Volo Protocol, a decentralized finance protocol built on the Sui blockchain, has suffered a security breach that led to the loss of approximately $3.5 million in digital assets.

 

In an effort to maintain transparency, the team in an X post on Wednesday publicly announced the security breach. According to the team, the attack only affected assets in selected vaults, including Wrapped Bitcoin (WBTC), Matrixdock Gold XAUm, and USDC (USDC).

 

 

On detecting the breach, the team said it acted quickly to contain it and minimize further damage. It stated, “We detected the attack, immediately notified the Sui Foundation and ecosystem partners to contain the damage, and froze the vaults to prevent any further exposure.”

 

As of the time of its first reporting on the incident, the Volo team said that the $28 million in total value locked across other vaults was safe, adding that all vaults on the protocol were temporarily frozen pending a full postmortem and remediation. The team also said it was in damage control mode and was actively working with on chain investigators and ecosystem partners to recover the stolen funds.

 

The team released updates on the hack

Since the hack happened, the Volo team has, in three separate updates, transparently informed the community about the efforts being made to recover the stolen funds.

 

In the first two updates, the team said it was already working with ecosystem partners and had successfully frozen approximately $500 million of the stolen funds, while also intercepting and blocking the hacker’s attempt to bridge 19.6 WBTC. According to the Volo team, these funds were no longer under the hacker’s control.

 

In a third update, the team said it had already frozen $2 million of the stolen funds, and that together with ecosystem partners and security teams, it had flagged the hacker’s EVM addresses across the majority of centralized exchanges, swappers, and KYC tools.

 

The Volo protocol hack came shortly after the KelpDAO exploit and the Drift Protocol exploit, which led to a combined loss of over $570 million, and are currently the largest DeFi hacks that have occurred this year. So far, over $770 million has been lost to DeFi hacks this year.

 

 

Singapore-based fintech company Nium has partnered with cryptocurrency exchange Coinbase to integrate the USDC stablecoin into its global payment network.

 

The integration, announced this week, leverages Coinbase’s custody, liquidity, and wallet infrastructure, allowing Nium’s clients and users to perform cross-border payments in USDC and settle transactions in either stablecoins or local currencies.

 

 

As Coinbase will provide the wallet infrastructure, Nium clients will be able to fund accounts in USDC within a Coinbase wallet embedded in the Nium platform. The USDC can then be converted to fiat currency by Coinbase and paid out through Nium, all within a single workflow on the platform.

 

Through this partnership, Nium will enable end-to-end stablecoin-to-fiat payment flows that allow users to send, receive, and convert stablecoins into fiat across more than 190 countries within a single platform.

 

Speaking about the partnership, Prajit Nanu, CEO of Nium, said it is aimed at providing clients with a more efficient way to move and manage money globally. He added that the collaboration improves capital efficiency while supporting a future in which stablecoins play a central role in Nium’s payment stack.

 

About Nium 

Based in Singapore, Nium is a cross-border payments company that allows users, including retail and institutional clients, to perform cross-border remittances and transactions.

 

Apart from being a core traditional finance company, Nium has in the past made several pro-crypto moves, especially in the stablecoin space.

 

In March of this year, it launched a stablecoin card issuance platform that allows companies holding stablecoins to issue spending cards on both the Visa and Mastercard networks through a single API integration on its platform. To enable USDC settlements on its platform, Nium last year participated in Visa’s stablecoin settlement pilot, which eventually made it possible for the company to settle cross-border transactions using stablecoins across different supported blockchain networks.

 

Like Nium, several other Singapore-based traditional finance companies have taken pro-crypto steps in recent times, integrating blockchain technology and crypto support into their platforms. Notable among them is DBS Bank, Singapore’s largest bank, which launched the DBS Digital Exchange, a platform for asset tokenization, crypto trading, and custody.

 

Cryptocurrency exchanges, including Kraken, OKX, Binance, and Bybit, have also partnered with traditional finance institutions to help bridge the gap between traditional finance and decentralized finance.

 

 

Cryptocurrency exchange Coinbase has rolled out crypto-backed loans for users in the United Kingdom, allowing users to borrow USDC against Bitcoin (BTC), Ether (ETH), and Coinbase Wrapped Staked Ether (cbETH) holdings.

 

The launch, announced this Monday, is part of Coinbase’s overall efforts to build a leading financial app in the UK that allows users to invest, manage, and grow their money.

 

 

The loans will be issued through Morpho, a decentralized finance lending protocol on Base, and according to Coinbase, users will be able to borrow up to $5 million in USDC, depending on the amount of Bitcoin and other eligible assets they hold as collateral. Coinbase says the interest rates will vary, depending on market conditions on Base, and that these rates will be set by Morpho.

 

It is also important to note that while there is no fixed repayment schedule for the borrowed loans, borrowers face liquidation risk if the loan-to-value ratio exceeds specific thresholds that will be set by Coinbase.

 

The crypto-backed loans can be accessed through the Coinbase app, where users can choose the amount of USDC they want to borrow and their preferred collateral asset. Once this is done, the pledged collateral will be transferred on-chain to a Morpho smart contract, and the USDC loans will be automatically disbursed to the user’s Coinbase account, which can then be converted to British pounds (GBP).

 

Coinbase Expands Its Crypto Efforts

Coinbase is one of the cryptocurrency exchanges leading development at the intersection of blockchain technology and artificial intelligence (AI).

 

In an X post last weekend, Coinbase CEO Brian Armstrong announced that the exchange was testing and integrating two AI agents into Slack and email. These AI agents will serve as virtual workers, able to perform on-chain actions such as holding funds, spending and sending money, trading, and earning yield.

