Blockchain & Digital Assets Weekly Briefing - Week 38
- danae317
- Sep 19, 2025
- 15 min read
Updated: Sep 20, 2025
Week ending 19th September 2025
Welcome to this week’s pulse on the digital asset frontier: USA₮ is live, giving Tether a U.S.-regulated edge; Google’s AP2 nudges stablecoin payments into the agentic web; the SEC’s crypto-ETF pivot sees Grayscale, Bitwise, and others gearing up; BDACS launches KRW1, South Korea’s first stablecoin; and the London Stock Exchange debuts its first bitcoin-staking ETP. Beyond the Brief, we delve into PayPal’s reinvention, from a simple checkout button to an AI-powered financial powerhouse.
USA₮ is here: Tether finally rolls out its U.S.-regulated stablecoin.
Google’s AP2: bringing stablecoin payments to the agentic web.
SEC opens floodgates: Grayscale, Bitwise & others gear up as crypto-ETF rules shift.
BDACS bets on KRW1: South Korea’s new stablecoin bridges banks, blockchain.
London Stock Exchange sees first bitcoin‐staking ETP — a step forward, with caveats.
Beyond the Brief
USA₮ is here: Tether finally rolls out its U.S.-regulated stablecoin
Tether Ltd. has taken its next major step in the stablecoin market with the announcement of USA₮, a planned U.S.-regulated, dollar-backed token, and the appointment of Bo Hines as CEO of Tether USA₮. Here's a breakdown of what we know so far—and what remains uncertain.
“Tether is already one of the largest holders of U.S. Treasuries because we believe deeply in the enduring power of the dollar. USA₮ is our commitment to ensuring that the dollar not only remains dominant in the digital age, but thrives – through products that are more transparent, more resilient, more accessible, and more unstoppable than ever before.” said Paolo Ardoino, CEO of Tether.
What Tether Is Announcing
USA₮ Stablecoin
Designed to comply with the newly enacted GENIUS Act, U.S. legislation governing stablecoin issuance.
Aimed at businesses and institutions as a digital alternative to cash and traditional payment systems.
Will be backed by "transparent reserves" and subject to strong governance.
Leadership Change
Bo Hines—former Executive Director of the White House Crypto Council—will serve as CEO-Designate of Tether USA₮.
Anchorage Digital, a federally regulated crypto bank, will issue USA₮ under the GENIUS Act framework.
Cantor Fitzgerald will act as the reserve custodian and preferred primary dealer.
Existing Tether Context
Tether’s existing stablecoin, USD₮, has a market cap over $170 billion.
The firm claims nearly 500 million users globally, especially among underbanked and underserved communities.
Financially, Tether reported profits exceeding $13B in 2024 and estimates continuing strong results for 2025.
What This Means—and What to Watch
Potential Strengths | Risks and Open Questions |
• Regulatory alignment: USA₮ aims to meet U.S. stablecoin regulation head-on via the GENIUS Act. This could reduce friction with regulators. | • Regulatory compliance is often easier in theory than practice. How “regulated” USA₮ will be, in practice, will depend on enforcement, audits, and oversight. |
• Transparency claim: Backed reserves, well-known custodians, and U.S. banking partners suggest a push toward credibility. | • Reserve transparency has been a flashpoint for stablecoins. Audits, frequency of reporting, and actual reserve composition will matter. |
• Leveraging Tether’s infrastructure: Global distribution network, existing experience, and scale give USA₮ a potential launch advantage. | • Reputation risk: Tether has been under scrutiny in past years over reserve disclosures. Stakeholders may remain skeptical until USA₮ proves itself. |
• Leadership with regulatory and policy experience: Bo Hines’ background suggests Tether is serious about governance and regulatory engagement. | • Competition and differentiation: Other regulated stablecoins already exist or are in development. USA₮ will need to distinguish itself to gain trust and adoption in the U.S. market. |
Critical Observations
Purpose vs. Legal Tender: USA₮ will not be legal tender and will not be insured by U.S. institutions like FDIC or SIPC.
