Crypto World
What is On-Demand Liquidity? How Ripple uses XRP to move money
On-Demand Liquidity is Ripple’s flagship use of XRP, a way to settle cross-border payments in seconds without banks pre-funding accounts around the world. This guide explains how it works, the trapped capital it frees, and why its own stablecoin now competes for the job.
Summary
- On-Demand Liquidity (ODL) is Ripple’s service that uses XRP as a bridge asset to settle cross-border payments in seconds, without banks pre-funding accounts in foreign currencies.
- It targets the biggest inefficiency in traditional cross-border payments: the trillions of dollars banks park in pre-funded accounts around the world to enable international transfers.
- A payment converts the source currency into XRP, moves the XRP across the world in seconds, and converts it into the destination currency, freeing that trapped capital.
- ODL, now folded into Ripple Payments, found real adoption in specific remittance corridors, though Ripple increasingly also uses its stablecoin for the settlement role.
- ODL is the clearest real-world use of XRP as a bridge asset, but its growth is corridor-specific and now competes with stablecoin-based settlement inside Ripple’s own products.
On-Demand Liquidity, usually shortened to ODL, is Ripple’s service that uses the XRP token as a bridge asset to settle cross-border payments almost instantly, eliminating the need for banks and payment providers to hold pre-funded accounts in foreign currencies around the world. That description captures both what it does and why it matters: it attacks one of the largest and most expensive inefficiencies in global finance, the vast sums of money that institutions must park in advance in distant accounts simply to be able to send international payments.
ODL replaces that pre-funded capital with a real-time conversion through XRP, turning a slow, capital-heavy process into a fast, capital-light one. It is also, importantly, the clearest and most concrete real-world use case for XRP, the answer to the question of what the token is actually for. This guide explains the problem ODL solves, how the mechanism works step by step, why XRP is used as the bridge, what the approach unlocks, how it fits into Ripple’s broader products, and the honest limits of its adoption, including the way Ripple’s own stablecoin now competes for the very role ODL was built to play.
Understanding ODL is valuable because it sits at the heart of the entire XRP investment thesis, and because it is one of the few places in crypto where a token has a clearly defined utility tied to a real financial problem. For years, the bullish case for XRP rested largely on the promise of ODL: that as more institutions used it to move money, demand for XRP as the bridge asset would grow. Whether that promise has been fulfilled, and whether it can be, depends on understanding exactly how ODL works and where its limits lie.
This guide covers the trapped-capital problem at the root, the mechanics of an ODL payment, why a volatile token can serve as the bridge, the capital efficiency it delivers, its place within Ripple’s evolving product lineup, the growing competition from stablecoins, and a clear-eyed assessment of how much ODL has actually achieved.
The problem ODL was built to solve
To understand ODL, you first have to understand how broken cross-border payments are under the traditional system, because the inefficiency is genuinely staggering.
When money moves between countries, it does not actually travel; instead, banks rely on a web of relationships called correspondent banking, in which each bank holds accounts at banks in other countries to enable payments in those countries’ currencies. To send money to, say, Mexico, a bank needs access to Mexican pesos, which it typically arranges by keeping a pre-funded account full of pesos at a bank in Mexico, ready to draw on. Multiply this across every currency and every corridor a bank serves, and the institution must keep accounts pre-funded with many currencies at many banks all over the world, with money sitting idle in each one waiting to be used.
The cost of this arrangement is enormous and largely invisible to the public. An estimated several trillion dollars sits trapped in these pre-funded accounts globally, capital that earns little and cannot be deployed for anything productive because it has to be available on demand for payments. Beyond the trapped capital, the system is slow, because a cross-border payment may hop through several correspondent banks, each adding delay, so transfers that should be instant can take days.
And it is expensive, with fees accumulating at each step. For banks, payment providers, and ultimately the people and businesses sending money, the correspondent-banking model is costly, sluggish, and capital-intensive. This is the problem ODL was designed to solve: not to make payments slightly better, but to remove the need for pre-funded accounts altogether, freeing the trapped capital and collapsing the settlement time from days to seconds.
What On-Demand Liquidity actually is
ODL’s solution is to replace the pre-funded foreign account with a real-time conversion through a bridge asset, and that bridge asset is XRP. Instead of keeping pesos sitting in a Mexican bank account in advance, an institution using ODL converts its money into XRP at the moment a payment is needed, sends the XRP across the world in seconds, and converts it into the destination currency on arrival.
The pre-funding disappears, because the liquidity is sourced on demand, in real time, exactly when the payment happens, which is what the name describes. There is no need to lock up capital in advance, because XRP serves as a temporary, fast-moving bridge between the two currencies rather than a parked reserve.
The elegance of the design is that XRP exists only fleetingly in the transaction, as a momentary intermediary between the source and destination currencies. The institution does not need to hold XRP as a long-term reserve; it acquires the XRP it needs at the instant of the payment, uses it to bridge the value across, and the recipient ends up with their local currency, not with XRP. This is what distinguishes a bridge asset from a held asset.
The whole point is that the value passes through XRP in seconds, so the parties are exposed to the token only for the brief moment the bridge is in use. ODL, in other words, is a mechanism for sourcing liquidity at the moment of need rather than parking it in advance, with XRP as the connective tissue that makes the instant currency-to-currency conversion possible. That is the core idea, and everything else about ODL follows from it.
A worked example: a payment through ODL
To make the mechanism concrete, follow a single payment from the United States to Mexico, which is one of the corridors where ODL has seen real use. Imagine a remittance company needs to send the equivalent of one thousand dollars to a recipient in Mexico, who should receive Mexican pesos. Under the traditional system, the company would rely on a pre-funded account of pesos sitting at a Mexican bank, drawing down that reserve to pay the recipient and later replenishing it, with all the trapped capital and delay that implies. Under ODL, the process is entirely different and happens in seconds.
