Banks are approaching stablecoins cautiously despite rapid market growth, reflecting early-stage strategy and rising structural concerns, according to a report by S&P Global Market Intelligence.

According to the Wednesday report, the question is no longer whether stablecoins will endure, but how they will reshape business models, infrastructure and revenue, For banks, the trade-offs are sharp, spanning deposit risk, modernization costs and new competition.

A wait-and-see stance still dominates. S&P Global’s Q1 2026 U.S. Bank Outlook survey found just 7% of 100 mostly smaller institutions are developing frameworks, with none actively piloting, underscoring how exploratory strategies remain.

“Most financial institutions remain early and cautious,” said Jordan McKee, director of fintech research at S&P Global Market Intelligence, in emailed comments. “Our survey of U.S. banks shows that stablecoin strategy is still largely exploratory, with limited internal development and no active pilots among smaller institutions.”

Stablecoins, digital tokens pegged to assets like fiat currencies or commodities, have become a core layer for payments and settlement in crypto, widely used in trading and cross-border flows. The market is dominated by Tether’s USDT, followed by Circle Internet’s (CRCL) USDC.

The stablecoin market has grown rapidly into a roughly $300 billion-plus sector, with total market capitalization surpassing $316 billion in early 2026 after nearly doubling since 2023, according to multiple data sources.

Transaction volumes have also surged into the tens of trillions annually, underscoring rising use in trading, payments and cross-border transfers, while forecasts point to continued expansion, potentially reaching $500 billion or more in the near term as institutional adoption accelerates.

Pressure is building. The report pointed to growing concern over deposit cannibalization and customer migration, alongside a surge in stablecoin mentions on earnings calls following the GENIUS Act’s passage in July 2025.

Competition is also intensifying. S&P Global highlighted a wave of nonbanks pursuing charters to house stablecoin issuance, custody and settlement within regulated entities, positioning themselves as credible alternatives.

Banks are also wary of yield-like incentives in stablecoin ecosystems that could compete with deposits, even as direct interest payments remain restricted.

Responses will diverge. S&P Global analysts expect large, global banks to explore issuing tokenized deposits or bank-backed digital assets, while regional and midsize lenders focus on facilitating access via fiat on- and off-ramps. Regardless of strategy, banks will remain key gateways between fiat and stablecoin networks, but doing so will require significant upgrades to legacy systems ill-suited for real-time digital asset activity.

Cross-border banks face the strongest push to modernize as payments shift to multi-rail systems combining traditional, real-time and tokenized networks. Interoperability and wallet infrastructure will be critical, with large banks building multi-network connectivity and smaller firms leaning on fintech partners. Secure custody and embedded compliance are expected to become standard, the report added.

Read more: Stablecoin rewards restrictions can slow but not stop Circle’s USDC, says Citigroup

Bitcoin Depot Inc. reportedly failed to spot a data breach that resulted in the loss of over 50 bitcoins (BTC) worth $3.7 million for three days.

The BTC ATM operator disclosed the loss of 50.9 BTC in an SEC filing earlier this week, stating that the attacker gained access to its IT systems and its digital asset settlement accounts on March 23.

This, it says, allowed them to move the BTC from company-controlled wallets.

However, according to subsequent research from onchain sleuth ZachXBT, the breach actually occurred three days earlier on March 20.

“On April 6, 2026 Bitcoin Depot disclosed in an SEC 8K filing it uncovered an incident on March 23, 2026 which resulted in 50.9 BTC ($3.6M) stolen,” wrote Zach on Telegram.

“However the report did not include theft addresses so I manually traced out the incident onchain and found 19 high confidence theft addresses from March 20.

“This means it took three days for Bitcoin Depot to notice the funds were missing from its business.”

Read more: Inside the $280M Drift hack: weeks of setup, minutes to drain

Zach continued, “A delta of 3.55 BTC (54.45 BTC total) vs 50.9 BTC reported was found indicating other employee personal accounts may have also been impacted.

“54 BTC ($3.7M) flowed to KuCoin, a crypto exchange increasingly used by illicit actors. 

“At the time of my post the theft addresses still have not been reported in any compliance tools I use.”

According to the SEC filing, Bitcoin Depot is continuing to investigate the nature and scope of the incident with the assistance of unnamed “third-party specialists.”

It also says it’s “working with its outside cybersecurity experts to further reinforce its information technology systems and to prevent future unauthorized access.”

It also reassures users that no customer personally identifiable information was accessed, but does add that the “investigation remains ongoing.”

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Canary Capital filed a registration with the U.S. Securities and Exchange Commission for what appears to be the first U.S. spot Pepe ETF on Wednesday, April 8, 2026. The filing represents a formal submission to the SEC for a potential exchange-traded product tied to the Pepe memecoin.

The move comes amid growing institutional interest in cryptocurrency-based ETF products. If approved, the ETF would provide regulated exposure to Pepe, the fourth-largest memecoin by market capitalization.