Scalability & Adoption: Though Tether emphasizes USA₮ will serve businesses and institutions, the path to widespread usage in the U.S. remains to be charted. Regulatory acceptance, technical integration, and public trust will all be critical.
Tether’s unveiling of USA₮ and the appointment of Bo Hines mark a bold effort to cement its role in a more regulated U.S. stablecoin landscape. The move signals that Tether believes the future of stablecoins in America will depend heavily on regulatory compliance, transparency, and strong governance.
Yet, speed of adoption, regulatory details, and trust are not guaranteed. How USA₮ performs—and whether it delivers on its promises—will be watched closely by regulators, financial institutions, and the broader crypto community.
Google’s AP2: bringing stablecoin payments to the agentic web
Google has introduced the Agent Payments Protocol (AP2), an open standard designed to let AI applications ("agents") initiate payments under strict user-approved conditions. The protocol is backed by over 60 partners, including Coinbase, the Ethereum Foundation, Salesforce, American Express, and PayPal. While stablecoin support has drawn headlines, AP2 is payment-agnostic: it covers cards, bank transfers, and digital assets. The initiative highlights how Google is positioning itself at the center of the agentic web, where AI and crypto-powered payments converge.
What AP2 Is
AP2 is a framework to make agent-initiated payments secure, auditable, and interoperable. It is:
Open source: Built as a public standard, not a closed Google product.
Multi-rail: Works across traditional payment systems and newer crypto networks.
Partner-driven: Co-developed with over 60 companies across tech, finance, and crypto.
At its core, AP2 relies on "Mandates" — cryptographically signed instructions defining what an agent can do. These mandates are paired with verifiable credentials to ensure accountability.
Mechanics: How AP2 is Designed to Work
Mandates & verifiable credentials: To preserve user control, AP2 uses "mandates" — cryptographically signed digital contracts — that define what an agent is authorized to do. These could be real-time interaction mandates (with user present) or delegated mandates (pre-authorized tasks with rules, thresholds, etc.).
Auditability & accountability: Each mandate serves as a tamper-proof record, creating an audit trail. If there's fraud or a mistake, the framework is supposed to allow tracing who did what and under what user-given mandate.
The Crypto Angle: x402 Extension: To support stablecoin payments, Google worked with Coinbase and the Ethereum Foundation among others to develop the x402 extension. This component enables AI agents to transact using stablecoins, positioning them as one option among multiple payment methods.
Why This Matters
Google’s role in the agentic web: By embedding stablecoin functionality in AP2, Google is actively shaping how AI agents will operate in digital commerce.
Integration of Web2 and Web3: AP2 lowers barriers between traditional finance and crypto, potentially normalizing stablecoin use in mainstream applications.
Enabling agent-driven commerce: With secure guardrails, AI agents could handle small purchases, subscriptions, or automated tasks on behalf of users.
Open standard credibility: By making AP2 public and involving a wide ecosystem, Google increases the chance of industry adoption.
Risks and Open Questions
Security: Autonomous agents increase the attack surface. Even with mandates, bugs or misuse could expose users.
Privacy: Audit trails improve accountability but may leak sensitive user or agent data if not carefully managed.
Regulatory compliance: Stablecoin integration invites scrutiny from regulators, especially across jurisdictions.
Adoption hurdles: For AP2 to succeed, merchants, wallets, and financial institutions must actually implement it. Competing standards could fragment the landscape.
Google’s AP2 launch signals a serious push to standardize how AI agents handle payments. By combining cryptographic safeguards, open collaboration, and multi‑rail flexibility, AP2 could reshape the infrastructure of digital commerce. Yet success depends on adoption, regulatory clarity, and user trust. If those challenges are met, AP2 may become the backbone of payments in an AI‑driven economy. Back in March 2024, we anticipated this trajectory, writing that: "With crypto's inherent decentralization, global accessibility, accelerated transaction speeds, and diminished costs, cryptocurrencies emerge as the putative choice within AI economies." You can revisit that analysis in our article here.
