Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure

Amid the current tightening global oversight and a growing appetite for transparency in the crypto world, Tether’s position as the leading stablecoin issuer in the sector is at risk from new and rising stablecoins.

Fading Dominance Of The Stablecoin Issuer

SMQKE, an observer and researcher, shared a report that shows that the firm could lose its robust grip in the stablecoin sector. According to the researcher, the leading stablecoin issuer “will lose market dominance to regulated stablecoins like the RLUSD in the future.”

Presently, global regulations are being made that focus on the intersection of digital assets and traditional finance. One of the assets that fits nicely into these regulations is Circle’s USDC, which has won approval from the Markets in Crypto-Assets Regulation (MiCA).

However, Tether’s USDT appears to be evading regulators’ demands for transparency in the way it operates its underlying assets. As a result, regulated stablecoins will continue to overtake USDT as the market leader in the future. “Only time will tell whether Tether will continue to leak market share to rivals or continue to hold sway with cryptocurrency fans,” the report stated.

Stablecoins such as USDP, PYUSD, USDG, and RLUSD steadily challenge USDT’s dominance as they reflect stronger institutional alignment. This is because official regulations govern each stablecoin and have reserves that are mainly made up of liquid, high-quality assets.  

A Major Shift From Tether Coming Soon

As the stablecoin landscape evolves, Tether, the largest stablecoin firm, continues to make steps to provide a reliable network. A recent report shows that the leading platform plans to let go of some of the top chains in the sector in the upcoming months.

In a significant move, Tether, the first blockchain-enabled platform, has announced it will discontinue USDT support on five key blockchains. Such a move is meant to streamline its operations and bolster the network’s efficiency.

The announcement was shared by the Phoenix Group, a crypto media on the X platform, on Sunday. According to the report, the impending disconnection is scheduled to take place in the next two months, particularly in September 2025.

This strategic shift by Tether tends to phase out chains that no longer meet the changing technical or community standards of the stablecoin issuer. In addition, it reflects the firm’s increased focus on preserving liquidity and security throughout its ecosystems.

The list of blockchains mentioned in the company’s report includes Omni Layer, Bitcoin Cash, Kusama Network, EOS Network, and Algorand. Tether will discontinue USDT redemptions and freeze remaining tokens on these chains starting from September 1, 2025. 

As stated in the report, Tether’s decision to cut ties with these key chains comes after a strategic infrastructure evaluation and represents a move toward more utilized and scalable networks. Prior to the September deadline, the firm has urged users holding USDT on the affected chains to redeem or migrate their tokens to other supported chains. Failure to do so before then is likely to lead to loss of funds and assets.

Featured image from Adobe Stock, chart from Tradingview.com

Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.

Circle applied to charter First National Digital Currency Bank to become a federally regulated trust that would manage USDC reserves and expand custody services for institutional clients.

According to a June 30 announcement, Circle applied to the Office of the Comptroller of the Currency (OCC), seeking authority to operate as a national trust bank subject to full OCC supervision. 

Approval would permit the new entity to hold and safeguard the assets backing USDC for Circle’s US issuer and to offer crypto custody to pension funds, asset managers, and corporate treasurers. 

Circle added that a national charter would align its structure with the GENIUS Act, a bill moving through Congress that would require payment stablecoin issuers to hold segregated reserves in federally regulated institutions.

CEO Jeremy Allaire said the charter “marks a significant milestone in our goal to build an internet financial system that is transparent, efficient, and accessible.” 

He noted that the firm aims to “enhance the reach and resilience of the US dollar” by operating market-neutral infrastructure open to global institutions. 

Circle trades on the New York Stock Exchange under the symbol CRCL and reported more than $32 billion in USDC circulation at the end of May.

Expanding licensing movement

Circle issued the first New York Department of Financial Services BitLicense in 2015, which gave it a head start in complying with the European Union’s Markets in Crypto-Assets framework last year. 

In April, the Abu Dhabi Global Market granted the company in principle approval to operate as a money services provider. Circle said the OCC filing extends that licensing strategy to the US at the federal tier rather than the state level.

The trust bank will act as a wholly owned subsidiary of Circle Internet Group. It will maintain capital and liquidity according to OCC rules and submit to regular examinations. Circle did not provide a launch timeline. OCC evaluations of trust charter applications typically span several quarters.

In its announcement, Circle noted that institutional clients have pressed stablecoin issuers for federally regulated custody options as US lawmakers debate reserve mandates and disclosure standards. 

By holding reserves at a national trust, Circle aims to streamline compliance ahead of the potential passage of the GENIUS Act while reducing counterparty risk for large depositors.

Mentioned in this article

Deutsche Bank, Memento Blockchain, and Interop Labs published a litepaper on June 17 outlining plans for Digital Asset Management Access 2 (DAMA 2), a tokenization platform intended to operate on public blockchains and facilitate the issuance of regulated funds.

