Blockchain & Digital Assets Weekly Briefing - Week 21

Week ending 23rd May 2025

This week, major exchanges are redefining their role as Bybit and Kraken venture into stock trading and asset tokenization, signaling a new era of market integration. In the U.S., the Senate takes a historic step forward with bipartisan momentum behind the GENIUS Act, aiming to regulate stablecoins. Meanwhile, JPMorgan's CEO makes waves defending Bitcoin access as the bank opens new investment channels. Globally, tensions rise as Russia prepares to ban USDT and similar stablecoins for individuals, while South Korea’s political landscape heats up with candidates embracing Web3 and won-backed stablecoins to capture the youth vote. Here's a breakdown of these pivotal developments.

1. Bybit and Kraken lead crypto exchanges into stock trading and tokenization revolution.

2. U.S. Senate advances GENIUS Act: pioneering stablecoin regulation gains bipartisan support.

3. JPMorgan lets clients invest as CEO says: "I defend your right to buy Bitcoin".

4. Russia set to ban Tether (USDT) and other stablecoins for individuals, starting May 26.

5. Won-backed stablecoins and the crypto vote: South Korean candidates target youth with bold Web3 pledges.

---

1. Bybit and Kraken lead crypto exchanges into stock trading and tokenization revolution

   
   

Cryptocurrency exchanges are increasingly bridging the gap between digital assets and traditional finance by offering tokenized stock trading.

Bybit's Innovation:

Bybit has become the first cryptocurrency exchange to offer direct access to global stock markets using Tether (USDT), enabling users to trade top global stocks, oil, gold and indices.

"This innovation—part of Bybit’s expanding Gold & Forex (MT5) product suite— unlocks direct trading of 78 of the most sought-after global equities—including Apple ($AAPL), Tesla ($TSLA), Meta ($META), Nvidia ($NVDA), and Amazon ($AMZN)—all powered by USDT." reads Bybit's press release.

This innovation aligns with the accelerating shift toward tokenization, a trend emphasized in BlackRock CEO Larry Fink’s 2025 letter to investors. Fink called tokenization “the next generation for markets,” highlighting its potential to improve efficiency, transparency, and access across financial systems.

Kraken's Expansion:

Kraken, another major cryptocurrency exchange, has launched commission-free trading for over 11,000 U.S.-listed stocks and ETFs. This service, initially available in select U.S. states, allows users to invest in equities directly through the Kraken app. The platform offers 24/7 order placement, with trades executed during market hours. 

Further advancing its role in tokenized finance, Kraken announced a strategic partnership with Backed, the pioneering issuer of tokenized stocks, and the Solana Foundation to launch xStocks—a new tokenized equities offering built on the Solana blockchain. Powered by Backed’s infrastructure, Kraken will offer digital representations of U.S.-listed stocks and ETFs, initially available to eligible clients in select non-U.S. markets directly through the Kraken app.

Backed’s xStocks will deploy SPL-based (Solana Program Library) tokens representing equities, bringing tokenized financial instruments to the Solana blockchain for the first time at scale. Kraken chose Solana as the launch platform for its performance, low latency, and growing global developer ecosystem.

In addition to expanding into traditional equities, Kraken has also launched a suite of regulated crypto derivatives in Europe. This offering, available through its Cyprus-based investment firm Payward Europe Digital Solutions, includes both perpetual and fixed maturity contracts under the Markets in Financial Instruments Directive (MiFID II) framework. 

These strategic moves reflect Kraken's commitment to providing a comprehensive trading platform that caters to both digital and traditional asset investors—underscoring the broader industry trend toward the tokenization of real-world assets.

2. U.S. Senate advances GENIUS Act: pioneering stablecoin regulation gains bipartisan support

On May 21, 2025, the U.S. Senate voted 69–31 to advance the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, overcoming a Democratic-led filibuster and clearing the way for full Senate debate.  This bipartisan legislation aims to establish a comprehensive regulatory framework for stablecoins—digital currencies pegged to traditional assets like the U.S. dollar. The bill mandates that stablecoin issuers maintain 1:1 reserves backed by cash, insured bank deposits, or short-term Treasury bills. It also introduces a dual regulatory pathway, allowing issuers to choose between federal oversight by the Office of the Comptroller of the Currency (OCC) or state-level supervision, provided that state regulations meet federal standards.

In parallel, House lawmakers have reintroduced the Blockchain Certainty Act, a bill first introduced in 2018 aiming at protecting "blockchain developers and service providers that never custody consumer funds from unjust government prosecution", signaling a broader legislative push to provide clarity and support for blockchain and digital asset technologies. 

The GENIUS Act includes provisions to enhance consumer protections, enforce anti-money laundering rules, and ban foreign stablecoin issuers unless they comply with U.S. law. It also prohibits executive branch officials from launching stablecoins—excluding the president and vice president—and imposes restrictions on Big Tech firms issuing their own stablecoins unless they obtain user consent.

Senator Cynthia Lummis (R-WY), a prominent advocate of digital asset innovation, voiced her strong support for the GENIUS Act. She emphasized the need for regulatory clarity to keep the U.S. competitive in financial innovation. Lummis also highlighted the growing momentum behind digital asset adoption in America, with increasing public and legislative interest in crypto technologies.