SEC opens floodgates: Grayscale, Bitwise & others gear up as crypto-ETF rules shift
The New Landscape for Crypto ETFs
The U.S. Securities and Exchange Commission (SEC) has introduced sweeping regulatory changes that promise to dramatically alter how crypto-related exchange-traded funds (ETFs) are launched, approved, and traded. These changes are speeding up pathways for diversified crypto exposure and prompting a wave of filings from asset managers.
What Just Changed
Generic Listing Standards. Under the new rules, exchanges like NYSE, Nasdaq, and Cboe can adopt generic listing standards for spot cryptocurrency and spot commodity ETFs. Previously, each listing required a unique, back-and-forth regulatory review process—both from the exchange and the fund manager.
Faster Approvals. The SEC’s reforms trim the longest possible approval timeline from ~240 days to about 75 days for many applications. That’s a substantial cut in red tape.
Expanded Eligible Cryptos. Until now, Bitcoin and Ethereum dominated the small set of assets approved for spot ETFs. Under the new regime, other tokens like Solana, XRP, Cardano, and even meme coins (e.g., Bonk) are in play—provided they meet certain criteria, such as having regulated futures contracts for six months.
"This is a watershed moment in America’s regulatory approach to digital assets, overturning more than a decade of precedent since the first bitcoin ETF filing in 2013," Teddy Fusaro, president of Bitwise Asset Management in Reuters report.
Key players & moves
Grayscale: The commission approved listing and trading of Grayscale’s Digital Large Cap Fund (GDLC), the first multi-crypto ETP approved under the new framework — a watershed for multi-asset crypto products.
Bitwise: Bitwise filed for a Stablecoin & Tokenization ETF — a sign that managers are now designing hybrid, thematic products rather than pure spot wrappers.
A flood of filings: Dozens of applications landed at the SEC almost immediately — everything from Avalanche and Sui to meme-coin-adjacent proposals — as issuers race to exploit the faster timetable. Expect heavy volume of filings and prospectuses in the coming weeks.
Options approval on Cboe indexes: The SEC also approved the listing and trading of p.m.-settled options on the Cboe Bitcoin U.S. ETF Index (CBTX) and the Mini-Cboe Bitcoin U.S. ETF Index (MBTX) — including third-Friday expirations, nonstandard expirations and quarterly index expirations — expanding hedging and trading tools tied to bitcoin ETF exposures. This approval signals the industry’s move to more standard derivatives infrastructure around ETF products.
Why this matters — the upside
Faster market access: Shorter approval windows and generic standards reduce time and cost to market, encouraging experimentation and specialised thematic ETFs.
Product diversity: Managers are already proposing multi-crypto baskets, tokenization/stablecoin hybrids, and even meme/altcoin funds — broadening what regulated retail and institutional investors can buy.
Deeper markets / hedging: Allowing p.m.-settled options on bitcoin-ETF indexes gives institutions better tools to hedge or express views without holding spot crypto directly.
Grayscale's Digital Large Cap Fund (GDLC): the first U.S. multi-crypto ETF
Grayscale Investments — the largest digital asset manager in the U.S. — runs dozens of single-asset trusts (BTC, ETH, SOL, XRP, and more) and several diversified products. Among them, the Grayscale Digital Large Cap Fund (GDLC) has been one of its flagship offerings, holding a basket of major cryptocurrencies. Until now, GDLC operated as an over-the-counter ETP, which meant it often traded at steep premiums or discounts to its net asset value (NAV).
With the SEC’s latest approval, GDLC will convert into a fully listed ETF, becoming the first multi-crypto ETF cleared under the new framework. That conversion is significant: once trading on a national securities exchange, GDLC will benefit from intraday liquidity, tighter alignment with NAV, and the same structure investors already know from traditional stock and bond ETFs. This marks both a milestone for Grayscale and a broader turning point for multi-asset crypto products in regulated U.S. markets.
