Blockchain & Digital Assets Weekly Briefing - Week 39
- danae317
- Sep 26, 2025
- 11 min read
Updated: Oct 2, 2025
Week ending 26th September 2025
Welcome to this week’s Digital Asset briefing, where the world of crypto and stablecoins is moving faster than ever. 9 European banks are flexing their €4 trillion muscle with plans for a euro-backed stablecoin, signaling a new chapter in mainstream adoption. Meanwhile, Kaia is setting its sights on Asia, unveiling a strategy to unify the region’s stablecoin ecosystem at KBW 2025’s Stable Gathering. Across the Atlantic, Morgan Stanley is preparing to bring crypto trading to E*Trade in 2026, with Bitcoin, Ether, and Solana on the horizon. Governments aren’t standing still either: the US and UK are shaping global finance through the Transatlantic Taskforce for Markets of the Future, while the CFTC kicks off a pioneering initiative around tokenized collateral and stablecoins in the derivatives markets.
€4 trillion muscle: Europe’s banks push a euro stablecoin.
Kaia unveils strategy to connect Asia’s stablecoin economy during Stable Gathering at KBW 2025.
In 2026, Morgan Stanley brings crypto trading to E*Trade: Bitcoin, Ether, and Solana on the horizon.
Shaping global finance: US and UK drive digital assets with Transatlantic Taskforce for Markets of the Future.
CFTC kicks off tokenized collateral & stablecoin push in derivatives markets.
€4 trillion muscle: Europe’s banks push a euro stablecoin
Nine major European banks — including ING (Netherlands), UniCredit (Italy), CaixaBank (Spain), KBC (Belgium), Danske Bank (Denmark), SEB (Sweden), Raiffeisen Bank International (Austria), DekaBank (Germany), and Banca Sella (Italy) — have announced a joint plan to issue a euro-denominated stablecoin. The token is slated for launch in 2026, under the supervision of the Dutch central bank and in line with the EU’s new Markets in Crypto-Assets Regulation (MiCAR).
Together, these institutions represent roughly €4 trillion in combined balance-sheet assets. That sheer financial weight dwarfs U.S. stablecoin issuer Circle, whose USDC currently has around $74 billion in circulation. In theory, the banks have the credibility, capital, and customer reach to anchor a euro stablecoin at scale.
The Challenges Ahead
But a fat balance sheet does not guarantee success. The consortium faces several hurdles:
Regulatory and central bank scrutiny: European policymakers remain cautious about private money. Even if the stablecoin ticks every MiCAR box, the European Central Bank (ECB) will want safeguards to prevent monetary policy distortions or systemic risks.
Adoption and network effects: Circle and Tether dominate because their tokens are liquid, exchange-listed, and deeply embedded in crypto and fintech rails. European banks must convince not just institutions, but also exchanges, merchants, and DeFi developers to actually use their token.
Competition with the digital euro: The ECB is moving forward with its own digital euro project, currently in a preparation phase that could see first issuance around 2028–2029. If the central bank launches its own CBDC, demand for a private euro stablecoin could be muted — or the two could clash in the same payments space.
Operational governance: While the stablecoin will be managed by a newly created joint company — simplifying reserve management, compliance, and technical operations — challenges remain. Strategic decisions will still require consensus among nine large shareholder banks, and real-world adoption depends on how actively each institution integrates the token into its own systems and services. If additional banks join later, coordination on upgrades, integrations, and customer offerings could become even more complex.
What’s Already in the Works
The consortium’s project won’t exist in a vacuum. Europe already has several euro-denominated digital money initiatives:
Digital euro (CBDC): The ECB is in the middle of a multi-year design and testing phase. Legislation is expected in 2026, with a rollout possibly by the end of the decade (2029).
EURAU: Launched in Germany in July 2025 by AllUnity (a joint venture with Deutsche Bank’s DWS, Flow Traders, and Galaxy Digital), EURAU is the first fully MiCAR-compliant euro stablecoin approved by BaFin, Germany's Federal Financial Supervisory Authority.
Société Générale's EUR CoinVertible (EURCV): Introduced in April 2023 by SG-FORGE, the crypto arm of Société Générale, EURCV is a euro-backed stablecoin available on Ethereum. Despite regulatory approval and listing on exchanges like Bitstamp, its adoption has been limited, with approximately €56 million in circulation as of September 2025.
EUROe: A Finnish-based, EU-regulated stablecoin backed 1:1 by euros, already live on Ethereum and Polygon.
