Dollar stablecoins have grown to about $300 billion in circulation, prompting a Bank of England policymaker to warn that their expansion could increase demand for US Treasurys while creating new risks during periods of heavy redemptions.

Stablecoins could extend the dollar into new markets

The Bank of England said in a Sep. 15 speech that stablecoins could reinforce the US dollar’s international role by making dollar-linked assets and settlement systems easier to access outside the United States.

Carolyn Wilkins, an external member of the central bank’s Financial Policy Committee, told an audience at Queen’s University Belfast that dollar stablecoins already have a “considerable first-mover advantage.” About 98% of stablecoin value is denominated in dollars, according to figures cited in her speech.

Stablecoins in circulation reached roughly $300 billion by mid-2026, compared with less than $5 billion at the beginning of 2020. Although most activity still involves crypto trading, lending, collateral, and market liquidity, Wilkins said the tokens could move deeper into payments and international finance.

Cross-border settlement forms one channel for that expansion. Stablecoin transfers can operate around the clock and move between countries without passing through every institution in a traditional correspondent banking network.

Research cited by Wilkins found that such systems could lower costs in payment corridors where banking services remain slow or expensive. Sending a $200 remittance cost an average of 6.4% worldwide in 2024, while the average charge in Sub-Saharan Africa reached about 8.5%.

Dollar stablecoins can also give people in countries with unstable currencies access to a dollar-linked asset through a mobile phone, without requiring a US bank account. Wilkins said such use could extend dollarization into digital markets, although thin liquidity still limits some payment corridors.

Other currencies have yet to build comparable scale. Circle’s euro-backed token passed €400 million in circulation in August, while the entire euro stablecoin market stood at about €650 million in June, according to a previous EURC supply report. Dollar tokens remain far ahead despite efforts to build alternatives tied to the euro and pound.

Stablecoin reserves add demand for US Treasurys

Issuers generally invest the money received from token buyers in liquid reserve assets, including cash, short-term government debt and Treasury-backed repurchase agreements. Growth in stablecoin supply can therefore send additional funds into the market for US government securities.

USDT issuer Tether and USDC issuer Circle held almost $150 billion in Treasury bills at the end of 2025, according to Bank for International Settlements research cited by Wilkins. Their net purchases reached about $33 billion during the year.

Although the combined position remains small compared with the full Treasury market, Wilkins described the largest stablecoin issuers as meaningful participants in short-term US government debt. Research referenced in her speech found that stablecoin inflows can place modest downward pressure on short-term Treasury yields as issuers buy more safe assets.

The net effect depends on where users obtained the money placed into stablecoins. Moving capital from a Treasury money market fund into a token whose issuer buys the same bills may add little new demand. Funds transferred from another currency or asset class would have a stronger effect, while withdrawals from bank deposits could affect lenders’ funding costs and capacity to provide credit.

Tether’s own accounts show how closely issuer earnings have become linked to US debt. The company generated about $1.5 billion in operating profit during the second quarter of 2026, supported by returns from its Treasury and repo holdings, crypto.news reported in July.

Circle also earns much of its income from the assets backing USDC. Average USDC circulation doubled from $38.1 billion to $76.2 billion in the fourth quarter of 2025, while its reserve portfolio returned 3.8%, according to the company’s results covered in a February earnings report.

Redemptions could reverse Treasury buying

The same reserve structure that sends money into Treasury bills during stablecoin growth can create selling pressure when users redeem tokens.

Stablecoins are claims that holders expect to exchange for cash at face value. Since tokens trade continuously, issuers may have to raise cash quickly when redemptions accelerate, even outside conventional market hours.

Wilkins warned that several large issuers selling Treasury bills at the same time could worsen changes in yields and liquidity if the government-debt market were already under strain. Pressure would not have to begin inside the stablecoin industry, as concerns about US inflation, public debt or institutional credibility could weaken demand for dollar assets before token redemptions add to the selling.

The stablecoin sector is not yet large enough to pose a major threat to the Treasury market or create a material financial-stability risk in the UK, according to Wilkins. A large depegging event could still damage confidence in regulated tokens.