 

This recent development comes shortly after Coinbase launched the x402 Foundation, designed to enhance the use of its x402 protocol as a standard payment protocol for internet native payments.

 

To achieve its “Everything Exchange” goal, Coinbase made a number of significant acquisitions last year, including the acquisition of the Deribit exchange and Echo. The exchange has also rolled out stock and ETF trading in-app for all eligible users, with its most recent rollout in Canada.

 

 

Tether has never been shy about playing offense. And in the wake of one of the worst hacks to hit Solana's DeFi ecosystem, the world's largest stablecoin issuer saw an opening, and took it.

 

On April 16, Tether announced a recovery package worth up to $127.5 million for Drift Protocol, the Solana-based perpetual futures exchange that was drained of roughly $285 million on April 1 in a sophisticated hack attributed to North Korean operatives. Combined with $20 million pledged by other partners, the total rescue fund comes to nearly $150 million. But the dollar figure is almost secondary to what Tether actually got in return.

 

The Real Prize: Kicking USDC Off Solana's Biggest Perp DEX

As part of the deal, Drift will swap out Circle's USDC for Tether's USDT as its core settlement asset. That means 128,000 users and more than 35 ecosystem teams, including Gauntlet, Neutral, and M1, all migrate to a USDT-based trading environment. On a network where USDC has historically dominated, this is huge play.

 

On Solana, Circle's USDC carries a market cap of around $8.1 billion, compared to Tether's $3.05 billion. That's a more than 2.6-to-1 advantage for Circle on the chain. In global terms, the picture is reversed: USDT's circulating supply tops $185 billion versus roughly $79 billion for USDC. Tether has always dominated the overall stablecoin market; it just hasn't had much luck on Solana. Until now, maybe.

 

Paolo Ardoino, Tether's CEO, framed the intervention in fairly lofty terms. "Tether's role in the digital assets ecosystem is to provide a platform for individuals and institutions alike that is ready to step forward to help the industry in the moment of darkness," he said in a statement.

 

That said, analysts aren't exactly reading this as pure altruism. As one observer put it, the Drift exploit was, for Tether, an "operational window" to buy market share at a moment of maximum vulnerability. The funding structure itself reinforces this reading: repayments to affected users are tied to future trading activity on the relaunched platform, meaning Tether's money goes further the more Drift succeeds as a USDT venue.

 

Circle Gets the Blame, Tether Gets the Spoils

Tether saw the opening and definitely took it. Circle finds itself under intense scrutiny in the days following the Drift hack, after attackers transferred more than $230 million in USDC from Solana to Ethereum using Circle's own cross-chain transfer protocol. Critics, including on-chain investigator ZachXBT, pointed out that Circle had a window of at least six hours to blacklist the relevant wallets and freeze the funds, and did nothing.

 

Circle CEO Jeremy Allaire later defended the company's position, saying that USDC wallets are only frozen when directed by law enforcement or courts, not unilaterally during active hacks. The argument tracks with Circle's broader regulatory strategy, which prioritizes institutional alignment and compliance above all else. Whether that's the right call is debatable. What's less debatable is that a class action lawsuit has reportedly been filed against Circle in the aftermath, alleging the firm knowingly allowed attackers linked to North Korea to offload stolen funds through its own infrastructure.

 

Tether, by contrast, has a long history of freezing funds tied to hacks and illicit activity quickly, often without waiting for court orders. That operational difference has real consequences for platforms that care about protecting users when things go wrong.

 

How Drift Gets Back on Its Feet

The April 1 attack was a serious one. Blockchain analytics firm Chainalysis estimates losses at approximately $285 million. According to Drift's own postmortem, the attackers used a combination of social engineering and a technical method known as "durable-nonce pre-signing" to obtain privileged administrative access, a scheme that reportedly began at least six months before the exploit was executed. From there, the attackers deposited worthless CVT tokens as fake collateral, then withdrew real USDC, SOL, and ETH.

 

Drift's TVL, which was above $550 million before the attack, has since fallen to around $242 million. The protocol's recovery framework targets $295.7 million in outstanding user losses, a figure that actually exceeds its current TVL. To bridge that gap, the plan leans on future trading fee revenue flowing into a dedicated recovery pool. Users will also receive a separate recovery token representing their claim on that pool, transferable and distinct from the DRIFT governance token.

 

The market responded well to the announcement: DRIFT token surged roughly 22%, climbing from $0.045 to $0.055 on the day, after having fallen as much as 30% in the immediate aftermath of the exploit.

 

A Stablecoin War Fought One Bailout at a Time

The Drift deal lands at a time when competition in the stablecoin market is genuinely heating up. USDC has made real headway in institutional and DeFi use cases over the past couple of years, partly by positioning itself as the "clean" option for regulated environments. Circle's IPO plans have only reinforced that narrative.

 

Tether still holds a commanding global lead, but the gap in on-chain activity has been narrowing. Coindesk data shows USDC transaction volumes outpaced USDT's in recent months, and Circle's market share has been expanding. This makes Solana, where USDC has been strongest, a particularly important front in what is increasingly looking like a full-scale stablecoin war.

 

Whether the Drift bailout actually converts into lasting USDT dominance on Solana remains to be seen. Relaunch is contingent on Drift completing two independent security audits, and rebuilding trust with users after a $285 million heist takes more than a well-funded recovery plan. But Tether, at least for now, holds a key piece of Solana's DeFi architecture. And it didn't exactly have to do much begging to get it.

 

 

Circle is pushing even further into the global payments infrastructure. On April 8, the company officially launched CPN Managed Payments, a fully managed stablecoin settlement product built on top of its Circle Payments Network that lets banks, fintechs, and payment processors tap into USDC rails without ever touching digital assets themselves. Yes, you heard that correctly, they never even have to touch USDC.