The company’s dollars are converted into XRP on an exchange in the United States. That XRP is sent across the XRP Ledger to an exchange in Mexico, a transfer that settles in a few seconds for a tiny fee. On arrival, the XRP is immediately converted into Mexican pesos on the Mexican exchange, and those pesos are paid out to the recipient. From start to finish, the value has moved from dollars to pesos in seconds, with XRP serving as the bridge in the middle, and at no point did the company need a pre-funded peso account.
The capital that would have been trapped in that account is freed for other uses, the settlement that might have taken days happened almost instantly, and the cost is a fraction of the traditional fees. The recipient simply receives pesos, never touching or even knowing about the XRP that briefly carried the value across the border. That round trip, dollars to XRP to pesos in seconds with no pre-funding, is ODL in action, and it shows precisely what the service is built to do.
Why XRP is used as the bridge
A natural question is why a volatile cryptocurrency would be trusted to bridge real money, and the answer lies in the specific properties XRP brings and the very short window it is actually exposed. XRP settles transactions on its ledger in a few seconds, with very low fees, which is exactly what a bridge asset needs, because the entire value of the approach depends on moving value across quickly and cheaply.
The token also has reasonably deep liquidity on exchanges in many markets, meaning there is usually enough trading volume to convert into and out of XRP without moving its price too much, which is essential for a bridge that has to handle real payment volumes. And as a neutral asset not tied to any single country’s currency, XRP can serve as a common intermediary between many different currency pairs.
The volatility concern, which sounds disqualifying, is actually limited by the design. Because XRP is used purely as a fleeting bridge, the value passes through it in seconds, so the exposure to its price movements lasts only for that brief window. A payment is converted into XRP and out of XRP almost instantly, so even a volatile token poses little risk over a few seconds, especially when the amounts are hedged or the conversions are near-simultaneous.
This is the key insight that makes a volatile asset usable for settlement: the goal is not to hold XRP and bear its price swings, but to pass through it so quickly that the swings barely matter. The token’s speed, low cost, liquidity, and neutrality make it well suited to the bridging role, and its volatility, the obvious objection, is neutralized by the fact that no one holds it for more than moments. This is why XRP, despite being a volatile cryptocurrency, can function as the settlement bridge at the center of ODL.
What ODL unlocks: freeing trapped capital
The payoff of ODL, the reason institutions would adopt it, is the liberation of the enormous capital trapped in pre-funded accounts, and the significance of that is hard to overstate. When an institution no longer needs to keep money parked in foreign accounts around the world, all of that capital becomes available for productive use.
For a large payment provider or bank operating across many corridors, the sums involved can be substantial, and freeing them improves the efficiency of the entire operation. Capital that sat idle as a precondition for sending payments can instead be deployed, lent, or invested, which is a direct and meaningful financial benefit. This capital-efficiency gain is the core business case for ODL, the concrete reason a rational institution would consider it over the traditional model.
Beyond the capital efficiency, ODL delivers speed and cost benefits that matter especially in certain use cases. Remittances, the money that workers send home to families in other countries, are a natural fit, because they are often small, frequent, time-sensitive, and currently burdened by high fees and delays, exactly the pain points ODL addresses. Payment corridors between countries with less developed banking links, where maintaining pre-funded accounts is especially costly or difficult, also benefit disproportionately.
Ripple has reported significant volume milestones through partners using its liquidity service in such corridors, including large remittance flows in certain markets, which shows the model working in practice where the traditional system is weakest. The combination of freed capital, faster settlement, and lower cost is what ODL offers, and in the corridors where those benefits are sharpest, the value proposition is real and demonstrable. The question, which the honest assessment later addresses, is how broadly those conditions apply.
ODL, RippleNet, and Ripple Payments
It helps to place ODL within Ripple’s broader product history, because the branding has evolved and the names can confuse. ODL began as a specific service within RippleNet, the company’s network of financial institutions, distinguishing the XRP-powered liquidity offering from the basic messaging and payment-coordination features that did not require the token.
Over time, as Ripple consolidated and rebranded its offerings, the XRP-based liquidity capability was folded into a broader product now generally called Ripple Payments, the company’s end-to-end cross-border payments solution for institutions. The underlying mechanism, using XRP as a bridge to source liquidity on demand, remained, even as the packaging and naming changed.
This evolution reflects Ripple’s maturation from a company selling a specific token-powered feature to one offering a comprehensive payments platform that institutions can adopt. Ripple Payments bundles the connectivity, compliance, and settlement features an institution needs to move money across borders, with on-demand liquidity through XRP available as the settlement mechanism for corridors where it makes sense. Hundreds of financial institutions have relationships with Ripple’s network in some form, though it is important to understand that not all of them use XRP-powered liquidity; many use Ripple’s technology for messaging and coordination while settling through traditional means.
The distinction matters, because the headline figure of how many institutions work with Ripple is much larger than the number actually using XRP as a bridge. ODL, now living inside Ripple Payments, is the part of the offering that genuinely uses the token, and it is one component of a wider platform rather than the whole of it.
The stablecoin question
The most important recent development in the ODL story is that Ripple’s own stablecoin has begun competing with XRP for the settlement role, which complicates the token thesis significantly. Ripple launched a dollar-pegged stablecoin, and across its institutional business that stablecoin has increasingly been used as the settlement asset for cross-border payments, the very job ODL was designed to give XRP.