USDC provided an earlier example of how reserve concerns can reach a stablecoin. Circle held about $3.3 billion at Silicon Valley Bank when the lender failed in March 2023, causing USDC to lose its dollar peg as redemptions rose. The token was recovered after US authorities guaranteed the bank’s deposits.

Wilkins compared the possible Treasury feedback loop with the UK liability-driven investment crisis in 2022, when forced gilt sales added to falling bond prices and prompted intervention by the Bank of England.

US rules deepen the stablecoin-Treasury link

The GENIUS Act, enacted in July 2025, created a federal framework for US payment stablecoins and requires issuers to hold at least one dollar of eligible reserves for each dollar of tokens outstanding.

Permitted assets include cash, insured deposits, short-dated Treasury bills, Treasury-backed repo agreements and qualifying money market funds. The law also establishes disclosure requirements and gives stablecoin holders priority in an issuer’s insolvency.

Implementation remains unfinished. The Office of the Comptroller of the Currency expects to finalize its stablecoin rules by November 2026, which could push their effective date to around March 2027, according to an August implementation update. Issuers worth more than $50 billion must undergo annual audits, while all regulated issuers will have to report weekly to their main regulator and publish monthly disclosures.

Wilkins said reserve rules address whether issuers have enough assets but do not fully answer how quickly those assets can be converted into cash during a run. Even Treasurys faced severe liquidity pressure during the March 2020 dash for cash, when the Federal Reserve intervened in the market.

A limited Federal Reserve account proposed for eligible payment firms could improve routine settlement, according to the speech. The account would not provide access to Fed borrowing, leaving stablecoin issuers without a prearranged source of emergency liquidity during a redemption crisis.

UK stablecoin rules place more weight on liquidity

The Bank of England’s framework for systemic sterling stablecoins applies stricter reserve and liquidity requirements than the US regime, although Wilkins noted that the two systems cover different groups of issuers.

The UK framework applies once a sterling stablecoin is classified as systemic, while the GENIUS Act governs US payment stablecoins more generally. Britain’s model includes payment-system access, liquidity contingency plans and procedures for issuer failure, with conditional access to central bank liquidity also possible.

For cross-border issuers, the Bank of England would require a UK legal entity and place key safeguarding arrangements inside the country. Its final framework for systemic sterling stablecoins is scheduled for completion at the end of 2026.

Separately, the Financial Conduct Authority finalized its rules for UK stablecoin issuance in June after reducing some proposed capital requirements. The regulator has also allowed prospective issuers to test their products through a dedicated sandbox, while the Bank of England continues experiments involving stablecoins and a simulated digital pound.

An attacker exploited a custom module connected to an Ethereum Safe wallet in an attempt to extract roughly $7.7 million in rsETH, only to have the funds intercepted by an MEV bot.

According to blockchain security firm Blockaid, the attacker used a public keeper multicall to direct a custom Uniswap v4 liquidity module into an attacker-created hooked pool, where aEthrsETH was unwrapped into rsETH.

Blockaid identified the affected wallet as a Safe belonging to an unidentified user and said about $7.73 million in rsETH had been lost at the time of its initial report.

Source: Blockaid

The attack was then front-run by an MEV bot known as Yoink, an automated program that monitors blockchain transactions for profitable opportunities. The bot captured the rsETH before the original exploiter could take control of the funds, while Etherscan data shows Yoink transferred about 18.93 ETH, worth roughly $46,000, to an address labeled as a block builder in the same transaction.

Kelp, the protocol behind rsETH, subsequently placed the address that received the funds under a 24-hour pause, temporarily preventing the tokens from being transferred. “This is a precautionary, wallet-level measure only,” Kelp said. “Kelp contracts are safe, rsETH remains fully backed.”

Source: KelpDAO

The protocol said minting, withdrawals and integrations were continuing normally while it worked with security experts to investigate the incident. The apparent attack vector involved the custom module connected to the victim’s Safe, while Kelp said its own contracts were unaffected.