 

The solution handles everything on the backend, including USDC minting and burning, payment orchestration, compliance controls, and blockchain infrastructure, so that partner institutions can operate entirely in fiat. In other words, a payment provider signs up, connects once, and Circle does the rest.

 

That is a huge shift in how stablecoin adoption typically works. Until now, most institutions eyeing blockchain-based settlement had to deal with the full stack: custody arrangements, internal compliance buildout, licensing questions, and the operational headaches that come with managing digital assets on a balance sheet. CPN Managed Payments is designed to help institutions overcome those barriers, including digital asset custody, licensing requirements, compliance complexity, and operational risk.

 

"With CPN Managed Payments, we're simplifying how institutions adopt and scale stablecoin payments," said Nikhil Chandhok, Circle's Chief Product and Technology Officer. "By combining issuance, liquidity, compliance, and programmable infrastructure into a unified solution, we are enabling financial institutions to embed stablecoin settlement into their existing payment stacks with enterprise-grade reliability and operational readiness."

 

The launch is an extension of CPN, which Circle first announced in April 2025 and brought live the following month. CPN was designed to connect banks, neo-banks, payment service providers, virtual asset service providers, and digital wallets to enable real-time settlement of cross-border payments using regulated stablecoins. Cross-border payments can still take longer than one business day to settle and cost more than 6%, according to the World Bank, disproportionately impacting emerging markets.

 

The underlying mechanics are worth understanding. On the sending side, an originating financial institution handles customer onboarding, KYC, and fiat-to-USDC conversion. On the receiving side, a beneficiary institution receives USDC and converts it to local currency for payout. Circle sits in the middle as network operator but is not holding or moving the funds itself, acting instead as a coordination layer between member institutions. With the managed payments product, Circle now absorbs even more of that operational complexity on behalf of its partners.

 

USDC's market cap currently sits at around $74.8 billion, and Circle reported Q4 2025 revenue of $770 million, 77% better than the same period the prior year. The company has been aggressively expanding its licensing footprint globally and is now leaning into that compliance infrastructure as a competitive moat rather than just a cost center. Circle said that USDC has supported over $70 trillion in "cumulative onchain settlement," with nearly $12 trillion of that amount coming in Q4 2025 alone.

 

CPN Managed Payments is built on Circle's existing infrastructure, which covers payouts across more than 20 blockchains and domestic payment rails, with connectivity to CPN fiat payout corridors worldwide. The platform is also composable, meaning institutions can start fully managed and gradually take on more of the stack themselves as their internal capabilities develop.

 

Launch partners include Veem, along with other global payment service providers. Earlier CPN adopters included Alfred Pay, which is using the network to enable stablecoin-to-fiat offramps via PIX and SPEI; Tazapay, supporting compliant fiat disbursements into Hong Kong; and RedotPay, initiating USDC-based payments into Brazil.

 

The competitive picture is getting crowded. PayPal has had its own stablecoin product on the market for over a year, and Ripple's RLUSD has been gaining ground in cross-border settlement use cases, particularly in corridors where USDC's footprint has been slower to develop. But Circle's bet with CPN Managed Payments is distinct: rather than compete stablecoin-to-stablecoin, it is trying to become the rails that other institutions use, regardless of which digital dollar eventually wins.

 

Circle is currently focusing on serving organizations transacting in high-value, underserved global trade corridors, with plans to explore expansion into Nigeria, the EU, UK, Colombia, India, the UAE, China, Turkey, the Philippines, Vietnam, and Argentina.

 

For traditional finance players who have wanted stablecoin efficiency without the crypto balance sheet exposure, the product is about as clean an entry point as the market has offered. 

 

The internet has always had a payments problem. HTTP moved data. SMTP moved email. But money? Money got stuck behind proprietary rails, bank integrations, and checkout forms that were never really built for a digital-first world. That gap, which the industry has spent decades papering over with varying degrees of success, is now the target of something bigger than any one company: the x402 Foundation, launched today under the Linux Foundation, with Coinbase, Cloudflare, and Stripe among its founding backers.

 

The announcement, timed to April 2 (a nod to HTTP status code 402, "Payment Required"), marks a formal step toward turning x402 into a neutral, community-governed standard. And the list of companies signing on makes it hard to dismiss as just another crypto lab experiment. Adyen, Amazon Web Services, American Express, Ant International, Google, Mastercard, Microsoft, Shopify, the Solana Foundation, Visa, and more than a dozen other names from across fintech, big tech, and crypto all attached their names to the effort.

 

What x402 Actually Does

The protocol is simple. When a client tries to access a resource gated behind x402, the server responds with the 402 Payment Required status code along with machine-readable payment instructions: amount, asset, network, recipient. The client then attaches a payment authorization header and resends the request. A facilitator verifies the payment and settles the transaction. That is the whole flow. No accounts, no subscriptions, no API keys, no manual billing cycles.

 

Coinbase launched the first version in May 2025, quietly, with the 402 HTTP status code having sat largely dormant since it was first defined in the early 1990s. Within months the protocol had processed over 100 million payments across APIs, apps, and AI agents. By December, the team shipped x402 V2, which added multi-chain support by default, cleaner separation between clients, servers, and facilitators, and the architectural foundations for session management and identity. The reference SDKs are available across TypeScript, Go, and Python.

 

Transaction costs sit near zero, with Coinbase's facilitator offering the first 1,000 transactions per month free and charging $0.001 per transaction beyond that. For micropayments, the kind worth a fraction of a cent that credit card networks have never handled well, that matters enormously. The protocol currently runs on Base, Polygon, and Solana, with stablecoins like USDC as the primary settlement layer. Future versions are designed to accommodate traditional rails as well, including ACH, SEPA, and card networks, using the same payment model.

