Blockchain & Digital Assets Weekly Briefing - Week 40
- danae317
- Oct 3
- 11 min read
Week ending 3rd October 2025
The crypto landscape continues to expand and evolve at lightning speed. Kazakhstan launches the Alem Crypto Fund, its national digital asset reserve. Meanwhile, businesses are embracing the stability of digital currencies, as Visa Direct enables faster payouts powered by stablecoins.
In a major move for mainstream finance, SWIFT takes its first steps onto the blockchain, experimenting with Ethereum Layer 2 network Linea to streamline global payments. The industry is also sending a warning to traditional finance: a coalition of crypto leaders declares “No more bailouts”, highlighting concerns over banking influence. On the investment front, Vanguard signals it may soon open crypto ETF trading to 50 million investors, potentially widening market access dramatically.
Beyond the Brief: A new BPI report explores why nations are increasingly turning to Bitcoin, revealing the growing appeal of neutral reserve assets in today’s financial landscape.
Kazakhstan establishes Alem Crypto Fund, its digital asset reserve with initial BNB investment.
Visa Direct powered by stablecoins: unlocking faster cross-border payments.
Swift goes on-ledger: the global payments giant embraces blockchain via Ethereum L2 Linea.
“No more bailouts”: crypto industry coalition sounds alarm over banking influence.
Vanguard considers opening crypto ETF trading to 50 million investors.
Beyond the Brief
Kazakhstan establishes Alem Crypto Fund, its digital asset reserve with initial BNB investment
Kazakhstan has officially launched the Alem Crypto Fund, its inaugural state-backed initiative aimed at establishing long-term digital asset reserves. The fund's first investment is in BNB (Binance Coin), the native token of the BNB Chain, acquired in partnership with Binance Kazakhstan.
Fund Overview
The Alem Crypto Fund was established by the Ministry of Artificial Intelligence and Digital Development of Kazakhstan and is managed by Qazaqstan Venture Group under the Astana International Financial Centre (AIFC). The primary objective of the fund is to make long-term investments in digital assets and to build strategic reserves. In the future, the fund may also serve as a vehicle for state-level savings, expanding the country’s capabilities in managing its finances.
Partnership with Binance
Binance Kazakhstan, a locally licensed arm of the global Binance ecosystem, is the fund’s strategic partner. The first BNB investment will support transactions, fee payments, and participation in network governance on the BNB Chain. As of summer 2025, BNB maintains a market capitalization exceeding $138 billion, making it a significant digital asset globally.
Binance has maintained a close partnership with Kazakhstan since 2022, when its CEO, Changpeng “CZ” Zhao, signed a memorandum of understanding with the Ministry of Digital Development to help develop the country’s crypto regulatory framework.
Recent Developments in Kazakhstan’s Crypto Ecosystem
The Alem Crypto Fund was announced shortly after Kazakhstan launched its tenge-backed stablecoin, KZTE, on the Solana blockchain, in partnership with Mastercard, Intebix, and Eurasian Bank.
Kazakhstan, with a population of around 20 million, has long been a major center for cryptocurrency mining. In 2021, the country ranked second worldwide in Bitcoin hashrate, reflecting its significant mining capacity.
In 2024, President Kassym-Jomart Tokayev called for a more transparent legal framework for digital assets after 36 unlicensed exchanges were closed. In May 2025, the government unveiled “CryptoCity”, a pilot zone for crypto payments, and later called for the creation of a strategic crypto reserve and a comprehensive digital asset ecosystem, with legislation expected by 2026.
Visa Direct powered by stablecoins: unlocking faster cross-border payments
Visa is launching a pilot program to integrate stablecoin into its Visa Direct platform. The initiative aims to help businesses move funds globally more quickly and flexibly by leveraging blockchain-based assets.
Background: The Challenge of Cross-Border Payments
Traditionally, businesses that send money across borders have had to rely on legacy infrastructure. These systems often require them to hold large fiat balances in multiple countries, incur delays (usually days), and face regulatory or cost friction.
Visa describes these systems as “outdated” and argues that the new stablecoin integration could reduce liquidity constraints and streamline treasury operations.
What Prefunding Means — and Why Stablecoins Help
When businesses make frequent, large international payments, banks typically require prefunding: depositing large sums in advance in the destination currency. For example, a company paying €1 million weekly to European suppliers might need to lock up €4.4 million upfront to cover a month of payouts plus extra for fees or currency shifts. This money often has to be deposited 3–7 days before the first payment and sits idle in the bank.