Against this backdrop, the banks’ plan looks less like a lone pioneer and more like an attempt to establish a pan-European standard backed by incumbents, rather than leaving the field to crypto-natives or regulators alone.
The combined €4 trillion firepower of these nine banks gives the project credibility and potential scale. But success will hinge less on balance-sheet size and more on regulatory approval, network adoption, and interoperability with Europe’s broader digital finance agenda.
If it works, this could become the euro’s flagship entry into the digital assets world. If it stumbles, it risks becoming just another well-funded experiment overshadowed by U.S. stablecoins — or eventually by the ECB’s own digital euro.
Kaia unveils strategy to connect Asia’s stablecoin economy during Stable Gathering at Korean Blockchain Week 2025
At the Kaia Stable Gathering during Korea Blockchain Week (KBW) 2025, Dr. Sam Seo, Chairman of the Kaia DLT Foundation, announced Kaia’s stablecoin strategy aimed at bringing together the world's largest and most fragmented payment market—Asia. This strategy introduces Kaia's Stablecoin Orchestration Layer, a Web3 super-app developed with LINE NEXT, and the K-STAR alliance for KRW stablecoin issuance.
Why Asia Is Central to Stablecoins
Asia represents a critical market for digital assets. According to Citi, the global stablecoin market could reach $3.7 trillion by 2030, with Asia driving much of that growth. The region spans 49 countries, nearly 5 billion people, and accounts for close to half of global GDP.
However, payment systems across Asia remain fragmented. Annual remittances to the region exceed $130 billion, often at high cost. Meanwhile, cross-border e-commerce in Southeast Asia, Korea, and Japan is forecast to rise by 70% by 2027, with regional tourism spending projected to climb 334% in the same period. These dynamics create demand for more efficient, cost-effective, and interoperable financial infrastructure.
Kaia’s Three-Pillar Approach
Stablecoin orchestration layer
At the core of Kaia’s plan is a Stablecoin Orchestration Layer, designed to connect stablecoin issuers, users, and applications across Asia. Key features include:
Liquidity Hub to aggregate stablecoin liquidity across issuers.
Yield Engine offering returns for stablecoin holders through integrations like SuperEarn.
FX Engine enabling efficient cross-currency swaps (e.g., KRW to THB).
On/Off-Ramps for compliant fiat-to-stablecoin conversions.
SDKs and APIs to let developers embed payments, transfers, and yield into apps.
This layer aims to reduce barriers such as high remittance costs, inconsistent regulations, and limited interoperability.
Project Unify: a stablecoin super-app
Kaia also unveiled Project Unify, developed with LINE NEXT. The app will allow users to send, spend, and earn with stablecoins across multiple currencies—including the Japanese yen, Thai baht, Korean won, and US dollar.
Project Unify will be available both as a standalone Kaia-powered service and as a Mini Dapp within LINE, leveraging the platform’s large user base. The app will be non-custodial, giving users control of their assets, and will also provide SDKs for issuers and developers to expand cross-border distribution and integration.
K-STAR: KRW stablecoin alliance
To strengthen the Korean won’s role in digital finance, Kaia announced K-STAR (KRW Stablecoin Tech Alliance for Revolution). Founding partners include:
Open Asset – infrastructure for tokenized assets and stablecoins.
In August 2025, Open Asset secured a strategic investment of 5 billion KRW from Dozn, a financial connectivity provider. This partnership aims to integrate Open Asset’s stablecoin issuance platform with Dozn’s payment infrastructure, facilitating the launch of a general-purpose KRW-pegged stablecoin and offering white-label issuance services for companies seeking to issue stablecoins under their own brands.
Lambda256 – blockchain arm of Dunamu, operator of Upbit (one of South Korea's largest cryptocurrency exchanges).
AhnLab Blockchain Company (ABC) – cybersecurity and compliance tools for KYC/AML.
In August 2025, ABC signed a memorandum of understanding with Open Asset and the Korea Simple Payment Agency to establish an offline payment ecosystem based on KRW-pegged stablecoins, aiming to integrate blockchain technology with traditional payment systems.
K-STAR will focus on compliant issuance, proof-of-reserve verification, and real-time monitoring. Settlement and liquidity will be anchored on Kaia’s K-Mainnet.