 

Why This Moment, Why This Structure

The timing is not accidental. The push into autonomous AI agents across the industry has exposed a glaring problem: agents need to pay for things. When an AI assistant browses the web to buy something, or a trading bot needs a real-time data feed, or a robot needs to procure compute on the fly, making a human stop and authorize each payment defeats the entire point. What the industry needs is a payment primitive that works the way HTTP works: in the background, at machine speed, without friction.

 

"The internet was built on open protocols," said Jim Zemlin, CEO of the Linux Foundation, in comments tied to the launch. The Foundation's involvement is a deliberate move to ensure no single company ends up owning the payment layer of the agentic web. Cloudflare CEO Matthew Prince echoed that logic in September when the two companies announced their intent to launch the Foundation together: the internet's core protocols have always been governed independently, and x402 should be no different.

 

That governance structure is a meaningful part of the pitch. The x402 Foundation is framed explicitly as stewardship, not ownership. No single company controls the standard. The membership body is open to developers, startups, and enterprises. Cloudflare's alignment with the effort also signals that x402 is being treated as infrastructure at the edge level, not just a crypto developer toy. Integrating x402 into Cloudflare's edge compute and CDN stack means payment requests can slot into everyday web workflows the same way SSL became table stakes for basic security.

 

The Bigger Picture

Early use cases already live in production. Hyperbolic, an AI compute marketplace, uses x402 for AI agents paying per GPU inference session rather than committing to a monthly subscription. OpenMind has robots autonomously procuring compute and data. Cal.com embeds x402 for paid human interactions directly inside scheduling workflows. The scope of what a frictionless pay-per-use primitive unlocks is genuinely wide, and that is before the protocol adds broader identity support and more payment backends.

 

There are real risks worth naming. The protocol currently leans heavily on Coinbase's own facilitator infrastructure, which handles verification and settlement and is, today, the most mature option in the ecosystem. Cloudflare and others reduce protocol-level concentration, but early traffic still routes largely through Coinbase's stack. The facilitator is free now. That may not last indefinitely once network effects solidify. And unlike credit card networks, x402 has no network-level payment reversal. Refunds require a compensating transfer from the merchant, making the protocol closer to cash than to a reversible card transaction. For high-frequency API calls that is a feature. For consumer flows that expect buyer protections, it is a liability worth monitoring.

 

What x402 has going for it, beyond the technical architecture, is the coalition. Visa and Mastercard alongside the Solana Foundation and Polygon Labs in the same founding member list is unusual. Google Cloud's managing director for Web3 and Digital Assets called the shift toward agentic commerce a fundamental reason Google is joining, describing the need for cloud infrastructure that is as open as the protocols it supports. Whether that breadth translates into real interoperability or remains aspirational will be one of the defining stories to watch as the Foundation gets off the ground. If x402 does become foundational plumbing, the question will be who benefits most from having been at the table when the standard was written.

 

Onchain sleuth ZachXBT has accused stablecoin issuer Circle of improperly freezing 16 hot crypto wallets. The freeze is reportedly linked to an ongoing civil case in the United States, but ZachXBT said the company failed to conduct adequate due diligence before taking action.

 

 

“An analyst with basic tools could have identified, within minutes, that these were operational business wallets from the thousands of transactions they process,” he said.

 

According to ZachXBT, the wallets were used for business purposes. “I reviewed the onchain activity, and the exchanges, casinos, and forex businesses do not appear to be related to one another,” he added.

 

The crypto investigator also criticized the judicial process that approved the freeze, calling it the “most incompetent” he has seen in more than five years of work in the field.

 

“The NY civil case is sealed and they have provided absolutely ZERO basis to freeze all of these business addresses. [...] The expert witness is liable. The judge is liable. Circle is liable,” Zach said. “This is what happens when you outsource your freezing decisions to literally any random federal judge instead of having a process,” he added.

 

Following the callout by the on-chain investigator, Circle reportedly unfroze one of 16 wallets. According to Zach, the wallet with the address "0x61f…e543," which holds 130,966 USDC and is linked to Goated, has been unfrozen. He expects more wallets to be unlocked soon.

 

The Crypto Community Reacted

The crypto community reacted with outrage, with many criticizing centralized stablecoins. “This is your 10th reminder that centrally issued stablecoins are not actually yours. They can be frozen, unlike cash,” said Mert Mumtaz, CEO of Helius Labs.

 

“I still find it hard to believe that token issuers can 'freeze' coins on EVM shitchains and call it a 'normal' feature. The CBDC is already here, and it's called USDC,” said Francis Pouliot, CEO of crypto platform Bull Bitcoin.

 

Circle’s History With Freezes

Like many centralized stablecoin issuers, Circle has a history of freezing crypto assets. In May 2025, it froze approximately $57 million in USDC linked to the memecoin project LIBRA, as well as 2,997,180 USDC held in an Ethereum address flagged for suspicious activity.

 

Most of these freezes were legally justified and are part of Circle's efforts to curb money laundering and other illicit activities on the blockchain. 

 

However, some critics have raised concerns about centralization, noting that centralized stablecoin issuers can freeze users' crypto assets at their discretion, a clear departure from the user control promised by blockchain technology.

 

 

Coinbase and mortgage lender Better Home & Finance have announced a new product that lets prospective buyers use Bitcoin or USDC as collateral on a Fannie Mae-backed mortgage, without ever having to liquidate their holdings. It is, by most measures, the clearest sign yet that digital assets are finding their way into the mainstream and will be used as the machinery of American homeownership.

 

How It Will Work

Borrowers transfer their digital assets from Coinbase into a custody wallet held by Better, retaining legal ownership of the crypto throughout the life of the loan. The collateral sits there as a pledge, not a payment. For holders of USDC, Circle's dollar-pegged stablecoin, the arrangement even lets them keep earning yield on their holdings while those same assets secure the mortgage.