Bitwise’s Stablecoin & Tokenization ETF: A Fresh Angle
The newest filing that’s raising eyebrows is Bitwise’s “Stablecoin & Tokenization ETF”.
Here’s how it works and why it’s different:
Dual-sleeve structure (50/50 split): One sleeve invests in equities: companies tied to stablecoins and tokenization (issuers, infrastructure providers, payment processors, exchanges, retailers). The other sleeve holds crypto assets / regulated crypto ETPs: exposure to foundational infrastructure (like oracles), plus regulated ETPs tied to BTC and ETH.
Risk / diversification features: The index backing the ETF will be rebalanced quarterly. Maximum weight for any single crypto ETP in the crypto sleeve is capped (22.5%) to avoid concentration risk.
Regulatory tailwinds: Bitwise’s filing comes at a time when new rules make ETF launches easier (generic listing, faster reviews), and after legislation like the GENIUS Act has brought more clarity for stablecoins.
Surge in Crypto ETF Filings
The U.S. Securities and Exchange Commission (SEC) is currently reviewing a record 92 cryptocurrency exchange-traded fund (ETF) applications, reflecting a significant surge in digital asset investment products.
Notable filings include Bitwise’s spot Avalanche ETF, REX XRPR Growth & Income ETF, which focuses on Ripple's XRP token, and YieldMax Bitcoin Option Income Strategy ETF, offering exposure to Bitcoin options or Tuttle Capital Management's spot Bonk ETF, which focuses on Solana's memecoin BONK. These developments indicate a more accommodating regulatory environment, potentially enhancing access to regulated crypto investment vehicles for both institutional and retail investors.
Eric Balchunas, Bloomberg ETF expert, expect to see 100 crypto ETFs launched in the next 12 months.
Risks and unanswered questions
Not every token qualifies. The new route includes objective gates (liquidity, futures markets, custody, etc.). Many tokens being pitched may still fail to meet those standards.
Operational & legal frictions remain. Clearing, custodial arrangements, index methodology disputes, service-provider readiness and prospectus nuances can still delay launches even after rule approval.
Investor protection concerns. The expanded menu — including meme and highly speculative tokens — raises the risk of mis-selling and retail exposure to extreme volatility. Product design (caps, rebalancing, disclosure) will matter a lot.
Competition & differentiation: With many similar filings, fee schedules, index construction, and transparency will determine winners — not just first-to-market.
BDACS bets on KRW1: South Korea’s new stablecoin bridges banks, blockchain
South Korea’s digital asset landscape may be shifting. BDACS (Blockchain Digital Asset Custody Service) has officially launched KRW1, a stablecoin pegged to the South Korean won, after completing a full proof-of-concept (PoC) with Woori Bank. The development marks a notable step toward integrating traditional banking with blockchain infrastructure — and raises important questions about regulation, scale, and competition.
What is KRW1 & How Does it Work?
Pegging and Collateral: Each KRW1 token is fully backed by South Korean won held in escrow at Woori Bank.
Technical Infrastructure: Issuance, custody, user app (for peer-to-peer transfers & transaction verification) — all have been built by BDACS.
Blockchain Backbone: KRW1 is initially issued on the Avalanche blockchain, selected for its speed, security, and scalability.
Banking Partnership: Woori Bank played a dual role — safeguarding collateral and participating in the PoC.
Why It Matters
First-Mover in Regulation-Uncertain Territory. BDACS trademarked “KRW1” in December 2023, anticipating stablecoin demand even before a firm regulatory framework was in place. This positions the company as an early entrant in a market that is still feeling for its boundaries.
Combining TradFi & DeFi Elements. By integrating banking (escrow, real-bank deposits), legal oversight, and blockchain transaction verification, the project aims to bridge the gap between traditional finance and digital assets. This could enhance trust among regulators and users.
Potential Use Cases are Broad. BDACS envisions KRW1 being used for payments, remittances, investments, and public sector applications (e.g. emergency relief distributions).
Regulatory Horizon: Digital Asset Basic Act. The company expects KRW1 might become a model standard under South Korea’s forthcoming Digital Asset Basic Act.