Despite the bill’s progress, critics have raised concerns that stablecoins function similarly to money market funds, which are already tightly regulated to prevent systemic financial risks. They warn that stablecoins could trigger broader financial instability if not properly managed. These fears were reinforced in 2023 when USD Coin (USDC) lost its peg to the dollar after its issuer, Circle, revealed that $3.3 billion in reserves were held at the failed Silicon Valley Bank. The federal government’s decision to guarantee all SVB deposits effectively served as an emergency backstop for USDC, raising questions about potential taxpayer exposure.

Meta Platforms is reportedly exploring the integration of stablecoins into its platforms, such as Facebook and WhatsApp, according to a Fortune article, such as Facebook and WhatsApp, to facilitate low-cost, cross-border payments for content creators. This initiative comes three years after the company shelved its Diem (formerly Libra) cryptocurrency project due to regulatory challenges. Meta is in early discussions with crypto infrastructure firms and is considering multiple stablecoins, including USDC and USDT, rather than developing its own. This move reflects Meta's renewed interest in digital currencies amid a more favorable regulatory environment.

In a significant development, major U.S. banks—including JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo—are reportedly in early discussions to launch a joint stablecoin, according to The WSJ. This initiative, aims to position traditional banks more competitively in the evolving digital financial landscape. The consortium could potentially allow other banks, beyond the co-owners, to use the stablecoin as well. This move reflects a growing convergence between traditional financial institutions and the crypto world. 

Today, digital asset legislation is gaining momentum across the U.S. A total of 147 crypto-related bills have been introduced in 40 different states. Among them, 40 states have introduced Strategic Bitcoin Reserve (SBR) bills, with two states—New Hampshire and Arizona—having already passed theirs. Texas recently approved Senate Bill 21 (SB21), which now awaits the governor’s signature.

While often framed as “state-level” developments, these legislative moves carry substantial global weight. States like Texas and Arizona are not marginal players—Texas, for instance, has a GDP of approximately $2.7 trillion, on par with Italy, and Arizona’s economy rivals that of the United Arab Emirates. If a country like Italy passed a Strategic Bitcoin Reserve (SBR) bill, it would make international headlines. The same level of attention should be given when economically powerful U.S. states take similar steps, as their influence extends well beyond national borders and plays a pivotal role in the worldwide adoption of Bitcoin and digital assets.

This wave of legislative activity signals that the U.S. is entering a new phase in the integration of digital assets into its financial and regulatory systems.

3. JPMorgan lets clients invest as CEO says: "I defend your right to buy Bitcoin"

Bitcoin has surged to a new all-time high, surpassing $111,000, driven by institutional adoption and increasingly favorable crypto regulation.

Reflecting this momentum, JPMorgan Chase—the largest U.S. bank with over $3 trillion in global assets—has decided to allow its clients to invest in Bitcoin. This marks a sharp pivot for CEO Jamie Dimon, who has repeatedly called Bitcoin a “fraud” and likened it to a “pet rock.” At the bank’s recent investor day, Dimon reiterated his personal skepticism but acknowledged growing client demand, stating, “I defend your right to buy Bitcoin. I won’t personally ever buy it.”

Dimon could have kept JPMorgan out of the crypto space, but doing so risked alienating high-net-worth individuals and institutional clients seeking portfolio diversification during a time of global financial uncertainty. While the bank will not offer custody services for Bitcoin—requiring clients to use trusted third parties—it will now permit purchases and reflect those holdings in account statements.

Meanwhile, in Texas, second largest US state by size and GDP, lawmakers have passed Senate Bill 21 (SB21) in a 101-42 vote, which establishes a Strategic Bitcoin Reserve managed by the state. The bill cleared both chambers of the legislature with more than a two-thirds majority—including a unanimous 31–0 vote in the Senate—meaning it is eligible to take effect immediately upon Governor Greg Abbott’s signature.

This positions Texas at the forefront of Bitcoin integration in public finance, reinforcing the broader institutional shift toward cryptocurrency.

4. Russia set to ban Tether (USDT) and other stablecoins for individuals, starting May 26

If you're in Russia and use Tether (USDT) or other dollar-backed stablecoins, a significant regulatory change is approaching. Starting May 26, 2025, it will become illegal for individual Russian citizens to buy, sell, or trade these assets.

What’s Changing?

Under the new rules, individuals in Russia will be prohibited from:

• Buying or selling USDT or other centralized stablecoins

• Using them for any domestic financial transactions

• Sending them abroad

These actions will be considered outside the bounds of Russian law and subject to enforcement beginning May 26.

Legal to Hold, But Not to Use

The new regulations do not prohibit the ownership of stablecoins that were acquired before the law comes into effect. Individuals may legally hold USDT as a form of digital property. However, they will no longer be allowed to exchange, sell, or spend it within Russia or abroad.

Businesses Are Exempt—For Now

The restrictions specifically target individual users. Corporations and licensed institutions may continue using stablecoins such as USDT under tightly controlled legal frameworks. This exception primarily applies to legal entities involved in international trade and operating under Russia’s experimental regulatory sandbox.