 

The rate premium is real, though. Borrowers should expect to pay 0.5 to 1.5 percentage points above a standard 30-year fixed loan, depending on their overall profile. Whether that spread feels worth it depends largely on how much a borrower values not triggering a taxable event by selling appreciated crypto positions. For long-term Bitcoin holders sitting on significant gains, the math can work out in their favor.

 

One of the more notable design choices here is the absence of margin calls. In most crypto lending products, a sharp price drop can trigger forced liquidation of collateral. This product is built differently. If Bitcoin falls 40% in a month, the terms of the mortgage do not change and no additional collateral is required. Liquidation risk only enters the picture after a 60-day payment delinquency, putting the structure firmly in line with how conventional mortgages work rather than how crypto lending typically operates. This matters a great deal for borrowers who have been burned by or are skeptical of DeFi-style collateral arrangements.

 

How Did We Get Here?

In June 2025, Federal Housing Finance Agency Director Bill Pulte issued a directive ordering Fannie Mae and Freddie Mac to prepare proposals for counting cryptocurrency as an asset in mortgage risk assessments, without requiring borrowers to first convert those holdings into dollars. The directive was framed explicitly around President Trump's stated goal of making the U.S. the crypto capital of the world. Pulte's letter specified that only crypto held on U.S.-regulated centralized exchanges would qualify, and he called for risk mitigants including valuation adjustments to account for volatility.

 

Until now, Fannie and Freddie's guidelines required that any cryptocurrency a borrower wanted to use for a down payment, closing costs, or reserves had to be liquidated into U.S. dollars first. The Coinbase-Better announcement marks the first time that framework has been operationalized into an actual product backed by Fannie Mae. Whether lenders across the broader market follow suit remains to be seen, as industry experts have cautioned that adoption will be gradual. Individual lenders may impose their own overlays, and aggregators who purchase loans will need to get comfortable with the structure before it becomes truly mainstream.

 

Coinbase and Better are not alone in seeing opportunity here. Newrez, one of the largest mortgage servicers in the country with roughly $778 billion in assets under management, announced late last year that it was assessing Bitcoin and Ethereum for mortgage qualification purposes. Bob Johnson, head of originations at Newrez, described the FHFA directive as a meaningful signal from Washington that the capital markets infrastructure underpinning a significant share of U.S. mortgage origination is open for change.

 

Bitcoin ETFs have surpassed $100 billion in assets under management since receiving SEC approval in early 2024, and a growing cohort of American households hold meaningful digital asset positions. For those buyers, particularly younger, crypto-native professionals who have built wealth in digital rather than traditional asset classes, the old requirement to sell before buying a home was a genuine friction point. This product is a direct answer to that segment.

 

Questions Sill Remain

Not everyone is convinced the move is without risk to the broader housing system. A group of Democratic senators wrote to Director Pulte last July raising concerns about attaching a notoriously volatile asset class to one of the most systemically important markets in the U.S. economy. The letter questioned the transparency of the decision-making process and asked for details on how downside risks would be managed. Those concerns have not disappeared just because a product has launched.

 

Experts in the mortgage industry have echoed a degree of caution. Some analysts expect lenders to apply heavy discounts to crypto valuations for qualifying purposes, potentially treating holdings at 10% or less of market value, and to require that assets be seasoned on regulated exchanges for a defined period. The operational side of verifying, valuing, and monitoring digital assets in a mortgage context is still being developed, and few lenders have the infrastructure in place today to do it at scale.

 

Whatever the short-term practical limitations, the symbolic weight of Fannie Mae's involvement should not be understated. The government-sponsored enterprise, which has been under federal conservatorship since 2008 and underpins a substantial portion of American mortgage finance, is now part of a product that treats Bitcoin and USDC as legitimate collateral.

 

The irony here is hard to ignore. The 2008 financial collapse, driven largely by reckless mortgage-backed securities dealings, was the very event that inspired Satoshi Nakamoto to write the Bitcoin whitepaper. That invention, born as a rejection of and answer to the broken banking system, will now be used to back the same financial instrument that helped trigger the crisis. Life, as they say, comes full circle.

 

Resolv Labs’ stablecoin, USR, has lost its U.S. dollar peg following an exploit of the token’s contract that allowed attackers to mint millions of tokens.

 

The exploit, which occurred on March 22, 2026, resulted in the creation of 50 million unbacked USR tokens, prompting the team to temporarily pause the protocol’s functions to prevent “further malicious actions.”

 

 

According to YieldsandMore, which first reported the story, the attack began with a 100,000 USDC deposit by the attackers, ultimately causing USR to lose its dollar peg and fall to $0.01.

 

After minting the USR tokens, the attackers converted them into wrapped USR (wstUSR) to access deeper liquidity on decentralized exchanges (DEXs). This allowed them to offload large amounts of wstUSR more gradually, reducing the risk of an immediate price crash of USR.

 

The next phase of the attack involved dumping and selling wstUSR tokens across multiple platforms, including KyberSwap and Velora. Using this method, the attackers swapped wstUSR for USDt and USDC, which were then aggressively converted into Ether (ETH).

 

Although the attack was first made public by the crypto research and analysis group YieldsandMore, the Resolv team was only able to pause the protocol three hours later.

 

“It took ResolvLabs three hours to pause its protocol. Roughly one hour of that delay came from the gap between submitting the multisig transaction and collecting the four required signatures to execute it,” YieldsandMore wrote on X.

 

While 50 million tokens were initially minted by the attackers, blockchain security company PeckShield reported that an additional 30 million USR tokens were later minted, bringing the total to approximately 80 million.