Banks rely on prefunding for several reasons: it ensures money is already available in the right currency, reduces exposure to exchange rate volatility, and prevents delays caused by multi-step cross-border transfers. It also guarantees operational certainty—payments are less likely to fail due to slow conversions, compliance checks, or errors in payment details. However, the drawback is clear: millions in working capital are tied up for weeks, restricting a company’s ability to use that cash for other expenses or opportunities.
Visa’s new prefunding stablecoin pilot changes this model. Instead of holding €4.4 million hostage, a business could send only what’s needed—say €1.1 million—right before each weekly payment. Stablecoins settle in minutes via blockchain, so suppliers get euros almost instantly.
The result: businesses free up liquidity, reduce settlement times from days to minutes, and lower costs. Stablecoins turn prefunding from a long-term cash drain into a just-in-time process, giving businesses faster, more flexible access to their own money.
How the Pilot Works
Prefunding with stablecoins: Businesses participating in the pilot will have the option to pre-fund Visa Direct using stablecoins instead of traditional fiat. Visa will treat those stablecoins as equivalent to “money in the bank” for the purpose of enabling payouts.
Recipients still receive fiat: Even though the prefunding occurs in stablecoins, payouts to end recipients can still be made in local currencies.
Eligible participants: The pilot is open to banks, remittance firms, and financial institutions with high-volume cross-border payout needs.
Rollout timeline: Visa expects to move from pilot to limited availability around April 2026.
Expected Benefits
Visa highlights several advantages:
Freed liquidity: Without needing large fiat balances tied up in multiple jurisdictions, companies can use capital more efficiently.
Faster fund movement: Stablecoin settlements can reduce payment times from days to minutes or hours.
Stability & consistency: Using stablecoins may reduce exposure to local currency volatility in the settlement process.
Modern treasury capability: The move supports more agile liquidity management for global businesses.
Significance & Outlook
This pilot represents a major step by one of the world’s largest payments networks toward combining blockchain-based assets with traditional finance rails. If the experiment succeeds, it could set a precedent for how large enterprises and financial institutions manage cross-border liquidity and payouts in the years ahead.
Swift goes on-ledger: the global payments giant embraces blockchain via Ethereum L2 Linea
In a move that signals a deeper convergence between traditional finance and digital-asset infrastructure, Swift has announced at the Sibos conference in Frankfurt, Germany that it will introduce a blockchain-based shared ledger into its technology stack.
What Did Swift Announce?
On 29 September 2025, Swift declared its intention to add a blockchain-based ledger to its core infrastructure.
This ledger is intended as a shared, real-time log of transactions among financial institutions, using smart contracts to “record, sequence and validate” transfers.
The first use case: enabling 24/7 real-time cross-border payments involving tokenized value (e.g. stablecoins or regulated digital assets).
Swift begins with a conceptual prototype, to be developed in collaboration with Ethereum infrastructure firm Consensys, as part of phase one of the development.
Over 30 financial institutions globally are participating in the design, feedback and planning of this infrastructure.
Swift emphasizes that while it builds the infrastructure, which types of tokens (stablecoins, CBDCs, tokenized deposits) to run on it will be decided in cooperation with banks, central banks, and other stakeholders.
A key goal is interoperability: the ledger must interconnect with existing systems and emerging networks.
Linea is the Chain
Recent statements from Joe Lubin, CEO of Consensys, confirm Swift is building its new payments system on Linea, an Ethereum layer-2 chain, according to a Cointelegraph report.
Linea is a zk-EVM rollup chain developed by Consensys.
It offers scalability benefits: for example, lower fees (a fraction of what transactions cost on Ethereum’s mainnet) and improved throughput.
As of the latest reporting, Linea has about US$2.27 billion in total value locked, making it among the top Ethereum L2s by TVL.
Some major banks are set to participate in trials of Swift’s rail on Linea, including Bank of America, Citi, JPMorgan Chase, and Toronto-Dominion Bank.
Joseph Chalom, ex Blackrock Crypto Chief who recently became Co-CEO at Consensys, is very bullish on Ethereum.
Why This Matters: Context & Impetus
The choice of Linea gives more clarity to the architecture. It’s not just “a blockchain” but specifically an Ethereum-L2 rollup. This has implications for compatibility, trust, smart contract environment, and potential risks.
