeks, subject to customary closing conditions.

The deal covers Magic’s embedded, non-custodial wallet infrastructure rather than the entire company. Magic Labs has rebranded as Newton Labs and will remain independent while concentrating on Newton Protocol, its policy and authorisation system for onchain transactions.

Payward adds embedded wallets to its B2B platform

Payward plans to integrate Magic’s technology into Payward Services, its infrastructure platform for banks, fintech companies, exchanges and onchain applications. The existing platform provides trading, custody, tokenised assets, derivatives and fiat-to-crypto payment services through one integration.

Magic adds a wallet layer to that product range. Its stack combines a trusted execution environment-based signing system, an embedded integration layer and a developer software development kit. Payward said partners will be able to add self-custody wallets without managing several separate infrastructure providers.

The companies describe the wallets as non-custodial, meaning users retain control of their assets rather than placing them directly under Payward’s custody. However, the exact user experience and supported networks may vary between businesses using the infrastructure.

Magic wallet customers will move to Payward Services

Magic’s wallet infrastructure has powered more than 60 million wallets and over $10 billion in stablecoin volume. It has also served more than 200,000 developers since the company began operating in 2018, according to the acquisition announcement.

Newton Labs CEO Sean Li said existing wallet customers would begin receiving service from Payward on August 1. He said current integrations would continue without interruption and customers would not need to take action. The legal completion of the acquisition, however, remains subject to the stated closing conditions.

Magic had previously raised more than $80 million. That total included a $52 million strategic round led by PayPal Ventures in May 2023, with participation from Cherubic, Synchrony, KX, Northzone and Volt Capital.

Newton Labs will concentrate on transaction policies

Newton Labs will now focus on Newton Protocol, which entered mainnet beta on June 23. The protocol checks whether transactions comply with predefined security, identity, compliance and risk rules before they settle onchain. It then generates a cryptographic record of the policy decision.

Its first product, VaultKit, allows decentralised finance vault operators to apply policy checks to management actions. Newton said the software currently supports Ethereum and Base, with integrations involving risk, price and security providers including RedStone, Credora, Webacy and Chainalysis Hexagate.

Newton intends to expand the system beyond vaults to stablecoins, tokenised real-world assets and automated financial agents. Those plans remain company targets rather than completed product launches.

The acquisition extends Payward’s infrastructure push

The Magic agreement follows several acquisitions intended to broaden Payward beyond Kraken’s spot exchange business. As previously reported, Payward completed its purchase of CFTC-regulated derivatives firm Bitnomial in May after announcing a deal worth up to $550 million.

Payward also completed its acquisition of Hong Kong stablecoin payments company Reap in July. In related coverage, the transaction was initially valued at $600 million and added card issuance, cross-border settlement and stablecoin payment infrastructure to Payward Services.

The company previously bought retail futures platform NinjaTrader for $1.5 billion in 2025 and tokenised securities provider Backed Finance for an undisclosed amount. Together, the deals expand Payward’s coverage across trading, wallets, payments, custody, derivatives and tokenised assets.

No verified market reaction accompanied the Magic announcement because Payward and Newton Labs are privately held, while the acquisition does not involve a publicly traded token. The next confirmed steps are completion of the asset purchase, customer migration and integration of Magic’s wallet technology into Payward Services.