The reason is straightforward: institutions often prefer a stable, dollar-denominated instrument for settlement because it does not move in price at all, removing even the brief exposure that bridging through a volatile token involves. For many institutional use cases, a stablecoin is simply an easier sell, because treasurers and compliance teams are more comfortable with an asset pegged to a familiar currency than with a volatile cryptocurrency, however fleeting the exposure.
This creates a genuine tension at the heart of Ripple’s strategy and the XRP thesis. ODL was the flagship use case that justified demand for XRP, the concrete answer to what the token is for. But Ripple now offers a stablecoin that can perform the same settlement function, and in many cases is being chosen for it, which means the company’s own product can substitute for its own token. This does not eliminate XRP’s role, because there remain situations where bridging through a neutral asset is more efficient than holding many different stablecoins, particularly across exotic currency pairs.
But it does mean that the simple thesis, that ODL adoption automatically drives XRP demand, is weaker than it once was, because some of that settlement is now flowing through the stablecoin instead. The stablecoin question is the single biggest complication to the ODL story, and any honest account of what ODL means for XRP has to reckon with the fact that Ripple built an alternative to its own bridge asset.
Risks and limits to understand
ODL is a real and clever mechanism, but anyone evaluating it, particularly as a basis for an XRP investment thesis, should understand its genuine limits and risks instead of the idealized version. The most important limit is that ODL adoption is corridor-specific, not universal. The benefits are sharpest in particular remittance and payment corridors, often between markets with less developed banking links, and far less compelling in major, highly liquid corridors where traditional settlement is already cheap and fast. So ODL is not a wholesale replacement for global payments but a targeted tool that wins in specific situations, which means its growth is bounded by how many such situations exist and how quickly Ripple can win them.
Several other risks deserve attention. The bridge mechanism depends on sufficient XRP liquidity on exchanges at both ends of a corridor; in thin markets, converting in and out of XRP at scale can move the price or incur slippage, limiting how much volume the corridor can handle. The model also depends on the regulatory acceptance of using a cryptocurrency in payment flows, which varies by jurisdiction and can change.
Most significantly for an investor, the link between ODL adoption and XRP price is far less direct than the hype suggests: because XRP is used only as a fleeting bridge and is not held as a reserve, even substantial payment volume translates into only momentary demand for the token, and the rise of Ripple’s stablecoin as a settlement alternative further weakens that link. ODL is a genuine, working use of XRP, but it is a targeted tool with real constraints, not the universal engine of token demand it is sometimes portrayed as.
Anyone using ODL as the foundation of an investment case should weigh how corridor-specific the adoption is, how brief the token exposure is, and how much of the settlement role the stablecoin is taking, and should never invest money they cannot afford to lose on a thesis that depends on adoption outrunning those limits.
Frequently Asked Questions
What is On-Demand Liquidity in simple terms?
On-Demand Liquidity, or ODL, is Ripple’s service that uses the XRP token as a bridge to settle cross-border payments in seconds, without banks pre-funding accounts in foreign currencies. Instead of keeping money parked in foreign accounts in advance, an institution converts its currency into XRP at the moment of payment, sends the XRP across the world in seconds, and converts it into the destination currency on arrival. This frees the capital that would otherwise sit trapped in pre-funded accounts and collapses settlement time from days to seconds.
How does ODL actually work?
It replaces a pre-funded foreign account with a real-time conversion through XRP. In a payment from one country to another, the sender’s currency is converted into XRP on an exchange, the XRP is sent across the XRP Ledger in a few seconds for a tiny fee, and on arrival it is immediately converted into the destination currency and paid to the recipient. The recipient receives their local currency and never holds XRP. The token exists in the transaction only fleetingly, as a momentary bridge between the two currencies, which is what makes the instant, capital-light settlement possible.
Why use a volatile token like XRP for settlement?
Because XRP is used only as a fleeting bridge, exposure to its price lasts just the few seconds the value passes through it, so its volatility barely matters. XRP also settles in seconds with very low fees, has reasonably deep liquidity in many markets, and is neutral, not tied to any one country’s currency, all of which suit a bridge asset. The goal is not to hold XRP and bear its swings but to pass through it so quickly that the swings are negligible, which is what makes a volatile asset usable for settlement.
What problem does ODL solve?
The enormous inefficiency of traditional cross-border payments. Under correspondent banking, institutions must keep money pre-funded in foreign accounts around the world to send payments in those currencies, trapping an estimated several trillion dollars globally in idle capital, while payments hop through multiple banks over days and accumulate fees. ODL removes the need for pre-funding by sourcing liquidity on demand through XRP, freeing that trapped capital, collapsing settlement to seconds, and cutting costs. The benefits are sharpest in remittances and corridors with less developed banking links.
Does ODL adoption drive XRP’s price up?
Less directly than the hype suggests. Because XRP is used only as a momentary bridge and is not held as a reserve, even substantial payment volume creates only brief, fleeting demand for the token instead of sustained holding. Adoption is also corridor-specific instead of universal, and Ripple’s own stablecoin is increasingly used for the same settlement role, which further weakens the link. ODL is a genuine, working use of XRP, but the simple thesis that adoption automatically and substantially lifts the price overstates how the mechanism actually affects token demand.
Why does Ripple’s stablecoin compete with ODL?
Ripple launched a dollar-pegged stablecoin, and across its institutional business that stablecoin is increasingly used as the settlement asset for cross-border payments, the same role ODL gives XRP. Institutions often prefer a stable, dollar-denominated instrument because it does not move in price at all, removing even the brief exposure that bridging through XRP involves, and treasurers and compliance teams tend to be more comfortable with it. So Ripple’s own product can substitute for its own token, which complicates the thesis that ODL adoption drives XRP demand, though XRP retains an edge in some cross-currency situations.