 

 

Price Action of USR in the Aftermath of the Exploit

The minting and dumping of USR tokens triggered a severe depeg, sending its price from $1 to roughly $0.02 to $0.05 within minutes, a decline of about 95 to 97%.

 

Although it briefly rebounded to between $0.14 and $0.20, USR is currently trading at $0.2773, according to data from CoinMarketCap at the time of publication. 

 

The USR depeg ranks among the most severe in recent history, second only to the collapse of Terra's TerraUSD (UST) in 2022, which fell from $1 to $0.02 and lost 98% of its value. Iron Finance also had its IRON stablecoin lose its dollar peg, dropping from $1 to about $0.05.

 

 

The room at the Marriott Marquis in Washington was full of community bankers on Tuesday, and Senator Angela Alsobrooks walked straight into the lion's den. Speaking at the American Bankers Association's annual Washington Summit, the Maryland Democrat delivered a message neither side particularly wanted to hear: everyone involved in the Digital Asset Market Clarity Act is going to have to walk away a little bit unhappy.

 

It was a remarkably candid thing to say in front of 1,400 people who have spent the better part of three months trying to kill the very provision that's been holding up the bill. But Alsobrooks, along with Republican Senator Thom Tillis of North Carolina, is now the central figure in a late-stage push to get the Clarity Act off the Senate Banking Committee floor and into an actual markup hearing before the legislative window closes for good.

 

The two senators confirmed Tuesday they're actively working on compromise language around stablecoin yield which keeps coming up as the main issue that has stalled what was supposed to be a landmark piece of crypto regulation.

 

A Bill In Limbo

The Digital Asset Market Clarity Act, or CLARITY Act, was supposed to have its Senate Banking Committee markup in January. That session got pulled at the last minute. The reason was stablecoin yield, specifically, amendments co-sponsored by Alsobrooks and Tillis that would restrict crypto firms from offering interest-like returns to customers who simply hold dollar-pegged digital tokens like USDC or USDT.

 

Banks had been lobbying hard against any provision that allowed that kind of reward. Their argument, which they've pushed loudly and repeatedly, is that stablecoins offering yield would function like bank accounts without the regulatory obligations of bank accounts. Executives at JPMorgan and Bank of America have cited Treasury Department modeling that suggested banks could lose up to $6.6 trillion in deposits if stablecoin yield programs went mainstream. Their argument is that it would starve the lending market and ultimately destabilize smaller regional banks that are particularly dependent on deposit funding.

 

The crypto industry dismisses most of that as fearmongering. Coinbase CEO Brian Armstrong called out the banking lobby publicly for what he characterized as anticompetitive blocking tactics and has pulled his support for the bill. In January at Davos, JPMorgan's Jamie Dimon reportedly told Armstrong he was, in quite colorful terms, wrong. The anecdote leaked out and became something of a symbol for just how personal this fight had gotten.

 

 

The White House Steps In, Then Gets Rejected

By late February, the White House had grown impatient. Administration officials spent weeks brokering what they hoped would be an acceptable middle ground: allow stablecoin yield in limited contexts, particularly for activity tied to payments and transactions, while banning rewards on idle balances that look more like savings accounts. Crypto firms signed off on the framework. The banks did not.

 

On March 3rd, President Trump went public with his frustration. In a Truth Social post, he wrote that banks should not be trying to undercut the GENIUS Act or hold the CLARITY Act hostage, a shot across the bow that was notable both for its directness and for the fact that it did essentially nothing to move the American Bankers Association. Two days later, the ABA formally rejected the White House compromise anyway.

 

The March 1st deadline the White House had set for a resolution passed without published compromise text. Prediction markets, which had briefly priced Clarity Act passage at around 80% odds, fell back toward 55% as the stalemate hardened.

 

What the ABA rejection didn't do, however, is kill the legislation outright. Congress has passed bills over banking lobby opposition before. The question, as analysts and lobbyists have been pointing out all week, is whether there are enough Senate votes to do it again — and whether the calendar allows the time to find out.

 

Can We Get A Compromise?

The emerging deal that Alsobrooks and Tillis are proposing is a slimmed-down version of what the White House tried. Under the framework being discussed, yield on stablecoin holdings that closely resemble bank deposits would remain prohibited. But rewards tied to specific activities, like using stablecoins for payments or transactions on a given platform, could remain eligible for some form of customer incentive.

 

Both senators and many crypto advocates actually agree on the premise that pure holding rewards that look and function like savings account interest are a problem. The dispute is over where exactly to draw the line and how to define the categories well enough that neither side can game them after the fact.

 

Cody Carbone, the CEO of the Digital Chamber, said this week that Tillis has been very receptive to discussions about stablecoin yield and that he's optimistic the industry can get to yes on the bill. Summer Mersinger, the CEO of the Blockchain Association, noted that the White House weighing in on the negotiations and pushing banks to engage in good faith adds important momentum as talks continue.

 

The banks have maintained, publicly at least, that those assurances aren't enough. Their representatives at the ABA summit this week underlined again what they see as the risks of any yield loophole to their business model. The question of whether a markup hearing happens in late March or gets delayed again, depends entirely on whether Alsobrooks and Tillis can produce language the committee will actually vote on.

 

Timing Is An Issue

Behind every conversation about the Clarity Act this week is an unspoken anxiety about time. The Senate calendar is tight. Midterm elections are in November, and lawmakers will start dispersing from meaningful legislating sometime around May or June as campaign season accelerates. Unfortunately it seems, Congress prefers to stop working as they try to convince voters to keep them in their jobs. I know, makes perfect sense. If a markup isn't held and a floor vote isn't scheduled by sometime in April, realistically the bill is looking at the next Congress which could be a completely different party in power. And complicating things even more. Despite which party ends up winning the midterms, this could mean another 12 to 18 months of regulatory uncertainty for an industry that has been waiting years for a clear legal framework.