Expanding Web3 Commerce with LINE NEXT
LINE NEXT is also exploring a new partnership with Uquid, a global Web3 commerce platform. This collaboration aims to connect 180 million LINE users with Uquid’s 178 million+ products and services, leveraging Uquid’s 400 million crypto users to drive a wave of Web3-powered commerce. The partnership targets LINE’s key markets, including Japan, Taiwan, Thailand, and Indonesia, enabling Uquid to reach millions of loyal LINE chat users while supporting LINE’s global expansion.
Toward a Unified Regional Framework
Kaia’s approach emphasizes compliance and local partnerships, aiming to tailor solutions to Asia’s diverse regulatory environments. The collaboration with LINE NEXT is a cornerstone, enabling stablecoin features to be integrated into everyday applications while supporting a Web2-to-Web3 transition.
By combining orchestration infrastructure, consumer-facing applications, and localized alliances, Kaia seeks to build an interconnected stablecoin ecosystem capable of supporting Asia’s fast-growing cross-border economy.
In 2026, Morgan Stanley brings crypto trading to E*Trade: Bitcoin, Ether, and Solana on the horizon
Morgan Stanley, a financial powerhouse managing $1.7 trillion in assets, is venturing into the cryptocurrency market by partnering with Zerohash to enable E*Trade clients to trade digital assets. This move, set to roll out in the first half of 2026, aims to offer Bitcoin, Ether, and Solana trading through a platform leveraging Zerohash's infrastructure.
“Every bank that has a trading or private wealth arm will offer crypto to their customers as a spot contract,” Zerohash Chief Executive Officer Edward Woodford said in an interview.
We covered this story in our Weekly Briefing on May 2nd, discussing Morgan Stanley’s earlier steps into crypto.
Strategic Intentions
Jed Finn, Morgan Stanley's head of wealth management, emphasized that this initiative is merely the beginning. The firm plans to expand its offerings to include a comprehensive digital wallet solution, integrating both traditional and tokenized assets. This approach reflects a broader strategy to position Morgan Stanley at the forefront of digital asset management.
Zerohash's Role
Zerohash, a digital asset infrastructure provider, will supply the necessary liquidity, custody, and settlement services for the crypto trading platform. The company's recent $104 million funding round, led by Interactive Brokers with participation from Morgan Stanley, underscores its growing influence in the digital asset space.
Market Implications
This partnership places Morgan Stanley in direct competition with established players like Robinhood and Charles Schwab, who have already integrated cryptocurrency offerings into their platforms. While the move signifies a commitment to digital assets, it also exposes Morgan Stanley to the inherent volatility and regulatory uncertainties associated with the crypto market.
Regulatory Considerations
The evolving regulatory landscape, influenced by recent policy shifts, presents both opportunities and challenges for traditional financial institutions entering the cryptocurrency market. Morgan Stanley's strategic decisions will need to navigate these complexities to ensure compliance and mitigate potential risks.
Shaping global finance: US and UK drive digital assets with Transatlantic Taskforce for Markets of the Future
Following President Trump’s visit to the UK, the two governments unveiled the Transatlantic Taskforce for Markets of the Future — a collaborative effort designed to strengthen ties between their capital markets, align innovation in digital assets, and promote cross-border growth. This move signals renewed ambition on both sides of the Atlantic to modernize financial systems, attract investment, and remain competitive in a fast-changing global landscape.
What the taskforce seeks to do:
Explore near- and long-term collaboration in Digital Assets
One of the primary mandates of the Taskforce is to identify short-to-medium term joint endeavors in digital assets—while national regulations are still being shaped—and to consider how to coordinate in the longer term as markets mature. In effect, the Taskforce is meant to be a laboratory for testing regulatory interoperability, shared infrastructure, or cross-jurisdictional standards, before any full legal regimes are settled.
Enhance connectivity in capital markets
A secondary objective is to streamline cross-border capital raising and investment flows between the UK and US. By reducing frictions for firms operating transatlantically, the Taskforce hopes to boost liquidity, market efficiency, and competitiveness for both markets.
Leverage industry expertise and regulatory input
The UK and US finance ministries will not act alone. The Taskforce will be staffed by officials from HM Treasury, US Treasury, and relevant regulators on both sides (especially those overseeing digital assets and capital markets). It will actively solicit input from industry participants so that its recommendations reflect real commercial needs. Importantly, it is tasked with delivering a report within six months (180 days) to the UK–US Financial Regulatory Working Group (FRWG).