This article is educational information, not investment advice. Cryptocurrency is volatile, and details about Ripple’s products and adoption reflect reporting available as of June 26, 2026, which can change quickly. Verify current information from primary sources and assess the risks carefully before making any decision.
The European Parliament’s Committee on Economic and Monetary Affairs (ECON) has formally pushed the European Commission to consider whether several fast-growing areas of the crypto market should fall under EU-wide rules. In an own-initiative resolution scheduled for a plenary vote, lawmakers ask the Commission to assess the regulatory perimeter for crypto lending and borrowing, staking, non-fungible tokens (NFTs) and decentralized finance (DeFi), while also encouraging broader tokenization across financial services.
The proposal, drafted by Belgian MEP Johan Van Overtveldt, will be submitted to the full Parliament for voting expected on July 7. If adopted, it would become the Parliament’s policy position—but it would not itself amend the existing Markets in Crypto-Assets Regulation (MiCA) or create new binding legal obligations.
Key takeaways
- ECON is urging the European Commission to evaluate whether lending/borrowing, staking, NFTs and DeFi should be regulated beyond MiCA’s current coverage.
- The draft strongly supports the development of euro-denominated stablecoins under MiCA to support payments and tokenized financial infrastructure.
- ECON wants consistent application of MiCA across EU member states, warning against national rule-making that could fragment the market.
- The resolution is set for a plenary vote around July 7 and would reflect Parliament’s stance without directly changing MiCA.
From MiCA scope to a wider policy checklist
MiCA already provides an EU framework for certain categories of crypto assets and sets licensing expectations for crypto-asset service providers. But ECON’s report signals that lawmakers are now looking past MiCA’s current boundaries. The resolution asks the Commission to assess regulatory needs for additional activity types, including staking and crypto lending and borrowing, as well as NFTs and DeFi.
The timing matters for investors and operators because the Commission is already in review mode. According to the report’s context, the European Commission launched a public consultation in May on whether MiCA should be expanded to cover DeFi, staking, lending, NFTs and tokenized financial assets, and whether the current ban on interest-bearing stablecoins should be revisited. ECON’s resolution effectively adds political weight to those questions, by asking the Commission to consider a broader regulatory scope rather than treating MiCA as a closed endpoint.
In addition, lawmakers stress the importance of a level playing field for firms operating across the EU. The draft encourages consistent MiCA implementation throughout member states, and warns against additional national requirements that could fragment regulation and force crypto businesses to navigate a patchwork of rules.
Stablecoins shift from suspicion to policy support
While the resolution opens the door to evaluating regulation for more crypto activity types, it also reflects an increasingly supportive stance toward euro-denominated stablecoins. ECON backs the development of regulated stablecoins under MiCA and ties that support to the bloc’s payments strategy and broader tokenization plans across financial services.
The report’s stablecoin emphasis also follows a notable change in tone from some senior crypto critics in recent weeks. The policy direction comes shortly after former Bank for International Settlements general manager Agustín Carstens softened his stance on stablecoins and highlighted a potential coexistence with fiat systems, according to earlier coverage referenced in the source material.
ECON’s stablecoin perspective is consistent with the idea that euro-backed tokens could complement existing financial rails. The resolution argues that euro-denominated stablecoins could complement tokenized commercial bank deposits and wholesale central bank digital currencies, while also enabling faster and cheaper cross-border payments. It further claims that wider use could strengthen EU financial markets’ competitiveness and support the euro’s international role.
Importantly for market participants, these points do not signal a standalone rule change by themselves. Instead, they serve as a political directive: policymakers appear increasingly willing to treat certain stablecoin use cases as strategically valuable—provided they operate within the EU’s regulatory framework.
Why this vote matters for the EU crypto market
The ECON report is an own-initiative resolution, meaning it is Parliament setting out recommendations for the Commission rather than directly legislating. Even so, a Parliament-backed position can influence how regulators prioritize consultations, drafting work, and the next round of policy decisions.
The filing process also underscores what is at stake. The text drafted by Van Overtveldt went through negotiations and amendments within ECON before receiving committee approval. An earlier draft, presented in February, focused more narrowly on MiCA’s existing framework, including stablecoin classifications and legal certainty for multi-issued stablecoins. Months later, the committee’s final version broadens the emphasis toward whether additional crypto sectors—particularly DeFi-like activity and token-driven financial primitives—should be pulled under a more explicit regulatory framework.
Meanwhile, MiCA’s implementation timetable is already moving. The transitional period for crypto asset service providers ends July 1, after which providers generally must hold authorization under the regulation to continue serving customers across the EU. For businesses watching for additional MiCA expansion, the July plenary vote on the resolution could be another step in shaping regulatory expectations—especially for models that don’t neatly fit within today’s MiCA categories.
A broader push for “digital money” coexistence
ECON’s approach aligns with a parallel strand of EU digital money policy. In the source context, the committee previously backed legislation for a digital euro, with lawmakers arguing that public and private forms of digital money should coexist rather than compete.
That political framing matters because it helps explain why stablecoins and tokenized deposits are treated as complementary tools instead of outright replacements. If the Parliament’s position is adopted and the Commission follows through during its MiCA review process, the next policy cycle could be defined less by whether crypto should exist, and more by how different digital money instruments should interact within an overarching EU framework.
Readers should watch the European Commission’s response to its May consultation and any follow-on legislative proposals once the July 7 plenary vote sets Parliament’s official stance. The key uncertainty is how the Commission will translate “assessment” questions—especially around DeFi, staking, lending/borrowing, and NFTs—into concrete regulatory boundaries without undermining the consistent MiCA implementation ECON says it wants across the EU.