Sources: SEC

This article was generated automatically by The Defiant’s AI news system from publicly available sources.

CoreWeave (CRWV) and Meta (META) have broadened their existing partnership, originally valued at up to $14.2 billion, with a new agreement worth around $21 billion.

As part of the deal, CoreWeave will supply dedicated cloud capacity to Meta through 2032, helping power the development and rollout of its AI technologies.

The infrastructure will span multiple locations and feature early deployments of NVIDIA’s (NVDA) Vera Rubin platform, aimed at boosting efficiency, reliability, and scale.

The NVIDIA Vera Rubin platform is the next-generation AI supercomputing architecture is expected to mark a massive shift from simple “Generative AI” to “Agentic AI,” whereby AI becomes more proactive in executing steps towards its goals rather than relying on human prompts.

A key focus of the CoreWeave-Meta agreement is inference, reflecting the industry’s shift toward running AI systems continuously rather than just training them.

“This is another example that leading companies are choosing CoreWeave’s AI cloud to run their most demanding workloads,” said CEO Michael Intrator.

The deal signals that large tech companies are increasingly securing long-term compute resources to support AI-driven services. Shares of CoreWeave rose 3% in pre-market trading on Thursday.

Read More: Mark Zuckerberg’s Meta is planning stablecoin comeback in the second half of this year

Meta Platforms is stepping up its presence in the fast-moving social commerce space, introducing new tools that connect creators, artificial intelligence, and advertising more closely to actual purchases, particularly across Instagram and Reels.

The latest rollout signals a shift from passive product discovery toward a system where engagement can translate more directly into measurable sales outcomes.

A key part of the strategy centres on expanding the role of creators in the shopping journey. Businesses across 22 countries, including India, will soon be able to share product catalogues with creators, enabling them to tag and link items directly within Reels content. The change effectively turns creator posts into shoppable storefronts, narrowing the gap between entertainment and commerce.

Meta said its creator marketplace now includes more than 1.5 million discoverable creators. New filters within Ads Manager allow brands to identify suitable partners with more precision, improving campaign alignment.

“This makes it easier than ever for businesses to quickly identify creators who are a good match for their goals and likely to perform well in their partnership ads campaigns,” the company said.

“Partnership Ads has moved influencer marketing from a brand-building line item to a marketing channel tied to outcomes,” said Vikas Chawla, pointing to the growing ability to measure creator-led performance.

Meta is also increasing its focus on Reels as a space where users are more likely to engage with ads. The company has expanded its “Reels Trending Ads” into categories such as business, finance, travel, and entertainment, placing brands alongside content that is already drawing strong engagement.

“We’re now part of conversations consumers are already having… the performance uplift has been hard to ignore,” said Sadhvi Dhawan.

At the same time, artificial intelligence is becoming a central component of Meta’s commerce stack alongside creators.

The company is extending its Advantage+ suite with generative AI tools that automate video production, voiceovers, and translations. These tools are designed to lower the effort needed to produce localised, high-volume ad creatives.

Meta is also testing a feature called “product set optimisation,” which allows advertisers to prioritise specific products within larger catalogues. Early results show a 17% drop in cost per purchase for promoted items.

Automated catalog video tools are also gaining traction. These tools convert static listings into video ads and are delivering up to 20% more conversions per dollar, further improving campaign efficiency.

Meta prepares new AI models as competition intensifies

Alongside its commerce push, Meta is advancing its artificial intelligence roadmap with plans to release its first models developed under Alexandr Wang. Some versions are expected to be offered under an open-source license.

Meta has long stood out among major U.S. tech firms for allowing developers to modify its frontier models. However, rising competition in AI is prompting questions over whether that level of openness will continue.

The company continues to emphasise its distribution advantage. By embedding AI tools across platforms such as WhatsApp, Facebook, and Instagram, Meta can reach billions of users globally, often without direct cost. That scale remains difficult for rivals to match and forms a key part of its strategy to close the gap with competitors.

Meta has also introduced Muse Spark, its first model from the Meta Superintelligence Labs unit. The system is positioned as a step toward “personal superintelligence” capable of reasoning, using tools, and coordinating multiple agents on behalf of users.

A core feature of Muse Spark is its “Contemplating” mode, which runs several agents in parallel before producing a response. Meta describes it as an answer to advanced reasoning systems such as those seen in models like Gemini Deep Think and GPT Pro.

The company’s push into AI has also involved internal restructuring. Reports indicate that Meta has cut hundreds of roles as it redirects resources toward priority engineering projects tied to its AI ambitions.

A Seoul Administrative Court has overturned the Financial Intelligence Unit’s three-month partial suspension of Dunamu, the operator of Upbit, in a ruling that reframes how AML rules are applied to crypto exchanges in Korea. The decision, reported by Yonhap News Agency, sides with Dunamu’s challenge to the regulator’s February 2025 sanction, which had blocked new Upbit user transfers for a period of three months.

