US and European Financial Services Firms Announce Digital Asset Integrations
By Jonathan Cardenas
On Sept. 29, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) announced at its annual flagship conference in Frankfurt, Germany, that it intends to add a blockchain-based ledger to its technology infrastructure stack. According to a press release, SWIFT and a group of more than 30 financial institutions worldwide will collaborate to develop a shared digital ledger, which will focus initially on real-time 24/7 cross-border payments. SWIFT also announced that it will introduce client solutions to enable interoperability between existing fiat currency rails and distributed ledger technology for various use cases. Both developments form part of SWIFT’s strategy to provide a “best-in class payments experience however value moves.”
In other news, a leading European capital markets infrastructure provider (Provider) and the issuer of the USDC and EURC stablecoins announced that they have signed a memorandum of understanding to collaborate on the use of EURC and USDC within the Provider’s financial market infrastructure. According to a press release, the collaboration is designed to connect traditional financial market infrastructure with token-based payment networks and will help to advance the adoption of regulated stablecoins across European markets.
In a final development, a leading U.S.-based payments and fintech company recently announced the launch of more than 40 new artificial intelligence (AI)- and stablecoin-related products at its annual product showcase in New York City. Among other products, the company announced the launch of its Open Issuance platform, which is designed to enable businesses to launch and manage their own stablecoins “with just a few lines of code.” The company also released its Agentic Commerce Protocol, which powers the new “Instant Checkout” feature in ChatGPT, as well as updates to its existing product line that enable U.S. businesses to hold stablecoin balances, convert between fiat currencies and send stablecoins to cross-border crypto wallets.
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New Reports Highlight Stablecoin Growth and Future Market Projections
By Amos Kim
A recent report on stablecoins from a cryptocurrency exchange highlights significant growth in the sector. Among other findings, the report notes that in Q3 2025: (1) stablecoin supply jumped nearly $45 billion, showing the largest quarterly expansion in history; (2) 84 percent of new stablecoin supply came from USDT, USDC and USDe; (3) stablecoin trading volume hit $10.3 trillion; (4) USDT flipped USDC in DEX trading, crossing $100 billion in monthly volume for the first time; (5) on-chain stablecoin transfers reached a record $15.6 trillion, with bots accounting for 70 percent of activity; and (6) retail stablecoin transfers under $250 hit an all-time high in September, putting 2025 on track for more than $60 billion in volume.
In a separate report on stablecoins, a multinational investment bank provides projections on the future of stablecoins and other forms of tokenized money. The report provides a 2030 forecast for stablecoin issuance with a worst-case scenario of $1.9 trillion and a best-case scenario of $4.0 trillion, citing rapid market growth and new project announcements. Other notable takeaways from the report include:
- Coexistence of Digital Money: An ecosystem is foreseen where stablecoins, tokenized deposits and CBDCs can all flourish, with different forms of money finding different product-market fits.
- Preference for Bank Tokens: Bank tokens, which offer the trust and regulatory safeguards of bank money, are expected to be preferred by many corporates.
- Transaction Volume Projections: Transaction volumes for bank tokens could exceed those for stablecoins by 2030.
- Corporate Treasury Interest: Large corporate treasuries are interested in the programmability offered by both bank tokens and stablecoins for real-time settlement and embedded compliance.
- Dominance of U.S. Dollar: On-chain money volumes are likely to remain heavily denominated in U.S. dollars.
- New Demand for Treasuries: Growth in USD-denominated stablecoins is a source of incremental new demand for U.S. treasuries.
- Global Innovation Hubs: While the market is USD-centric, innovative hubs for stablecoin activity are also active in Hong Kong and the UAE.
- Scale in Perspective: While projected transaction volumes for on-chain money may seem large, they remain small relative to the $5 trillion-$10 trillion moved daily by leading banks.
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SEC No-Action Letter Allows Certain DePIN Token Transfers Without Registration
By Robert A. Musiala Jr.
On Sept. 29, the U.S. Securities and Exchange Commission (SEC) Division of Investment Management (Division) published a statement responding to a request for No-Action relief (No-Action Letter) addressing certain “Programmatic Transfers” of certain “2Z tokens” in a decentralized public infrastructure network (DePIN). The No-Action Letter was filed on behalf of the DoubleZero Foundation (Foundation), “a memberless Cayman Islands foundation company … formed to support the development, decentralization, security and adoption of the DoubleZero Network … a new purpose-built internet optimized for distributed systems, like blockchains.”
The No-Action Letter requested assurance that the Division would not recommend enforcement action against the Foundation and other participants in the DoubleZero Network if Programmatic Transfers of the 2Z token are conducted without registration under Section 5 of the Securities Act, and where the 2Z token is not registered as a class of equity securities under Section 12(g) of the Exchange Act. The No-Action Letter provides a detailed technical description of the DoubleZero Network, the role of the 2Z tokens in operating the network, the role of key network participants (referred to as the “Network Providers” and “Resource Providers”), and a detailed legal analysis supporting its position that the Programmatic Transfers of the 2Z token are not transactions in “investment contracts” under the Howey test.