A survey arranged by digital asset services provider CoinShares found that more than half of UK-based financial advisers reported the bulk of their clients’ crypto holdings were outside their oversight.
According to the results of a CoinShares survey released on Thursday, 52% of UK advisers in a group of 261 European wealth management professionals said that the majority of their clients’ digital assets exposure was essentially “invisible” to them. Among all the EU countries surveyed, including France, Germany, Italy and Switzerland, the number was 25%, with 61% of advisers saying that they worked in companies that explicitly restricted digital assets or provided no clear internal guidance.
“The capital has already been allocated,” said CoinShares co-founder and CEO Jean-Marie Mognetti. “The people entrusted with managing it simply cannot see it, and in most cases not because clients are unwilling to engage, but because firm policy prevents them from doing so. This is not a knowledge problem. It is not a demand problem. It is a firm-policy problem becoming a wrong-way risk.”
He added:
“[…] Visibility comes before advice. You cannot allocate, manage risk or earn trust over assets you cannot see.”
Source: CoinShares
The UK’s Financial Conduct Authority (FCA), the watchdog overseeing digital asset regulation, reported in December that about 8% of the country’s adults were invested in crypto. The group recently proposed allowing authorized investment funds to hold up to a 10% allocation of cryptocurrency exchange-traded notes.
Related: Bank of England eases stablecoin rules, introduces 40B pound issuance cap
Potential new leadership to shake up UK crypto policy?
UK Prime Minister Keir Starmer resigned as Labour leader on Monday amid pressure from many in his own party, opening the door to a recently elected member of parliament to take the reins.
In a recent by-election, former Mayor of Greater Manchester Andy Burnham won a seat as a member of parliament representing Makerfield, positioning him to be heavily favored by many in Labour to replace Starmer. While it’s unclear how Burnham may handle crypto policy on a national stage, as mayor, he supported the blockchain industry as a driver for economic development.
Magazine: AI is banking the unbanked in Africa… faster than crypto
The European Parliament’s economic affairs committee has urged the European Commission to assess whether crypto lending and borrowing, staking, non-fungible tokens (NFTs) and decentralized finance (DeFi) should be regulated.
The recommendations were part of a report tabled Friday for plenary vote. It also called for promoting tokenization across financial services, encouraging euro-denominated stablecoins and assessing whether additional crypto activities should be regulated under the European Union’s Markets in Crypto-Assets Regulation (MiCA).
Drafted by Belgian Member of the European Parliament Johan Van Overtveldt, the report is an own-initiative resolution by the Committee on Economic and Monetary Affairs (ECON) that outlines recommendations for the Commission on digital asset regulation.
It will next go before the European Parliament for a vote, expected July 7. If adopted, the resolution would become Parliament’s official position on digital assets policy but would not amend MiCA or create new legal obligations.
The legislative timeline shows the committee’s approval of the report and its referral for a plenary vote. Source: European Parliament
Related: European Parliament throws support behind digital euro
EU warms up to regulated stablecoins
The recommendations also reflect an evolving view of stablecoins among policymakers. Days after former Bank for International Settlements general manager and longtime crypto critic Agustín Carstens softened his stance on stablecoins, the report welcomed euro-denominated stablecoins under MiCA and encouraged their development to support the bloc’s payment sector.
In 2023, Van Overtveldt called for tighter restrictions on cryptocurrencies following the banking turmoil surrounding Silicon Valley Bank, Signature Bank and Silvergate Bank. The crisis was also closely tied to stablecoins, as USDC issuer Circle held roughly $3.3 billion of its reserves at Silicon Valley Bank when it collapsed, briefly causing USDC to lose its dollar peg.
Van Overtveldt likened cryptocurrencies to drugs during the 2023 banking crisis. Source:Johan Van Overtveldt
The report argued that euro-denominated stablecoins could complement tokenized commercial bank deposits and wholesale central bank digital currencies while enabling faster and cheaper cross-border payments. It also said broader adoption could strengthen the competitiveness of EU financial markets and the international role of the euro.
The stance also aligns with ECON’s broader vision for Europe’s digital money ecosystem. On Tuesday, the committee backed legislation for a digital euro, with lawmakers arguing that public and private forms of digital money should coexist rather than compete.
Related: Poland president vetoes MiCA bill again as crypto companies look to license abroad
Lawmakers look beyond MiCA’s current scope
Van Overtveldt first presented a draft of the report in February before months of negotiations and amendments by ECON members. The earlier version largely focused on MiCA’s existing framework, including stablecoin classifications and legal certainty for multi-issued stablecoins.
The committee-approved report urged consistent application of MiCA across the EU to preserve a level playing field for crypto firms. It also warned member states against introducing national requirements beyond MiCA that could fragment the bloc’s digital asset industry.
The Commission is already reviewing MiCA. In May, the Commission launched a public consultation seeking feedback on whether the framework should be expanded to cover areas including DeFi, staking, lending, NFTs and tokenized financial assets, while also reopening debate over the regulation’s ban on interest-bearing stablecoins.
Meanwhile, MiCA’s transitional period ends July 1, after which crypto asset service providers generally must hold authorization under the regulation to continue operating across the EU.
Magazine: AI is banking the unbanked in Africa… faster than crypto
Polymarket says a third-party vendor compromise discovered on Thursday enabled attackers to inject malicious code into its website interface, leading to a phishing campaign that targeted multiple users. According to blockchain analyst Specter, the injected script was used to drain an estimated $2.94 million from at least 11 Polymarket wallets.
Polymarket stated that the incident has been contained and that the compromised dependency has been removed. The platform also said affected users will receive full refunds. Cointelegraph contacted Polymarket for comment but did not receive a response before publication.
Key takeaways
- Polymarket reported a third-party vendor compromise that allowed attackers to inject a malicious script into its frontend.