Why the initiative matters
Global positioning and innovation race
As financial innovation accelerates—driven by blockchain, tokenization, and decentralized finance—the UK and US risk being outpaced by other jurisdictions if they remain siloed. The Taskforce is an attempt to recapture strategic momentum in shaping the digital asset future.
Enhancing capital efficiency
By loosening cross-border friction, capital markets become more efficient. A startup raising in New York might find a UK investor more readily, or a UK issuer could tap US institutional pools with fewer legal and regulatory impediments.
Regulatory signaling
The establishment of a formal UK–US taskforce also sends a message—not just domestically, but globally—that both jurisdictions take digital asset regulation seriously. It may give confidence to market participants and investors who have been waiting for clearer signals.
Obstacles and risks: A reality check
Divergent legal and regulatory frameworks
The US and UK already have materially different legal foundations (e.g. securities law, financial regulation, consumer protection). Harmonizing or coordinating them is easier said than done. The Taskforce will need to reconcile those differences—even handling interpretive gaps or jurisdictional boundaries.
Regulatory capture and industry bias
Because the Taskforce explicitly includes industry input, there’s a risk that incumbent players or well-resourced firms will dominate discussions and skew outcomes toward their own interests. Ensuring fair representation of smaller innovators or public interest voices will be key.
Timing versus market evolution
Digital assets and token markets evolve rapidly. A 180-day timeframe may be too short to forge deep, durable structures, but too rigid to keep pace with innovation. The chosen tempo may force compromises over substance.
Political and geopolitical headwinds
The UK and US face domestic political pressures on financial oversight (e.g. concerns about consumer protection, systemic risk). International tensions—or changing administrations—could thwart long-term continuity. Also, coordination with other global regulators (EU, Asia) may complicate efforts to create transatlantic standards.
Implementation, not just design
Drafting a recommendations report is one thing; putting it into practice (through legislation, regulatory change, cross-border agreements) is another. The “last mile” of execution often proves the hardest.
The UK–US Transatlantic Taskforce for Markets of the Future is a strategic gamble. If successful, it could forge a uniquely powerful corridor in digital finance—connecting capital, innovation, and regulation across two of the world’s largest financial centres. But success hinges on navigating regulatory complexity, resisting bias, and moving beyond advisory reports to solid implementation.
CFTC kicks off tokenized collateral & stablecoin push in derivatives markets
On September 23, 2025, the U.S. Commodity Futures Trading Commission (CFTC) announced a new initiative under Acting Chairman Caroline D. Pham to explore the use of tokenized collateral and stablecoins in derivatives markets.
What the CFTC is proposing:
Tokenized collateral & stablecoins as margin assets
The CFTC intends to develop a framework under which tokenized collateral — including stablecoins — could serve as regulatory margin (i.e. acceptable collateral) in derivatives markets.
Invitation for public input
Stakeholders (industry participants, academics, the public) are being invited to submit comments and recommendations by October 20, 2025.
Regulatory and policy context
The initiative builds on the President’s Working Group on Digital Asset Markets’ earlier guidelines.
It also follows from the CFTC’s 2025 “crypto sprint” and the CFTC-hosted Crypto CEO Forum earlier this year.
In 2024, the CFTC’s Global Markets Advisory Committee — via its Digital Asset Markets Subcommittee (DAMS) — had already recommended expanded use of non-cash collateral via distributed ledger technologies.
Goals & anticipated benefits
According to the CFTC announcement, using tokenized collateral and stablecoins could:
Improve capital efficiency
Simplify collateral management
Unlock liquidity
Enable faster settlement and more seamless integration between traditional derivatives markets and digital-asset infrastructure
What this means for the digital asset landscape
Regulatory clarity
If adopted, the framework could provide clearer regulatory boundaries for using stablecoins and tokenized assets in traditional financial settings, reducing legal uncertainty.
Bridging TradFi and DeFi
The initiative suggests a step toward integrating tokenized financial instruments with regulated derivatives markets — potentially bridging gaps between decentralized finance (DeFi) infrastructure and conventional finance.
Risk & oversight challenges
Key questions remain around valuation, custody, reserve backing, governance, interoperability, and systemic risk. The CFTC’s call for public input indicates these will be central to any eventual rules.
Speed to market & innovation incentives
By soliciting feedback and possibly allowing pilot programs, the CFTC is signaling a willingness to experiment and iterate — which may accelerate tokenization efforts among financial institutions and crypto firms.
WHAT WE ARE READING (OR WATCHING)
Governance Watch
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.