Scope of the Ban

The ban extends beyond USDT to any centralized, U.S. dollar-backed stablecoin. This includes assets that:

• Are pegged to the U.S. dollar

• Are backed by U.S. Treasuries or similar U.S.-based financial instruments

• Originate from countries designated by Russia as "unfriendly"

DAI, often considered a decentralized stablecoin, is also included under this ban due to its partial backing by USDT and USDC. Under Russian law, this makes it centralized and therefore subject to the same restrictions.

Tether’s Growing Ties to the United States

Ironically, as Russia bans USDT for its American financial associations, Tether is becoming increasingly intertwined with the U.S. economy.

According to US government data, Tether has surpassed Germany in total U.S. Treasury holdings. It is now one of the largest holders of U.S. government debt in the world—surpassing many sovereign nations.

Adding to this connection, in early 2025, Tether froze approximately $28 million worth of USDT linked to the Russian crypto exchange Garantex.

This move was part of Tether’s compliance with U.S. sanctions related to the Russia-Ukraine conflict and underscored its growing role as an enforcer of Western financial regulations. Such actions have raised concerns among Russian regulators about the vulnerability of stablecoins to geopolitical pressures.

This positions Tether more as a pillar of the traditional financial system than a decentralized alternative. For Russian policymakers, this close relationship with U.S. fiscal policy and regulatory enforcement further justifies their decision to prohibit its use.

Options for Russian Users

Individuals holding stablecoins in Russia have limited legal options going forward:

• Convert their holdings into Bitcoin or other non-centralized altcoins

• Transfer stablecoins to wallets outside Russian jurisdiction before May 26, if permissible

• Retain the coins without using or trading them

As of now, no legally approved stablecoin alternatives exist for individuals within Russia. For those wishing to remain compliant, decentralized cryptocurrencies such as Bitcoin offer the most viable path.

Russia’s decision to ban centralized stablecoins like Tether reflects a broader strategy of financial self-reliance and detachment from U.S.-influenced systems. While this may align with national policy goals, it significantly reduces digital asset flexibility for everyday users.

As Tether grows closer to the U.S. financial system, Russia is making a clean break. For users caught in the middle, adapting quickly will be essential to remaining compliant and protecting their digital assets. Once again, Bitcoin is the alternative.

5. Won-backed stablecoins and the crypto vote: South Korean candidates target youth with bold Web3 pledges

As South Korea approaches its pivotal June 2025 presidential election, candidates are engaging in an increasingly high-stakes competition—not just for votes, but for dominance in digital asset policy. In a country where over 16 million people are involved in crypto trading, much of the political focus has shifted to the youth electorate, which demands bold, forward-thinking strategies around blockchain and Web3 innovation.

Lee Jae-myung, the Democratic Party front-runner, has made headlines by pledging to introduce a government-backed stablecoin tied to the Korean won. This proposal marks a sharp expansion of his crypto-friendly platform, which already includes support for legalizing spot crypto ETFs, reducing trading fees, and strengthening consumer protections.

Lee’s stablecoin plan is aimed squarely at younger voters, many of whom have turned to digital assets in search of financial opportunity in a housing market and job climate that feel increasingly out of reach. By backing a public stablecoin, Lee signals that digital finance is no longer to be feared or simply tolerated—but structured, legitimized, and led by the state.

Meanwhile, his conservative opponent Kim Moon-soo has also embraced a pro-innovation agenda, calling for deregulation, tax cuts, and a massive public-private investment fund to accelerate AI and blockchain development. Kim supports ETF legalization but has so far stopped short of offering a government-issued crypto proposal, instead emphasizing market-led innovation.

The stablecoin announcement marks a new frontier in South Korea’s political crypto race, distinguishing Lee as the candidate willing to embed digital assets into core state infrastructure. It also reinforces a broader electoral trend: crypto is no longer just a financial issue—it’s a generational one.

Both parties understand that securing the youth vote means offering more than lip service to innovation. From ETFs to stablecoins, candidates are now judged by how seriously they take the digital future. With bipartisan momentum building, the next administration—regardless of who wins—is poised to transform South Korea into a regional powerhouse in digital finance.

WHAT WE ARE READING (OR WATCHING)

6. Moody's Ratings downgrades United States ratings to Aa1 from Aaa; changes outlook to stable

7. US House passes Trump’s showpiece tax bill

8. Major Crypto Firms Spending Millions on Personal Security

9. UK to require crypto firms to report every customer transaction

10. H100 Group Became The First Publicly Listed Bitcoin Treasury Company In Sweden

11. America Needs to Be Strong. Why Weaken Its Banks?

12. Who owns Bitcoin? BitcoinTreasuries.Net

13. SG Forge to launch a dollar stablecoin, a world first for a banking group

14. Stablecoins stoke volatility in Brazil capital flows, says central banker

15. Crypto Crime Is the Future. Bank Heists Are History.

16. Crypto's Next Bubble Will Be Politically Motivated

17. Stablecoins Will Both Replace and Entrench the Dollar

18. Can Pakistan Go Big on Crypto?