- Analyst Specter linked the malicious code to phishing activity, estimating losses of about $2.94 million across at least 11 user wallets.
- Polymarket said the issue has been contained, a dependency has been removed, and users will be fully refunded.
- Blockchain security reporting data indicates the incident fits within a high volume of crypto breaches in the quarter.
- Separately, DefiLlama data shows private key compromise remains the dominant cause of reported exploit losses over the last 30 days.
Frontend compromise and phishing-driven wallet losses
The Polymarket incident centers on a supply-chain style failure rather than a direct smart contract exploit. Specter said the malicious script appeared to enable a phishing attack that redirected or induced users into compromising credentials or authorizations, culminating in unauthorized asset movement from user wallets.
In practice, this type of front-end compromise can be especially damaging for institutions and compliance teams because it shifts the risk profile away from on-chain mechanics alone. Even where contracts are unchanged, malicious web-layer code can manipulate user behavior, compromise session-related security assumptions, or trick users into signing harmful transactions. For regulated entities that integrate with or route user access to crypto services, incidents like this highlight the need for tighter vendor governance and continuous integrity controls over externally served dependencies.
Polymarket’s response suggests the affected component was identified and removed after discovery. Its commitment to fully refund users also raises operational and policy considerations: while refunds may mitigate user harm, they do not automatically address whether the underlying controls—such as third-party software update processes, dependency monitoring, and incident response playbooks—were sufficient to prevent reoccurrence.
DefiLlama breach reporting underscores a pattern of recurring exploit methods
The Polymarket case arrives as crypto security incident reporting remains elevated. DefiLlama data places the event within a broader timeline: the third quarter’s second quarter-to-date statistics indicate the quarter had its most-hacked period by incident count, according to Cointelegraph’s reference to DefiLlama and its reporting on Q2.
DefiLlama also reports that June saw reported crypto exploit losses of $74.9 million across 29 incidents, exceeding May’s $60.5 million total but remaining well below April’s $644 million peak.
Among the largest June incidents were a $36 million Humanity Protocol exploit, a $4.7 million Secret Network bridge exploit, two separate Aztec exploits valued at $2.1 million each, and a $1.7 million bridge exploit tied to Taiko. While each exploit involves different technical pathways, they collectively reinforce a key compliance reality: incident frequency and magnitude continue to stress operational risk management across exchanges, wallets, and service providers with protocol-level exposure.
DefiLlama’s breakdown of losses over the past 30 days points to private key compromise as the most common leading vector, accounting for 43% of reported exploit losses. Fake proof exploits made up 10%, and reverse MEV honeypots accounted for 8%. For risk teams, these categories matter because they indicate whether controls should prioritize key management, signature/authorization integrity, or transaction routing safeguards for automated systems and integrators.
Private key history at Polymarket highlights multiple threat surfaces
About a month before the reported Polymarket frontend incident, the prediction market disclosed an additional exploit traced to a six-year-old private key used for internal top-up operations. Cointelegraph previously reported that Polymarket said contracts and user funds remained safe in that earlier case and that all permissions associated with the compromised key were revoked.
Taken together, the two events underscore that Polymarket—or any crypto service with on-chain and off-chain touchpoints—can face multiple, distinct threat surfaces: backend key management for operational processes, and web-delivered dependencies for user-facing interactions. For institutional stakeholders, the combination can complicate assurance: even when one control area is remediated (for example, permissions revoked after a key issue), a separate control plane—like third-party dependency integrity—can still introduce new risk.
Polymarket’s scale also implies higher stakes for incident governance. DefiLlama reports that the platform holds more than $450 million in total value locked, up from $112 million a year ago.
Regulatory and compliance implications for crypto firms and integrators
Although Polymarket operates in a market with evolving regulation, incidents of this nature feed directly into compliance expectations for crypto businesses. Under frameworks such as the EU’s Markets in Crypto-Assets regulation (MiCA), firms are expected to meet governance and operational resilience obligations, while AML/CFT requirements under applicable regimes typically extend to “know your customer” processes and the protection of user funds. Supply-chain compromise and phishing-driven theft also raise questions for regulated counterparties about how customer asset protection claims are substantiated in practice.
For exchanges, wallet providers, payment processors, and institutional service providers, vendor-linked incidents may trigger additional internal review under third-party risk management policies. Common areas include: the lifecycle management of dependencies, auditability of frontend build and deployment pipelines, incident detection and containment procedures, and the adequacy of refund or restitution policies. Even if the theft originates outside on-chain code, user harms can still translate into regulatory scrutiny about consumer protection, disclosures, and operational risk controls.
Cross-border differences in enforcement priorities can further complicate response. In the United States, where crypto enforcement actions have frequently addressed security, consumer protection, and alleged failures in compliance controls, and where federal agencies coordinate through legal processes and subpoenas, a frontend-driven phishing incident can still be framed as a failure to maintain reasonable safeguards. Separately, AML/KYC obligations do not prevent phishing, but they can affect how stolen funds are identified, how affected users are supported, and how suspicious activity is triaged.
For institutional compliance monitoring, the most actionable element is the incident pattern itself: third-party compromise leading to user deception, alongside persistent exploit vectors such as key compromise. These themes suggest that governance should cover both technical controls (key management, permissioning, transaction integrity) and administrative controls (vendor oversight, software supply-chain assurance, and documented response measures).
Closing perspective
Polymarket says the compromised dependency has been removed and that affected users will be refunded. The next phase will likely involve detailed post-incident validation of the compromised supply chain, verification of residual exposure across its frontend delivery stack, and continued alignment of technical controls with the compliance expectations institutions apply to customer protection and operational resilience. Security incident reporting will remain a key reference point for assessing whether this case reflects a broader systemic risk pattern or an isolated vendor failure.