Cointelegraph contacted Blockaid and Kelp for additional comment but had not received a response by publication.

Magazine: Why are AI’s biggest companies suddenly asking to slow down?

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.

Stablecoin payments startup Velocity raised another $10 million from investors including Visa (V), Circle (CRCL) and Ripple, extending a Series A that now totals $48 million as financial heavyweights push deeper into blockchain-based payments infrastructure.

Haun Ventures, Translink Capital and Mirana Ventures also participated in the extension, which follows a $38 million Series A announced in July.

The new investment valued the London-based firm at $200 million post-money, CEO Eric Queathem told CoinDesk in an interview. The original Series A round was oversubscribed, he said.

The funding comes as stablecoins, or cryptocurrencies tied to fiat money, are becoming a bigger part of global money movement. Once used primarily by crypto traders to shift dollars between exchanges, stablecoins have grown beyond $300 billion in circulation and are increasingly being used in payments, cross-border transfers and corporate treasury operations.

Velocity is going after the infrastructure behind those transactions. Its platform is designed to let payment companies and banks use stablecoins for settlement, liquidity and treasury operations without ripping out the systems they already use.

Payments plumbing

Queathem previously worked at Worldpay, which settles more than $2 trillion in annual payments volume. That experience helped shape the idea for Velocity. While consumer-facing payments have improved dramatically, much of the infrastructure moving money between issuers, card networks, acquirers and merchants remains cumbersome.

Crypto-linked stocks fell sharply on Tuesday after the US Senate failed to advance the CLARITY Act, with shares of Circle and Coinbase dropping about 10%.

Bitcoin treasury companies were also hit, with American Bitcoin falling around 8%, while Strategy and Strive each declined about 5%, according to Yahoo Finance data. Bitcoin miners joined the selloff, with Riot Platforms falling about 6%, CleanSpark nearly 5%, Hut 8 more than 4% and IREN almost 4%.

Coinbase (COIN) shares fell 9.9% on Tuesday. Source: Yahoo Finance

The declines followed a Senate vote on a cloture motion to bring the legislation to the Senate floor, short of the 60 votes required. The CLARITY Act would set rules for the US digital asset market and delineate which parts of the industry fall under the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC).

The setback leaves the bill with little time to advance this year, with fewer than 36 legislative days remaining before a new Congress is sworn in following November’s midterm elections.

Following the vote, Bitcoin briefly fell below $75,000, but had climbed back to around $76,000 at the time of writing, CoinGecko data showed.

Related: Democrats push back on GOP’s ‘final’ CLARITY offer with counterproposal: Politico

Armstrong pushed for CLARITY ahead of vote

Coinbase CEO Brian Armstrong had been one of the most vocal industry advocates for the CLARITY Act, saying in May that the legislation had never been in a “stronger or more bipartisan position.”

Armstrong was even more explicit about the bill’s prospects in August, predicting either “60+ votes in the Senate on September 15th” or new rules from the CFTC and SEC on Sept. 16 if the bill failed to advance. “Sounds like clarity is coming either way,” he wrote on X.

Source: Brian Armstrong

Ahead of Tuesday’s vote, Armstrong again urged senators to support the legislation, framing the choice as one between promoting US crypto innovation and allowing other countries to take the lead. “History — and the crypto voter — won’t forget,” he wrote.

Following the failed vote, Strategy co-founder Michael Saylor offered his own take on regulatory clarity. “The only clarity you need is Bitcoin,” he wrote on X.

Source: Michael Saylor

Federal prosecutors have charged two Robinhood engineers with commodities fraud and wire fraud after each allegedly earned more than $50,000 by trading crypto perpetual futures with confidential listing information.

Robinhood engineers allegedly traded before listings

The U.S. Attorney’s Office for the Southern District of New York announced the charges against Hefu Chai, 36, and Huaisong Xiang, 30, also known as Jerry Xiang, on Sep. 15.