The court’s reasoning centers on regulatory clarity. It noted that explicit guidelines exist for transfers above 1 million won (roughly $675), but regulations governing smaller transfers were not sufficiently specific to underpin the enforcement action. In essence, the ruling challenges the FIU’s ability to impose major AML sanctions when the underlying compliance standards aren’t clearly spelled out in practice.

Key takeaways

• The Seoul Administrative Court overturned the FIU’s three-month partial suspension on Dunamu, affirming Dunamu’s challenge to the regulator’s AML sanction.
• The court found that while large transfers have clear regulatory expectations, smaller transfers lacked precise guidance, weakening the basis for the enforcement action.
• The ruling narrows the FIU’s leverage to sanction crypto exchanges when the applicable AML standards are not explicitly defined, potentially affecting how similar cases are pursued in the future.
• Dunamu had argued that it had already taken proactive steps to address AML concerns, and the court accepted that there was no clear evidence of intent or gross negligence on the part of Upbit’s operator.
• The decision follows a sustained dispute that began after the FIU’s sanction and a court-granted injunction in March 2025 allowing Upbit to continue onboarding while the case was reviewed.

What the ruling changes about AML enforcement for exchanges

At the heart of the case is a tension between regulatory expectations and the practical, day-to-day controls required of digital-asset platforms. The FIU had argued that Dunamu facilitated transactions with unregistered overseas virtual asset service providers (VASPs) and failed to meet customer due diligence standards. It also cited a broader review that flagged hundreds of thousands of suspected KYC violations during Upbit’s license assessment. In response, Dunamu pursued legal relief, arguing that the sanctions lacked a precise, enforceable standard for the actions expected from exchanges.

The court’s decision emphasizes that enforcement actions must be grounded in clearly articulated requirements. When the rulebook is not explicit for certain transaction sizes, penalizing operators on those grounds becomes problematic. The ruling thus narrows the FIU’s capacity to wield large-scale AML penalties in cases where the applicable guidance isn’t demonstrably specific, potentially prompting regulators to refine or clarify AML expectations for smaller transfers going forward.

Regulatory and market implications for Korea’s crypto sector

The judgment arrives at a moment when Korea’s crypto industry has been navigating a tightening but opaque regulatory environment. While the FIU has shown a willingness to sanction exchanges for AML lapses, this ruling signals that the regulator may need to anchor its actions in clearly defined, widely understood standards—especially for lower-value transfers that constitute a substantial portion of daily exchange activity.

For investors and market participants, the decision offers a measure of judicial oversight over AML enforcement, potentially reducing the risk of abrupt, wide-sweeping sanctions when guidance is ambiguous. It also accentuates the importance for exchanges to maintain proactive, transparent compliance programs that can stand up to scrutiny even if regulatory guidance is not perfectly explicit on every transfer tier.

Observers will be watching whether the FIU updates its guidelines in response to the ruling or appeals the decision. The core issue is whether regulators can consistently apply penalties without accessible, precise standards to govern smaller-scale transfers. The court’s stance suggests a preference for clearly defined rules over broad, punitive actions in the AML domain, at least in cases where evidence of intent or gross negligence is not strong.

Operational impact on Upbit and user onboarding

The February 2025 sanction had blocked new Upbit users from transferring digital assets as part of a broader AML crackdown. After Dunamu filed suit, the court granted an injunction on March 27, 2025, permitting Upbit to continue onboarding while the case proceeded. With the new ruling overturning the sanction, Upbit’s operations are positioned to return to prior norms, subject to ongoing regulatory oversight and any further developments in the case or in FIU guidance.

For Upbit users and the broader market, this outcome matters beyond a single court ruling. It underscores the delicate balance between enforcing AML standards and ensuring that legitimate trading platforms can operate without prolonged, legally uncertain suspensions. In the near term, exchanges may respond by accelerating internal reviews and tightening KYC and due-diligence workflows to align with any forthcoming clarifications from regulators.

What comes next

The ruling sets a precedent that could influence future regulatory actions against crypto exchanges in Korea. If the FIU chooses to appeal or to issue updated guidelines, the framework for AML enforcement could become clearer, reducing ambiguity around what constitutes compliance for both large and smaller transfers. Market participants should monitor whether the FIU issues new guidance on cross-border transactions, VASP registrations, and customer due diligence, and whether further cases test the boundaries of enforcement against exchanges with robust internal controls but evolving regulatory interpretations.

In the longer term, the case highlights a broader dynamic in crypto regulation: the push for concrete, actionable standards that guide both enforcement and compliance. For operators, clarity reduces legal risk and helps stabilize onboarding and transaction flows. For users, it signals a potential path toward more predictable compliance practices and smoother access to crypto services, provided the regulatory framework continues to evolve with clear, well-publicized guidelines.

Readers should watch for any FIU statements or guideline updates that clarify expectations for smaller-value transfers and cross-border activity, as well as any subsequent court actions tied to this dispute.