Binance’s competitive advantages are facing a hard new test. Europe’s sweeping new crypto rulebook reopens an old question: how much of its dominance is due to scale, and how much to a regulatory gap.
The pressure is immediate. The European Union (EU) is forcing Binance out of the bloc under new Markets in Crypto-Assets (MiCA) rules. Days earlier, OKX chief executive Star Xu split its success into four parts, arguing each leans on those gaps.
Binance Has Four Competitive Advantages
Analysts and rivals credit Binance’s dominance to four pillars, a breakdown Xu recently detailed. Each is a real strength. Each also now faces a harder test.
Regulatory Arbitrage
Binance scaled quickly by operating across many markets, often ahead of local licensing requirements. That kept costs low. US prosecutors later found that it had never filed a suspicious activity report and let US users trade more than $898 million with sanctioned Iran.
It settled for $4.3 billion in 2023, the year founder Changpeng Zhao pleaded guilty and resigned.
Since then, it has chased licenses and, when pushed, left markets instead, exiting Canada, the Netherlands, and an earlier German application.
A Market-Leading Listings Engine
Binance turns attention into volume better than any rival. It took 39.2% of the top exchanges’ spot trading in 2025, almost five times the share of its nearest competitor, according to CoinGecko.
By its own count, it processed $34 trillion in total product volume across the year. Its Launchpad and constant listings keep traders chasing the next token, though critics warn the sharpest hype cycles leave retail holding the losses.
Unmatched Distribution
Binance counted more than 300 million registered users by the end of 2025, the company reported. A network of affiliates, volunteer Angels, and media partners stretches that reach further.
Supporters call it strong community building. Critics call it narrative management when bad news lands.
Heavy Compliance Investment
Binance’s compliance spending has topped $200 million a year, up from $158 million two years earlier, chief executive Richard Teng told Bloomberg. It fielded about 63,000 law enforcement requests in 2024, up from 58,000.
Yet US prosecutors still imposed a three-year independent monitor in 2023, and critics, Xu among them, say the controls long trailed the marketing.
“Let’s see how Binance plays the regulatory arbitrage game again…Regulators are ultimately evaluating outcomes, not organizational charts,” Xu said, with his own exchange competing directly with Binance.
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Why the Moat May Still Hold
Binance’s scale is hard to dispute. It pushed $7.3 trillion in spot trades in 2025, far ahead of the field. It also held the top rank through the upheaval that followed CZ’s exit and Teng’s arrival.
Binance says its proof-of-reserves system now backs about $163 billion in user assets.
That base reaches across Asia, the Middle East, and Latin America, well beyond Europe.
Even so, the EU squeeze is real. Binance is winding down EU services next week, and it withdrew its Greek bid days ago.
“Binance is not leaving Europe,” Gillian Lynch, its Head of Europe and UK, told Reuters.
Rivals are circling. Kraken cleared Ireland and Coinbase chose Luxembourg, ready to absorb users Binance sheds.
Analyst Paul Barron is less alarmed, calling the deadline a priced-in consolidation that mostly clears dormant platforms.
The open question is how much of Binance’s lead is scale and how much is a regulatory gap. Cleaner rules should start to answer it.
The post How MiCA is Testing Binance’s Four Competitive Advantages appeared first on BeInCrypto.
Dogecoin and Hyperliquid’s HYPE led the week’s losses across crypto, falling near 10%, as money kept flowing toward stocks tied to the artificial-intelligence boom and away from major tokens.
Dogecoin slid 9.6% over seven days to about $0.076 and HYPE lost 9.9%, the steepest falls among the majors. Ether dropped 8.4% to about $1,581 and XRP fell 7.8% to $1.06, while solana and tron held up better, roughly flat on the week at $72 and $0.32.
Bitcoin was the steadier major, down 5.3% to around $60,345 on Saturday after dipping to about $58,800 on Friday and recovering, per CoinDesk data.
“Bitcoin approached $58K at its lows late Thursday and early Friday, but in both cases, aggressive buying quickly pushed it back into the $60K range,” Alex Kuptsikevich, FxPro chief market analyst, told CoinDesk. “This pattern resembles margin position liquidations during downtrend spikes, followed by strong buying on pending orders during the recovery.”
“Given deteriorating sentiment among institutional investors and their ability to quickly divest from cryptocurrencies to stabilise their balance sheets, it is worth preparing for continued pressure and periodic sell-off spikes by leveraged traders,” he added.
Ripple CEO Brad Garlinghouse said he remains bullish on bitcoin but that Michael Saylor’s approach to funding bitcoin purchases has damaged the broader crypto market, in a CNBC interview on Friday, as the preferred stock at the center of Strategy’s model fell to a record low.
“Financial engineering does not drive long-term value,” Garlinghouse said, arguing that the lasting value of any digital asset comes from its usefulness. “Team Michael Saylor wasn’t focused on the right stuff and that has hurt the overall market.”
He separated that from his view on the asset itself, saying he is still bullish on bitcoin.
Garlinghouse’s target was the machine Strategy has used to accumulate bitcoin. For about a year, the company has issued preferred shares, a class of stock that pays a fixed dividend, to raise cash for more bitcoin.
Its STRC share carries an 11.5% annual dividend and is engineered to trade near $100. Garlinghouse pointed to STRC trading about 25% below that level as a “damning indictment” of the strategy.
Bitcoin’s price volatility around and just under $60,000 continued at the end of the business week, but the asset has managed to climb above this level as of Saturday morning.
Most larger-cap alts are slightly in the green, with XRP trading above $1.05 and ETH standing close to $1,600. SOL has risen the most from this cohort.
