Last week the euro stablecoin consortium Qivalis tripled its membership to 37 banks across 15 countries, adding ABN AMRO and Rabobank to founders such as BNP Paribas and ING, with a Dutch licence pending and a launch under MiCA this year. It is a defensive move in a contest the US is already winning, because stablecoins have become an instrument of currency power.
American stablecoins play offense for the dollar. About 99% of all stablecoins are dollars. They were built to go global, extending dollar access to emerging markets where local currencies are unstable and US banking never reached, putting a dollar on any phone, beyond the capital controls meant to keep it out. The GENIUS Act reads partly as Washington formally embracing that dynamic. There is a Treasury angle too: every coin is backed by US government debt, and the issuers have become serious buyers of it. Tether alone now holds more US Treasuries than South Korea, around $135 billion, which ranks it the 17th-largest holder in the world. For the issuers, the model is lucrative in its own right: they keep the yield on those reserves, which earned Tether around $10 billion last year.
Europe cannot run that play, because the demand is not there. The world reaches for dollars in a crisis, not euros, so a euro coin has nothing to project abroad. What it can do is defend: corporate treasury and cross-border settlement within Europe, and keeping European payments from sliding into dollars, what Europe calls digital dollarisation. And in Europe it is barely the same business. Euro yields are lower, and Europe adds to it by its own rules: MiCA pushes much of the reserve into bank deposits, so part of the interest that nets a dollar issuer billions ends up with the banks. Which is why the incumbent banks build it here, when in the US the job fell to crypto-native upstarts.
Europe is getting in its own way. In her 8 May speech Christine Lagarde argued that private stablecoins are not the model Europe should follow, and that the answer is a digital euro anchored in central bank money, which will not arrive before 2029. Where Washington and its banks pull together, Europe’s central bank is fighting the very banks it supervises. The signal is the asymmetry: the US is using stablecoins to extend the dollar, while Europe cannot decide whether to let them defend the euro.
This week’s market
- BGCI Index -6.40%
- Bitcoin -5.49%
- Ethereum -6.26%
- Solana -6.93%
All figures are week-to-date as of today 15:00 CET
Theta Blockchain Ventures content
- Ruud Smets in The Alternative Investor
Trust is one of the most expensive inputs in economic life, but blockchains change this arithmetic (read the full article)
Blockchain news
- BIS project finds tokenization could make cross-border payments faster, safer (learn more)
- Mastercard secures New York BitLicense in push for stablecoins, tokenized deposits (learn more)
- SoFi brings bank-issued stablecoin to 15 million users in crypto push (learn more)
- Circle partners with Nium to connect USDC settlement to global payout rails (learn more)
- Coinbase taps Standard Chartered to expand multi-currency funding rails for institutional clients (learn more)
- White House starts review of CFTC’s prediction markets rulemaking as Trump backs agency authority (learn more)
- Samsung units to acquire $408 million stake in Upbit operator Dunamu (learn more)
- Spain blocks Polymarket, Kalshi for operating without licenses amid widening global crackdown on prediction markets (learn more)
- ECB warns EU finance ministers that easing euro stablecoin rules would weaken banks (learn more)
Relevant financial updates
- Fold, a centralized payments and digital asset treasury platform, has raised $150mln in a Debt Financing round led by Encina Lender Finance
- JPYC*, a fiat-backed stablecoin platform, has raised $31.4mln in a Series B round led by Asteria with investments from SBI Investments, Metaplanet Inc., and 20 others
- PopDEX, a decentralized exchange and derivatives platform, has raised $30mln in a funding round led by Foresight Ventures
- Didit, an AI tooling and identity infrastructure platform, has raised $7.5mln in a Seed round with investments from Y Combinator, Pioneer Fund, Founders Future, and 6 others
- Squid*, a developer tooling platform, has received a $6mln strategic investment from North Island Ventures with investments from Borderless Capital, Dialectic, Altos Ventures, Ripple, Arche Capital, Scenius Capital
*Underlying TBV portfolio position | Prices as per 29/05
Interesting things to read and listen to
- Goldman Sachs’ research piece on tokenized equities (read here)
- a16z’s 7 charts about tokenized assets (read here)
- Cloudflare CEO Matthew Prince on why AI agents are breaking the internet’s ad-based business model on the Bankless podcast (listen here)