 

That timeline matters not just for the crypto industry's domestic ambitions, but for its competitive positioning globally. Under the European Union's MiCA framework, stablecoin yield products that are restricted or banned in the U.S. are already legal in European jurisdictions. Coinbase and others have been explicit about the risk that continued regulatory ambiguity in the U.S. will push capital, talent, and product development offshore. Trump made a version of the same argument in his Truth Social post last week, warning that failure would drive the industry to China.

 

There's also a strategic Bitcoin Reserve angle sitting quietly in the background. According to people familiar with the situation, the Trump administration has determined it needs congressional action to operationalize the planned Strategic Bitcoin Reserve that the president signed an executive order for over a year ago. That creates at least some White House motivation to see the broader Clarity Act process succeed.

 

What Happens Next

The Senate Banking Committee is targeting a late-March markup. Whether that happens depends on whether the Alsobrooks-Tillis compromise language satisfies enough members to call the vote. If it does, the bill would then need to be merged with a version that already passed the Senate Agriculture Committee on a party-line vote in late 2025. The combined text would require significant Democratic support to clear a full Senate vote, always a tall ask in the current politcal environment and the fact that seven Democratic senators have separately raised concerns about potential conflicts of interest involving senior government officials, including the president himself, who have financial ties to the crypto industry.

 

Even if the Senate acts, the bill still needs the House, where an earlier version of the CLARITY Act passed committee last year but has yet to reach the floor. The path to a signed law before November is narrow but not impossible. It requires the Senate Banking Committee to move in the next few weeks, the combined bill to hold together politically, and a Senate floor schedule that is packed with little wiggle room.

 

For the moment, all of it hinges on two senators and a room full of bankers in Washington D.C., trying to decide how much compromise is actually compromise and if they can all agree to leave a bit unhappy about the results for the greater good. Typically the best compromises do make both sides a bit unhappy. In Washington, that usually means the deal is closer than it looks. It also usually means it's harder than it sounds.

 

Kast, a stablecoin payments company, has raised $80 million in a Series A funding round co-led by QED Investors and Left Lane Capital, bringing its valuation to $600 million.

 

According to the team, the funding will be used to accelerate Kast’s global expansion across North America, Latin America, and the Middle East, as well as to expand the company’s workforce, licensing, and product development efforts.

 

 

What Kast is Building

Kast is a stablecoin-powered neobank founded in 2024 by Daniel Bertoli, an ex-partner at Quona Capital, and Raagulan Pathy, a former executive at Circle Internet Financial, the company behind the USD Coin (USDC) stablecoin.

 

To reduce the delays and high costs often associated with international remittances through traditional banking systems, Kast is building a blockchain-based platform that uses stablecoins as its settlement layer. 

 

According to the team, “Our end game is clear: to become the leading neobank for the stablecoin economy, serving both users and businesses.” 

 

To ensure that users and businesses of all sizes are catered to, Kast has built a platform that allows users to create digital dollar accounts. These accounts enable users to store dollars digitally, send money globally, and receive international payments. As a result, users do not need a U.S. bank account to hold dollars digitally. 

 

Since its launch in 2024, Kast has achieved a number of impressive milestones, including:

- Reaching over 1 million users on its platform.

- Processing about $5 billion in transaction volume to date.

- Enabling users to send money to more than 190 countries. 

 

This funding marks Kast’s second fundraising round, months after the company raised $10 million in December 2024 in a round led by HongShan Capital Group and Peak XV Partners.

 

 

The Surge of Stablecoins in Institutional Remittances

With a market cap of over $300 billion, stablecoins have seen a remarkable increase in institutional use for cross-border payments. 

 

According to a stablecoin report, enterprise cross-border stablecoin transaction volume grew threefold year over year in 2025, with 25% of corporates now using stablecoins for supply-chain payments, particularly for trade settlement, treasury transfers, and gig-economy payouts. 

 

This increased adoption is due to the very fast settlement times of stablecoins, usually less than 24 hours, a sharp contrast from traditional banking systems, which often take days.

 

Based on current adoption trends, stablecoins are projected to capture 10 to 15% of global cross-border payments by 2030, with their annual settlements reaching approximately $5 trillion by the end of this year.

 

 

 

Washington's stablecoin standoff just got a whole lot more personal.

 

Patrick Witt, the executive director of the President's Council of Advisors for Digital Assets, publicly fired back at JPMorgan Chase CEO Jamie Dimon on Tuesday, calling his arguments about stablecoin yields misleading and, in Witt's own word, a "deceit."

 

The exchange marks one of the sharpest moments yet in a months-long tug-of-war between Wall Street and the White House over the future of digital asset regulation in America.

 

Dimon Draws a Line in the Sand

It started Monday, when Dimon went on CNBC and didn't mince words. His position was simple, if uncompromising: any platform holding customer balances and paying interest on them is functionally a bank, and should be regulated like one.

 

"If you do that, the public will pay. It will get bad," Dimon warned, arguing that a two-tiered system where crypto firms operate with fewer restrictions than banks is unsustainable.

 

Dimon suggested a narrow compromise: platforms could offer rewards tied to transactions. But he drew a clear line at interest-like payments on idle balances, saying, "If you're going to be holding balances and paying interest, that's a bank."

 

The list of obligations Dimon believes should apply is long, FDIC insurance, capital and liquidity requirements, anti-money laundering controls, transparency standards, community lending mandates, and board governance requirements. "If they want to be a bank, so be it," he said.