Using Linea suggests Swift is leaning toward existing, well-established ecosystems and leveraging Ethereum’s developer base rather than building something completely proprietary from scratch.
Swift’s shift toward a blockchain‑based shared ledger signals a deliberate move to explore distributed ledger technology for cross‑border payments. While recent reports suggest that Swift may leverage Ethereum L2 solutions such as Linea in collaboration with Consensys, these details remain part of ongoing planning and have not been confirmed by Swift.
The choice of platform, token types, and regulatory frameworks will emerge gradually as prototypes and pilot tests develop. Swift’s objective is to combine its existing network reach and institutional trust with the capabilities of DLT, but the ultimate success of this initiative will depend on execution, interoperability, regulatory alignment, and trust among participants.
“No more bailouts”: crypto industry coalition sounds alarm over banking influence
On Monday, approximately 70 organizations — including major crypto firms such as Coinbase, Kraken, and the market-maker Wintermute — jointly launched a website called NoMoreBailouts.org. The initiative warns that large traditional banks are lobbying Congress to curtail certain rights currently held by crypto users, particularly around “rewards” tied to stablecoins.
Their action isn't pro-consumer, it's anti-competitive plain and simple.
What the Campaign Claims
Legislative Threats to Rewards
The campaign asserts that new market-structure legislation under consideration in Congress could grant banks the power to eliminate or restrict the rewards that users can earn from stablecoin holdings — a feature the initiative argues encourages adoption and competition.
Banks Versus Innovation
The site frames the banks’ effort as an attempt to “lock you into the same old system” with high fees and limited choice, rather than adapting to emerging technologies.
Call to Action for Congress
Visitors are encouraged to contact their senators and urge them to oppose any legislation that would limit or ban crypto rewards.
Backing from Crypto Ecosystem
The campaign is supported by numerous crypto-native firms and associations, including Coinbase, Kraken, Gemini, the Blockchain Association, Uniswap Foundation, Wintermute, and others.
Context & Implications
Why “Rewards” Are Central
Many stablecoin issuers and platforms now offer interest or yield — sometimes framed as “rewards” — to holders. These features are part of the competitive appeal of crypto relative to traditional banking products. The threat of regulatory restrictions on those rewards is a core concern for industry proponents.
Policy Stakes
The legislation in question is expected to create or update rules for how crypto markets operate. If the claims of the campaign prove accurate, one outcome could be new limits on how crypto firms can structure incentives or interest-like returns.
Power Dynamics Between Banks and Crypto Firms
The campaign’s framing positions this as a clash between entrenched financial institutions and nascent crypto-native actors. Whether or not that framing fully captures how lobbying or regulatory negotiation will play out remains to be seen.
Potential Risks for Consumers
If rewards were curtailed, users who hold stablecoins for yield could see lower returns. On the other hand, regulators may argue their role is to manage risk, protect consumers, or preserve financial stability.
Vanguard, once crypto sceptic, considers opening crypto ETF trading to 50 million investors
Vanguard Group Inc., a prominent investment firm managing approximately $11 trillion in assets and world second largest ETFs provider, is evaluating the possibility of permitting its clients to trade cryptocurrency-focused exchange-traded funds (ETFs) on its platform, according to Bloomberg. This consideration marks a notable shift from Vanguard's previous cautious approach towards digital assets.
Currently, Vanguard does not offer its own crypto ETFs and restricts its clients from trading such products from other providers. If the firm decides to allow crypto ETF trading, it would provide its extensive client base—comprising over 50 million investors—with easier access to digital asset markets. This move could significantly enhance the accessibility of cryptocurrency investments for a broad range of retail investors.
The potential policy change comes amid a broader trend of increasing institutional acceptance of cryptocurrencies. Notably, the U.S. Securities and Exchange Commission (SEC) recently approved the launch of spot Bitcoin ETFs, reflecting a more favorable regulatory environment for digital asset products. This regulatory shift has prompted other major financial institutions, such as BlackRock, to introduce their own crypto ETF offerings.
Vanguard's consideration of allowing crypto ETF trading underscores the growing mainstream integration of digital assets into traditional investment platforms. While the firm has not yet finalized its decision, the potential policy change could have significant implications for the digital asset investment landscape.