Key Challenges & Open Questions
Regulatory Ambiguity: Though the PoC was “technical only” and did not involve public circulation, stablecoins often raise complicated legal issues (money-transmission, securities rules, etc.). How the final regulations will handle these remains to be seen.
Trust & Auditability: Real-time banking API for proof of reserves is solid, but users and external auditors will likely demand very high transparency. Any mis-step could undermine credibility.
Scalability & Interoperability: Starting on Avalanche is a strong choice, but whether KRW1 will expand reliably to other blockchains (for global remittances or cross-chain use) is still in the works.
Competition: Big tech, global stablecoin issuers, and perhaps future central bank digital currencies (CBDCs) could compete. BDACS is playing early, but defending that lead won’t be simple.
Adoption Hurdles: Public, institutional, and governmental adoption require more than technical feasibility — user trust, regulation, integration with existing financial systems, and fees will all play big roles.
London Stock Exchange sees first bitcoin‐staking ETP — a step forward, with caveats
In a notable development for regulated crypto products, DeFi Technologies’ Valour Digital Securities Limited has launched 1Valour Bitcoin Physical Staking (1VBS), the first physically-backed Bitcoin staking Exchange Traded Product (ETP) listed on the London Stock Exchange (LSE). The product aims to offer investors exposure to Bitcoin, with the added benefit of staking yield — all within a regulated and transparent wrapper.
"With this product, Valour currently offers investors the ability to earn a yield of 1.4% on properly custodied Bitcoin from a regulated, exchange-listed instrument. Listing the first BTC staking product on the LSE is a true milestone, bridging traditional capital markets with the dynamic opportunities of decentralized finance” commented Olivier Roussy Newton, CEO of DeFi Technologies,
What’s New
What it is: 1VBS is an ETP that holds actual Bitcoin (“physically backed”) in cold storage. It adds staking rewards (currently ~1.4% annually) to the net asset value (NAV) of the ETP.
Regulatory & structural features: The underlying Bitcoin is stored in institutional-grade cold custody via Copper. Investors receive daily published asset entitlements and indicative prices; there is no leverage. The ETP is listed in GBP (on LSE) and EUR (via Xetra) for professional and institutional investors.
Strategic importance: Valour already issues over 85 digital‐asset ETPs across major European exchanges. This launch is presented as a bridge between decentralized (DeFi) and traditional finance.
Why It Matters
a. Regulated exposure with yield: For many institutional and professional investors, getting yield on Bitcoin in a regulated format is a gap in product offerings. 1VBS addresses that by combining staking returns with regulated ETP mechanics.
b. Risk reduction via custody and transparency: Cold storage and daily transparency alleviate some of the security and counterparty risks inherent in many crypto investment vehicles.
c. Proof of demand & market maturation: The launch demonstrates continued evolution of digital-asset infrastructure. It signals appetite for more sophisticated products in major financial markets like London, which may encourage competitors and regulatory developments.
Critical Considerations & Risks
Yield variability & costs: The 1.4% staking yield figure is current, but yield from staking can fluctuate depending on network conditions, fees, and operational costs. Moreover, costs (custody, insurance, admin) may erode returns.
Regulatory risk and oversight: While being listed on a regulated exchange helps, crypto regulatory regimes remain in flux. Changes in UK, European, or global rules could impact how this product operates or is taxed.
Concentration & ecosystem risk: The product depends on the integrity and security of the staking process, Bitcoin protocol mechanics, custodial arrangements, and third‐party service providers (e.g., the cold storage provider). Failures or attacks in any of those could impact investors.
Investor audience limitations: The ETP is aimed at professional and institutional investors, not retail. This limits accessibility and may restrict the volume or diversity of adoption.
Competition & market saturation: As more products offering staking yields emerge, differentiation—on yield, fees, security—will become more important. Investors will compare this ETP to others, both regulated and unregulated.