According to the paper, DAMA 2 would link three layers: Ethereum (ETH) would act as the settlement base, Memento Blockchain’s ZKsync-based layer-2 would process transactions with zero-knowledge privacy safeguards, and a top-layer interface would offer an app store with ready-made fund smart contract templates.

The concept is framed as Blockchain-as-a-Service, allowing issuers to launch products without the need to build protocol teams.

To support cross-chain activity, DAMA 2 would integrate Axelar Network’s Interchain Token Service, enabling interoperability with more than 70 blockchains. This multichain setup would give issuers a single dashboard to lock, mint, and burn tokens across networks while preserving fungibility.

The litepaper confirms Deutsche Bank’s earlier initiative, first reported on Dec. 17 last year, to address regulatory barriers tied to public blockchains, using ZKsync technology to cut costs and boost efficiency.

The partners expect to deliver a minimum viable product in the second half of 2025, though no specific launch date has been given.

Regulatory alignment and rollout

Boon-Hiong Chan, Deutsche Bank’s innovation lead for securities and technology advocacy, said the project demonstrates how public blockchains have matured for institutional finance and how applied technologies can achieve resilience and compliance through a single platform. He added that familiar workflows and low learning curves remain essential for adoption.

The litepaper describes modular compliance tools, on-chain investor registries, and expense management features. Privacy would be managed through allowlisted wallets and private RPC endpoints, while Axelar’s hub-and-spoke model could isolate compromised chains if necessary.

Axelar co-founder Sergey Gorbunov called DAMA 2 a compliant pathway for institutions to enter the digital assets space and scale securely across multiple blockchains, noting that vendor fragmentation and isolated liquidity remain industry challenges.

Settlement finality would tie back to Ethereum proofs, and legal agreements would define clear transfer points on layer-2 networks.

Nicola Lanteri, CEO of Memento Blockchain, said the planned Memento ZK Chain would combine a permissioned sequencer with zero-knowledge proofs to give institutions predictable control while preserving the openness of public blockchain networks.

The litepaper projects that asset managers could tap into an estimated $84 trillion intergenerational wealth transfer by 2045, citing Cerulli Associates, and positions DAMA 2 as a way to reach digital-native investors.

Mentioned in this article

We look forward to announcing the launch of a regulated crypto derivative in Europe and providing clients and partners with access to a range of liquid futures equipment within an all-recognized regulatory framework.

Eligible clients and partners in the European Economic Area (EEA) are now able to trade a wide range of crypto derivatives, including both permanent and fixed maturity agreements. These products comply with the Financial Instruments Directive (Mifid II) market and offer them through MIFID-regulated investment companies that we acquired earlier this year.

One of Europe’s most fluid onshore regulatory brokers and crypto derivative exchanges, Kraken Derivatives offers facility-grade infrastructure, strong local FIAT support and flexible collateral options. This allows traders to optimize capital allocation and manage risk more effectively. The launch of MiFID controlled futures is an important step to strengthening our market position by providing these benefits under a reliable regulatory regime.

“Europe is one of the fastest growing regions for digital asset trading and investment, some of the most sophisticated and demanding clients and institutions,” says Shannon Kurtas, head of Kraken. “The launch of regulated derivatives in Europe is very timed to meet this growing demand, highlighting our commitment to providing reliable and compliant access to the best markets and trading opportunities.”

Since acquiring its first regulated crypto derivatives venue in 2019, it has built one of the deepest global liquidity pools for crypto-trading derivatives. The deployment of the mid-fid control derivative marks another major milestone. This strengthens our leadership as a comprehensive and compliant platform for crypto trading in Europe.

Kurtas added: “With a regulated framework, clients and partners are increasingly looking for comprehensive products. This launch allows futures to be traded seamlessly as part of a complete product from one of Europe’s most established platforms.

Our new derivative offerings are available through Payward Europe Digital Solutions (CY), a Cyprus-based entity regulated under MiFID II.

‘;
const menuClose = document.querySelector(‘.menu-close’);

// Toggle the menu when the menu button is clicked
menuToggle.addEventListener(‘click’, function() {
hamburgerMenuWrapper.classList.toggle(‘show’);
});

// Close the menu when the close button is clicked
menuClose.addEventListener(‘click’, function() {
hamburgerMenuWrapper.classList.remove(‘show’);
});
});

jQuery(document).ready(function($) {
var searchOverlay = $(‘.search-overlay’);
var searchToggle = $(‘.search-icon’);
var closeSearch = $(‘ב);

searchToggle.click(function() {
searchOverlay.toggle();
$(‘body’).toggleClass(‘search-open’);
if ($(‘body’).hasClass(‘search-open’)) {
$(‘body’).css(‘overflow’, ‘hidden’);
searchOverlay.prepend(closeSearch);
$(‘.search-field’).focus();
} else {
$(‘body’).css(‘overflow’, ‘auto’);
closeSearch.remove();
}
});

searchOverlay.on(‘click’, ‘.close-search’, function() {
searchOverlay.hide();
$(‘body’).removeClass(‘search-open’);
$(‘body’).css(‘overflow’, ‘auto’);
closeSearch.remove();
});
});