According to the No-Action letter:
The Programmatic Transfers would not satisfy the fourth prong of the Howey test because neither the Network Providers nor the Resource Providers have a reasonable expectation of profits derived from the entrepreneurial or managerial efforts of a promoter or sponsor. Instead, the Network Providers and Resource Providers themselves provide the essential efforts for their own success. Neither the Foundation nor any other third party controls the activities that generate returns here—the Network Providers and Resource Providers do that themselves.
The SEC granted the No-Action Letter’s request. In response to the No-Action Letter, the Division’s statement said, “Based on the facts presented, the Division will not recommend enforcement action to the Commission if … Programmatic Transfers that are conducted in the manner and under the circumstances described in your letter are not registered under Section 5 of the Securities Act and 2Z is not registered as a class of equity securities under Section 12(g) of the Exchange Act.”
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SEC No-Action Letter Allows State Trust Companies to Custody Crypto Assets
By Robert A. Musiala Jr.
On Sept. 30, the U.S. Securities and Exchange Commission (SEC) Division of Investment Management (Division) published a statement (Statement) responding to a request for No-Action relief (No-Action Letter) addressing state trust companies that provide crypto asset custody services. The No-Action Letter was filed on behalf of certain registered investment advisers (Registered Advisers) and investment companies (Regulated Funds) and requested assurance that the Division would not recommend enforcement action against the Registered Advisers or Regulated Funds for treating a “State Trust Company” as a “bank” permitted to custody assets as defined in the Investment Advisers Act of 1940 and the Investment Company Act of 1940, with respect to the placement and maintenance of crypto assets.
According to the No-Action Letter, the term “State Trust Company” refers to a legal entity organized under state law that is: (i) supervised and examined by a state bank supervisory authority and (ii) permitted to exercise fiduciary powers under state law. The No-Action Letter states that State Trust Companies are critical providers of crypto asset custody services, demand for crypto asset investment has grown considerably over the last decade, and State Trust Companies that provide crypto asset custody have implemented sophisticated controls to ensure safekeeping of crypto assets. According to the No-Action Letter, these controls typically include (i) so-called “deep” cold storage; (ii) third-party annual audits of financial statements; (iii) third-party reports regarding financial, governance, and information technology processes and controls, including system and organization controls reports (e.g., SOC-1 and/or SOC-2 reports); (iv) cybersecurity, physical security, and business continuity policies and procedures; (v) complex encryption protocols and crypto assets movement verification controls; and (vi) policies and procedures concerning private key generation and storage. The No-Action Letter represents that these controls have been developed within state regulatory frameworks that include certain specified criteria.
According to the Statement, based on the facts and representations in the No-Action Letter, the Division would not recommend enforcement action for treating a State Trust Company as a “bank” with respect to placement and maintenance of crypto assets, provided that: (1) there is reasonable basis to believe the State Trust Company is authorized by the relevant state banking authority to provide crypto asset custody services and the State Trust Company maintains and implements written internal policies and procedures reasonably designed to safeguard crypto assets; (2) the Registered Adviser or Regulated Fund enters into a custodial services agreement with the State Trust Company, which generally prohibits rehypothecation and mandates segregation of the crypto assets; (3) the Registered Adviser or Regulated Fund discloses material risks to their stakeholders; and (4) the Registered Adviser or Regulated Fund determines that the use of the State Trust Company’s custody services is in the best interest of the Registered Adviser client or Regulated Fund and its shareholders, as applicable.
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Canada Fines Major Crypto Exchange; Report Analyzes Crypto Crime Typologies
By Robert A. Musiala Jr.
According to recent reports, the Financial Transactions and Reports Analysis Centre of Canada has imposed a $14 million fine on KuCoin, a major global cryptocurrency exchange, for failing to register as a foreign money services business and for related transaction reporting failures. The exchange reportedly is pursuing an appeal of the fine in the Federal Court of Canada and has asserted that it should not be classified as a foreign money services business under Canadian law.
In other news, Elliptic, a blockchain analytics company, recently published the latest edition of the Elliptic Typologies Report. The report is a “deep-dive look into the five areas of financial crime risk that best illustrate the evolving nature of illicit cryptoasset activity and provide lessons for broader efforts to disrupt cryptorelated crime.” The five areas addressed in the report are (1) the use of artificial intelligence (AI) in cryptoasset scams and fraud; (2) the industrial-scale professionalization of the pig butchering ecosystem; (3) the proliferation of stablecoin activity among sanctioned actors; (4) the increasing integration of cryptoassets into the money laundering schemes of drug cartels; and (5) the growing complexity of crosschain money laundering. The report describes the techniques that illicit actors use to perpetrate these crimes and offers examples of practical measures that compliance professionals, law enforcement investigators and regulators can implement to detect and disrupt them.
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