Beyond the Brief
PayPal’s reinvention: from checkout button to AI-powered money machine
PayPal isn’t trying to be PayPal anymore. The company that once defined the “checkout button” is reshaping itself around AI, agentic commerce, and its stablecoin, PYUSD. Two recent partnerships — one with Perplexity in May, and another with Google just this week — show a clear direction: PayPal wants to be the invisible financial engine behind how AI agents transact.
"Through this partnership, PayPal will use our industry-leading AI to enhance services and security, and we will more deeply integrate PayPal's innovative payment capabilities for a better experience across Google products and platforms" said Sundar Pichai, CEO of Google and Alphabet.
The timing is not accidental. Google just announced its Agent Payments Protocol (AP2), a new open standard for secure, agent-led payments. PayPal is one of the listed collaborators, alongside heavyweights like Mastercard, Coinbase, and American Express. AP2 is designed to solve the trust problem when AI agents, not humans, are the ones pressing “buy” — ensuring authorization, authenticity, and accountability. In other words, the rails for agentic commerce are being laid, and PayPal is hitching its stablecoin and services to that train.
The Partnerships That Matter
Perplexity (May 2025): PayPal became the payments backbone for Perplexity Pro. In practice: when a user tells the AI to book something, PayPal and Venmo process the transaction invisibly. The checkout button disappears into the AI.
Google (September 2025): PayPal’s services — branded checkout, Hyperwallet, payouts — are being woven into Google’s ecosystem (Play, Cloud, Ads). On the flip side, PayPal will lean on Google’s AI to strengthen fraud detection, security, and payments automation. This partnership is less about consumer flash, more about scale. If AI-driven commerce becomes mainstream, PayPal wants to ride Google’s distribution.
PYUSD: The Quiet (and Small) Anchor
All of this would be half a story without PYUSD, PayPal’s stablecoin. Since its 2023 launch, PYUSD has been expanding beyond a crypto curiosity:
It’s rolling out across multiple blockchains for interoperability.
It’s being positioned for remittances, peer-to-peer payments, and merchant use.
It’s now tied into features like “PayPal Links,” which let people send money (including PYUSD) with a simple shareable link.
But let’s be clear: PYUSD is still small. As of now, it sits around $1.3 billion in market cap, making it the 10th-largest USD stablecoin on CoinMarketCap. By comparison, Circle’s USDC towers at $74 billion — more than 50 times larger. Tether, of course, is bigger still. So while PayPal is serious about pushing PYUSD, it remains a minnow swimming in a very crowded, whale-filled pond.
That could change, though, with the launch of Google’s AP2 protocol, which explicitly supports stablecoin payments alongside traditional rails. If agentic commerce takes off, and AI agents are allowed to transact directly in stablecoins, PayPal suddenly has a pathway to make PYUSD matter in a way its market cap doesn’t yet reflect.
Why This Matters
If PayPal pulls this off, it won’t just be the company that helped you eBay a DVD in 2005. It could become the infrastructure provider for an entirely new way of shopping — one where we don’t browse, we just ask.
But there are big question marks:
Competition: Visa, Mastercard, Stripe, and crypto-native projects are all eyeing the same AI-commerce future. PayPal has first-mover advantage in visibility, but not necessarily in speed.
Scale problem: PYUSD is still dwarfed by USDC and USDT — unless AP2 creates a lane where size matters less than integration.
WHAT WE ARE READING (OR WATCHING)
The Cryptography Frontier
Nvidia partners with UK crypto miner’s arm as part of AI push: Report
The Stablecoin Standard
Bank of England Plan to Cap Stablecoin Holdings Draws Fire From Crypto Sector
Governance Watch
UK-US ‘Tech Bridge’ Should Include Blockchain, Lobby Groups Say
The Ethereum & Altcoin Atlas
Ethereum Fusaka Upgrade Set for December 3 Mainnet Launch, Blob Capacity to Double
Beyond the Chain
This article is for informational purposes only and should not be considered financial advice. Please do your own research or consult a licensed financial advisor before making investment decisions.