Both defendants worked as engineers at Robinhood Markets during the alleged conduct. According to the criminal complaints, their jobs gave them access to confidential information about which cryptocurrencies Robinhood Crypto planned to add to its platform and when the listings would become public.

Prosecutors allege that Chai and Xiang used the information between 2025 and 2026 to open perpetual futures positions linked to the planned listings. Rather than buying the underlying tokens, they allegedly placed the trades through Hyperliquid before Robinhood released its announcements.

Once the listings became public, prosecutors said the prices of several related cryptocurrencies rose, allowing both defendants to close profitable positions. Each engineer allegedly made more than $50,000 through trades tied to Robinhood’s private listing plans.

The complaints accuse Chai and Xiang of breaching their duties to protect their employer’s confidential information. Prosecutors have not identified every cryptocurrency involved in the alleged trades in the public announcement.

As crypto.news reported in June, Robinhood’s Worldcoin listing announcement gave customers access to WLD while the token was experiencing sharp price swings. WLD fell nearly 15% around the listing period despite gaining access to Robinhood’s customer base, showing that a platform addition does not always produce a lasting rally.

Hyperliquid perpetuals formed the alleged trading route

Hyperliquid operates a decentralized derivatives platform where traders can take long or short positions through perpetual futures. Unlike standard futures, perpetual contracts do not have fixed expiration dates and use recurring funding payments to keep their prices close to the referenced assets.

According to prosecutors, the absence of an expiry date allowed Chai and Xiang to establish positions before Robinhood’s announcements and hold them until the expected price movements occurred. The complaints allege that both engineers possessed material nonpublic information when they entered the trades.

Hyperliquid records trades on public blockchain infrastructure, but users can interact with its markets without buying the assets referenced by the contracts. July coverage of Hyperliquid’s protocol upgrades detailed how HIP-3 opened perpetual market creation to outside developers and expanded the platform beyond crypto tokens to instruments linked to stocks, commodities and indexes.

HIP-3 has operated on the mainnet since October 2025, while HIP-4 went live in May 2026 with support for prediction and event markets. Hyperliquid’s expanding range of instruments has placed its decentralized trading infrastructure closer to markets traditionally overseen by U.S. commodities and derivatives rules.

Although the alleged trades occurred on a decentralized venue, U.S. Attorney Jamie McDonald said the type of platform used did not remove the defendants’ legal obligations.

“Misappropriating confidential information to trade in the derivatives markets for personal benefit is illegal,” McDonald said.

The prosecutor added that traders cannot avoid U.S. securities and commodities laws by using perpetual futures, tokenized securities, or similar financial products.

US prosecutors apply commodities and wire fraud laws

Chai and Xiang each face one count of commodities fraud and one count of wire fraud. According to the Justice Department, the commodities charge carries a maximum prison term of 10 years, while wire fraud carries a maximum sentence of 20 years.

Any sentence would be determined by a federal judge after considering the U.S. Sentencing Guidelines and other statutory factors. The maximum penalties do not indicate what either defendant would receive if convicted.

The case gives U.S. readers a direct example of how federal prosecutors can pursue alleged misuse of corporate crypto information even when the trades do not involve ordinary shares or spot token purchases. Prosecutors framed the alleged perpetual positions as derivatives trades made with information taken from a U.S.-listed company.

Robinhood trades on Nasdaq under the HOOD ticker and offers crypto services through Robinhood Crypto. Its conventional brokerage, crypto, and derivatives products operate through separate affiliated entities with different regulatory arrangements.

Robinhood’s official disclosures state that its U.S. futures and cleared swaps business operates through Robinhood Derivatives, a futures commission merchant registered with the Commodity Futures Trading Commission and a member of the National Futures Association. Robinhood Crypto is licensed by the New York State Department of Financial Services for virtual currency activity.

The alleged Hyperliquid trades were separate from customer transactions on Robinhood’s own platform. Prosecutors have accused the two employees of exploiting internal information rather than alleging that Robinhood customers lost funds or that the brokerage manipulated token prices.