BTC Fights for $60K
The business week began on the right foot for the primary cryptocurrency as the asset rebounded from the weekend slump to $62,500 and tapped $65,500 on Monday. However, that was a short-lived attempt for a more profound recovery as the bears were quick to intervene and halt all the progress.
In the following hours, the asset fell to $62,000. It bounced to $63,000, but the next leg down was even more painful. Bitcoin broke below $60,000 for the second time this month and tapped $59,000. After another dead-cat bounce to almost $62,000, the asset plunged even harder on Thursday, dumping to $58,000 for the first time since late 2024.
The latest leg down was strongly related to the adverse price moves observed from Strategy’s MSTR, which also marked a multi-year low of under $80. Nevertheless, BTC has managed to recover some ground from the aforementioned low and now stands at just over $60,000 despite the new attacks in the Middle East.
Its market capitalization has risen to $1.210 trillion on CG, while its dominance over the alts remains under 56%.
SOL, AAVE Pump
Ethereum continues to climb gradually after the recent low of $1,510 and now trades close to $1,600 following a minor daily increase. XRP has reclaimed the $1.05 support after a 2% jump since yesterday. Solana’s SOL has gained the most from the larger-cap alts today and sits above $72.
Even more impressive gains come from AAVE, AVAX, and MORPHO. Aave’s token has risen by double digits and sits above $95, while AVAX is north of $6.6. MORPHO has neared $1.80 following a 7% jump.
In contrast, MemeCore continues to drop, losing another 20% of value and struggling below $0.70 as of now.
The total crypto market cap has recovered over $80 billion since the Thursday low and is up to $2.170 trillion.
The post Solana (SOL) Rebounds Above $70, Bitcoin (BTC) Fights for $60K: Weekend Watch appeared first on CryptoPotato.
Prediction-market operator Kalshi is in talks to raise fresh capital at a valuation of roughly $40 billion, according to the Financial Times, nearly double the price tag from a round that closed just seven weeks ago. The Financial Times first reported the talks, citing people familiar with the… Read the full story at The Defiant
Securitize has secured commitments expected to deliver about $400 million ahead of its planned New York Stock Exchange debut through a merger with Cantor Equity Partners II.
Summary
- Securitize expects to raise about $400 million ahead of its planned NYSE listing through a merger with Cantor Equity Partners II.
- Backed by BlackRock, Morgan Stanley, Coinbase, and Circle, the firm continues expanding its tokenization business with new institutional products.
- The market debut comes as Securitize grows its on-chain asset platform while defending itself in a patent dispute with tZERO.
According to Securitize, fewer than 30% of shareholders in Cantor Equity Partners II, the special purpose acquisition company taking the firm public, chose to redeem their shares following the final redemption results.
The company said it now expects to receive approximately $400 million in gross proceeds from the transaction, including related private investment in public equity (PIPE) financing, before transaction-related expenses.
The proposed listing comes as tokenization companies continue attracting institutional attention, with firms seeking to bring traditional financial assets onto blockchain networks. Securitize counts BlackRock, Morgan Stanley, Coinbase, and Circle among its backers and has become one of the largest providers of tokenization infrastructure for financial institutions.
The merger is expected to complete next week
Market reaction has been positive ahead of the vote. Shares of Cantor Equity Partners II closed 7% higher at $10.86 on Friday before extending gains in after-hours trading to $11.
According to Securitize, shareholders are scheduled to vote on the merger on Monday. If approved and all remaining closing conditions are satisfied, the transaction is expected to close on July 1. The combined company is then expected to begin trading on the New York Stock Exchange under the ticker SECZ on July 2.
Commenting on the listing, Securitize co-founder and CEO Carlos Domingo said reaching the public markets represents an important step for the company after more than eight years of building tokenization infrastructure.
“Reaching the public markets is a significant milestone for Securitize and a reflection of the growing momentum behind tokenization.”
Domingo added that tokenized securities, once considered largely theoretical by major financial institutions, are now moving into mainstream finance as institutional adoption continues to grow.
The public debut also follows several months of expansion for the company. As previously reported by crypto.news, Securitize recently extended its Tokenized AAA CLO Fund (STAC) to the Solana blockchain. The company said Ethena Labs plans to allocate $250 million to the fund, which invests in U.S. dollar-denominated AAA-rated collateralized loan obligation tranches.
According to Securitize, the product is developed with BNY serving as custodian of the underlying assets and sub-adviser through BNY Investments.
Institutional tokenization business continues to expand
Alongside new investment products, Securitize has continued growing its role in tokenized capital markets. Earlier this year, the company partnered with the New York Stock Exchange to support the exchange’s planned tokenized securities platform.
Crypto.news previously reported that Securitize provides tokenization infrastructure for more than 650 funds and oversees more than $4 billion in tokenized assets. BlackRock has also deepened its relationship with the firm.
In May, crypto.news reported that the asset manager filed a second Securitize-powered tokenized fund with the U.S. Securities and Exchange Commission after its BUIDL fund expanded to roughly $2.3 billion in assets.
At the same time, Securitize is dealing with a legal dispute ahead of its market debut. As reported by crypto.news, the company recently asked the U.S. District Court for the District of Delaware to declare that its products do not infringe patents owned by tZERO after receiving a cease-and-desist letter. Securitize called the allegations “without merit,” while tZERO said its claims involve patents covering compliance systems, investor registry checks, and tokenized market infrastructure.
Separate industry forecasts also point to continued growth in tokenized finance. Earlier this month, Standard Chartered projected that tokenized assets used in decentralized finance could reach $2.7 trillion by the end of 2030, up from current levels.
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