 

For Dimon, it's fundamentally about fairness. JPMorgan uses blockchain in its own operations, and the CEO was careful to frame his argument not as anti-crypto but as pro-competition on equal terms. "We're in favor of competition. But it's got to be fair and balanced," he said.

 

 

The White House Fires Back

Witt wasn't going to let that stand. In a post on X late Tuesday, he went directly at Dimon's framing, calling it deliberately misleading.

 

"The deceit here is that it is not the paying of yield on a balance per se that necessitates bank-like regulations, but rather the lending out or rehypothecation of the dollars that make up the underlying balance," Witt wrote. "The GENIUS Act explicitly forbids stablecoin issuers from doing the latter."

 

The argument gets at something technically important. What makes a bank risky, and therefore subject to heavy regulation, isn't that it pays interest. It's that banks take deposits and lend them back out, creating credit and the systemic risk that comes with it. If too many people want their money back at once, that's a bank run. Stablecoin issuers operating under the GENIUS Act must maintain reserves at a 1:1 ratio. There is no fractional reserve lending, no rehypothecation, no credit creation.

 

In Witt's view, stablecoin balances aren't deposits, and treating them as such misrepresents what's actually happening. He closed with a pointed equation: "Stablecoins ≠ Deposits."

 

President Donald Trump didn't stay quiet either. On Tuesday, he took to Truth Social with a message that made his position unmistakably clear.

 

"The U.S. needs to get Market Structure done, ASAP. Americans should earn more money on their money. The Banks are hitting record profits, and we are not going to allow them to undermine our powerful Crypto Agenda that will end up going to China, and other Countries if we don't get the Clarity Act taken care of," Trump wrote.

 

Senator Cynthia Lummis quickly reposted Trump's message, adding her own call to action: "America can't afford to wait. Congress must move quickly to pass the Clarity Act."

 

The same day Trump posted, a Coinbase delegation led by CEO Brian Armstrong visited the White House for talks. The timing was not subtle.

 

The Real Stakes: The CLARITY Act

To understand why this debate matters so much right now, you need to understand the legislation being held hostage by it.

 

The GENIUS Act, signed into law in July 2025, established the first federal framework for payment stablecoins. The CLARITY Act is its sequel: a broader market structure bill that would assign clear regulatory jurisdiction to the SEC and CFTC over the crypto industry, and is widely seen as the piece of legislation needed to unlock large-scale institutional participation in digital assets.

 

The bill cleared the House comfortably but has been mired in Senate gridlock since January, when the Senate Banking Committee indefinitely postponed a planned markup vote. The trigger was Coinbase withdrawing support over a proposed amendment that would have restricted stablecoin rewards for users.

 

That withdrawal, announced by CEO Brian Armstrong in a post on X the night before the scheduled committee vote, split the crypto industry. a16z crypto's Chris Dixon publicly disagreed, posting "Now is the time to move the Clarity Act forward." Kraken's co-CEO Arjun Sethi also pushed back, writing that "walking away now would not preserve the status quo in practice" and warning it "would lock in uncertainty and leave American companies operating under ambiguity while the rest of the world moves forward."

 

The stakes for Coinbase are concrete. Stablecoins contribute nearly 20% of Coinbase's revenue, roughly $355 million in the third quarter of 2025 alone, and most of USDC's growth is occurring on Coinbase's platform. Coinbase currently offers 3.5% yield on USDC, a figure most traditional bank accounts can't come close to matching.

 

 

Banks Are Scared, and They Have the Numbers to Show It

The banking lobby's concern isn't hypothetical. Banking trade groups, led by the Bank Policy Institute, have warned that unrestricted stablecoin yield could trigger deposit outflows of up to $6.6 trillion, citing U.S. Treasury Department analysis. Bank of America CEO Brian Moynihan put a similar figure forward, reportedly suggesting as much as $6 trillion in deposits, representing roughly 30-35% of all U.S. commercial bank deposits, could be at risk.

 

Stablecoins registered $33 trillion in transaction volume in 2025, up 72% year-over-year. Bernstein projects total stablecoin supply will reach approximately $420 billion by the end of 2026, with longer-run forecasts from Citi putting the market at up to $4 trillion by 2030. Those aren't niche numbers anymore. At that scale, deposit competition becomes a serious macroeconomic question.

 

The American Bankers Association and 52 state bankers' associations explicitly urged Congress to extend the GENIUS Act's yield prohibitions to partners and affiliates of stablecoin issuers, warning of deposit disintermediation.

 

The Bottom Line

What's playing out right now is a genuine philosophical disagreement about what money is and how it should be regulated, wrapped inside a very consequential legislative fight, a prize fight with Banks in one corner and Crypto in the other.

 

Dimon's argument is not frivolous. Banks are regulated as heavily as they are because of what they do with deposited money, and a world where consumers move trillions into yield-bearing crypto instruments held at lightly regulated platforms carries real risks. The history of financial crises is largely a history of regulatory arbitrage gone wrong.

 

But Witt's counter is also not frivolous. The GENIUS Act was designed specifically to prevent stablecoin issuers from doing the things that make banks dangerous. A fully reserved, non-lending stablecoin issuer is structurally different from a fractional reserve bank, and applying the same regulatory framework to both risks conflating two fundamentally different business models.

 

What's harder to square is that the banking lobby's intervention in the CLARITY Act seems, to many in the crypto world, less about prudential regulation and more about protecting market share. President Trump has not been subtle about that read, accusing banks of holding the CLARITY Act hostage to protect incumbent interests against crypto competition.

 

With the legislative window narrowing, Armstrong back at the White House, and Trump openly calling out the banking lobby by name, this standoff has reached the kind of inflection point where someone is going to have to blink. The question is whether either side is willing to do it before time runs out entirely.