FBI investigation leads to court appearances

FBI Assistant Director James C. Barnacle Jr. said the engineers allegedly used sensitive information obtained through their employment for personal profit. According to Barnacle, the charges show that the FBI and its partners will act when employees are accused of abusing confidential corporate information.

Chai was scheduled to make his first court appearance in the Northern District of California. Xiang was due to appear in Manhattan before U.S. Magistrate Judge Ona T. Wang in the Southern District of New York.

The charges arrive as Robinhood has increased its use of blockchain-based products. In September, its Ethereum layer-2 network experienced a 14-minute block-production halt that temporarily prevented transfers and smart contract calls from receiving confirmation.

Robinhood launched the chain’s public mainnet on July 1 with 95 tokenized stocks and wallet access in more than 120 countries. The network uses Ethereum for transaction fees and supports compatible wallets and applications, while its tokenized products remain separate from the alleged crypto listing trades described in the federal complaints.

Neither complaint represents a finding of guilt. Chai and Xiang are presumed innocent unless prosecutors prove the charges beyond a reasonable doubt in court.

Bankers trying to kill Clarity should remember that incumbent media companies failed to halt the Internet’s upheaval of their industry. So, if you care about American leadership, then why not write the laws governing this transformation here and now, rather than cede that position to some other country keen to lead in global finance.

For years, regulatory ambiguity has functioned as an unlikely moat around the crypto industry. Startups and offshore firms can tolerate legal and regulatory risks that heavily regulated financial institutions cannot. Those risks have kept many of the world’s largest financial companies on the sidelines.

Clarity would fill the moat.

With clear rules, incumbents could wield their formidable advantages: trillions of dollars of capital, hundreds of millions of customer relationships, global distribution, sophisticated risk management, trusted brands, and decades of regulatory experience.

That should terrify crypto companies far more than it terrifies banks.

Critics portray Clarity as deregulation or, worse, a giveaway to the crypto industry. They have it backwards. Clear rules would expose crypto companies to the full force of competition from some of the most powerful financial institutions in the world.

Such competition is exactly what lawmakers should want.

The history of financial innovation is not a story of new technologies’ destroying incumbents. After all, banking has been transformed for the better by technologies from the telegraph to the internet. In each case, forward-looking institutions used such inventions to reach new customers, create new products, and cultivate new markets.

Crypto stocks were a sea of red Tuesday afternoon after the Senate failed to advance the Clarity Act, dealing a major blow to an industry that has spent years — and hundreds of millions of dollars in campaign contributions — gunning for a comprehensive U.S. regulatory framework.

Coinbase COIN$172.05·Market Closed was down nearly 9% at $174.42, while stablecoin issuer Circle CRCL$85.90·Market Closed dropped 9.4% to $88.26. Galaxy Digital GLXY$22.27·Market Closed lost 8% and Gemini (GEMI) fell 7%.

The pain spread across the sector. Robinhood HOOD$110.01·Market Closed was down 3%, Bullish BLSH$35.50·Market Closed lost 5% and eToro (ETOR) fell 4%.

Among crypto miners, Riot Platforms RIOT$19.73·Market Closed dropped 5%, while MARA Holdings MARA$11.24·Market Closed, CleanSpark CLSK$12.63·Market Closed, IREN and Core Scientific CORZ$16.07·Market Closed were all down between roughly 3% and 4%.

The declines came after the Senate voted 49-50 on a procedural motion to advance the Digital Asset Market Clarity Act, well short of the 60 votes required.

The bill would have set rules for how different cryptocurrencies and blockchain projects are treated in the U.S., while giving the Commodity Futures Trading Commission (CFTC) greater authority over crypto spot markets.

New research has accused Anthropic of using “AI doom” media narratives to pump Dustin Moskovitz’s equity in the company to fund foundations that support its safety evaluator and curiously positive safety reviews.

Substack author Kevin Bass made the claim in a lengthy X post on Monday. In the post, he also calls for a Congressional investigation into the alleged financial conflicts of interest at Anthropic’s AI safety evaluator. It has so far drawn nearly 5 million views on social media.