Beyond the Brief
BPI Report on Why Nations Are Turning to Bitcoin: The Rise of Neutral Reserve Assets
The Nation State Adoption report from the Bitcoin Policy Institute, authored by Jake Langenkamp and Renee Sorchik, lays out how governments are moving fast to integrate Bitcoin into their financial strategies. What was once fringe is now becoming macroeconomic reality.
In an era of increased geopolitical uncertainty, the possession of a neutral reserve asset with a global, liquid market is highly valuable.
📊 Adoption Snapshot
27 countries already have exposure to Bitcoin (≈ 1 in 7 globally).
13 more are drafting laws or policies — mostly to establish Strategic Bitcoin Reserves (SBRs).
Moves are happening in North America, Europe, Asia, and the Middle East, sparking a game-theoretic race among sovereigns.
🚀 Beyond Legal Tender
El Salvador and the Central African Republic may have grabbed headlines with legal tender laws, but the report shows other paths are proving more durable:
Strategic Bitcoin Reserves (SBR)
Bitoin mining
Sovereign custody
Institutional purchasing (e.g. pensions, sovereign wealth funds)
Tax collection in BTC
🏦 Strategic Bitcoin Reserves (SBRs)
Already active in:
U.S.
El Salvador
Switzerland (via MicroStrategy exposure)
Saudi Arabia (via MicroStrategy exposure)
Legislation is in motion in Argentina, Brazil, Russia, Pakistan, Ukraine, Czech Republic, Hong Kong, and parts of Canada, Bhutan, and Switzerland.
⛏️ Government-Backed Bitcoin Mining
Government-backed mining is one of the most common sovereign strategies for bitcoin exposure. In total, 14 countries have considered or implemented mining programs, with 11 actively mining through state-linked entities — making it the leading active method of exposure.
Mining often runs alongside other approaches such as holding seized bitcoin, accepting tax payments in BTC, or indirect allocations via pension and sovereign funds into MicroStrategy. Together, these overlaps show mining is not only a revenue tool but also a core element of national bitcoin strategy.
💼 Public Fund Exposure
Pensions: U.S. (Michigan, Houston Firefighters, others), South Korea, Japan (studying).
Sovereign Wealth Funds: Bhutan, UAE, and Norway (via MicroStrategy).
🏙️ Tax Payments in Bitcoin
Accepted today in:
Colorado & Detroit (U.S.)
Panama City
Dubai
Four Swiss cantons
📌 Vancouver is next in line.
📦 Passive Holdings
Passive holdings arise mainly from law enforcement seizures of illicit funds. Rather than liquidating, these governments have retained the bitcoin, effectively accumulating reserves without a proactive acquisition strategy. It is likely that other countries also hold seized BTC without public disclosure.
Several unique cases also exist, from Russia’s state-backed crypto exchange pilot to Honduras’ use of BTC in a special economic zone.
🌟 Why It Matters
A New Reserve Asset. Treasuries are losing appeal, gold is surging, and Bitcoin offers neutrality, liquidity, and portability unmatched by either.
Fear of Missing Out. Momentum is accelerating, not reversing. Adoption may spread simply because no state wants to be left behind.
Bitcoin Ecosystems. From 2021–2024, Bitcoin-native startups raised $1.2B. First-mover nations with friendly policies will attract developers, capital, and jobs.
Bitcoin-Backed Bonds. Proposed “Bit-Bonds” could cut borrowing costs for governments while helping them accumulate Bitcoin reserves — potentially reshaping sovereign debt markets.
⚡ Takeaway
Bitcoin is no longer just an investment thesis — it’s becoming a strategic asset for nations. Whether through reserves, pensions, bonds, or tax policy, governments are finding multiple on-ramps. The race is on.
WHAT WE ARE READING (OR WATCHING)
The Stablecoin Standard
Circle Reports $2.4 Trillion Stablecoin Boom in Asia-Pacific: Singapore and Hong Kong Take the Lead
Governance Watch
SEC Is Moving to Allow Stocks to Trade Like Cryptocurrencies
NY Senator Introduces Bill to Tax High-Consumption Crypto Miners in New York
The Onboarding Wave
Witkoff’s Son Wants to Turn Trump Real Estate Into Crypto Tokens
On the Launchpad
Samsung expands Coinbase integration with direct crypto purchases in Galaxy Wallet
Beyond the Chain
Robinhood CEO Says Tokenization ‘Freight Train’ Will ‘Eat’ Finance
BlackRock’s crypto chief just jumped ship for Ethereum’s second-biggest treasury company
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.