Protos has not evaluated its veracity.

Focusing on the equity relationships between Anthropic and Model Evaluation and Threat Research (METR), the entity that checks its frontier AI models for safety, the analysis prompted several observers to report “SBF flashbacks.” 

I have conducted an audit of Anthropic’s finances.

What I have found is so shocking that I am calling for a Congressional investigation.

Anthropic is not just seeking regulatory capture.

It has built a regulatory capture machine that cannot be turned off.

Structural financial… pic.twitter.com/fyqQeSLsC8

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— Kevin Bass (@kevinnbass) September 14, 2026

According to Bass, Moskovitz’s Anthropic equity helps to fund Good Ventures Foundation and Coefficient Giving, which in turn support METR as Anthropic’s conflicted safety evaluator.

It also funds the Tarbell Center for AI Journalism, which pushes AI doom media to keep the flywheel spinning.

Anthropic CEO Dario Amodei is another curly-haired billionaire and Effective Altruist who has, like FTX’s Sam Bankman-Fried, constructed a web of self-serving entities.

These include:

• A household name with a high corporate valuation (Anthropic)
• Affiliated investment vehicles that almost no one has heard of
• Active political lobbying efforts
• Effective altruism-aligned nonprofits
• A well-funded media campaign to keep everything capitalized

Although no one is accusing Amodei of secretly stealing billions of dollars of customer deposits like Bankman-Fried, there seems to be a commingling of financial incentives between Anthropic and its ostensibly independent safety checker.

Read more: Anthropic’s AI doomsayer worked at Ripple

Anthropic installs ‘embedded evaluators’ for safety

Over the weekend, Anthropic CEO Dario Amodei proposed “embedded evaluators who have employee-like access to verify safety practices and report incidents.”

Boasting about his company’s supposed rigor, Amodei urged other frontier companies to “follow suit.”

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Bass, in complete contrast to this narrative, recast that story as a payroll scandal.

Trace the capital back, he claims, and METR ultimately relies on Facebook co-founder Dustin Moskovitz, a self-professed effective altruist. 

Forbes reported that he and his wife, Cari Tuna, moved an Anthropic stake into an unnamed nonprofit vehicle in early 2025.

By November 2025, Forbes estimated its worth at a staggering $500 million.

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Forbes later bounded the donated holding up to 0.8% of Anthropic, a company that has raised money at a $965 billion valuation this May. At that valuation, 0.8% could be worth over $7 billion.

Moskovitz said, “Our Anthropic shares are entirely in our foundation — no personal benefit.” 

Coefficient Giving CEO Alexander Berger wrote that the shares didn’t literally go to Coefficient Giving. However, a commenter disagreed with the spirit of that claim, noting that Amodei’s sister, Daniela, is married to Coefficient Giving co-founder Holden Karnofsky.

“If any of Coefficient Giving’s board members are large METR donors, that is a direct and obvious conflict of interest,” the commenter concluded.

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The latest available tax filing for the other nonprofit connected to METR, Good Ventures Foundation, reports $10.1 billion in assets at that nonprofit.

The filing names hundreds of public stocks but puts private equity and venture capital into generic buckets. Anthropic doesn’t appear by name.

METR annualized funding commitments of $142M

From whichever entities ultimately originated most of their fortunes, METR announced $71 million of new commitments over the past six months.

Despite this large budget, METR safety evaluators claim to refuse Anthropic or any AI lab funding, although frontier labs provide substantial free tokens for testing.

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Coefficient Giving is legally separate from Good Ventures, although Good Ventures serves as its founding partner. Coefficient Giving’s live archive records $3.7 million across two direct cash awards to Tarbell.

Tarbell acknowledges that Coefficient supplied most of its funding as of 2025, while maintaining that it doesn’t allow donors to control its reporting nor media efforts.

Anthropic announced an eight-week agreement with METR this month. The evaluator will get access to employees and internal transcripts.

METR’s conflict policy says it’s never received payment for company-identifying assessments, and it “strives to be supported by broad and independent funders.”

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