Beijing Kills Hong Kong's Stablecoin Ambitions: Who Controls the Right of Coinage?

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Introduction

Welcome to the Tokenized newsletter, brought to you by the creators of the Tokenized Podcast Simon Taylor of Fintech Brainfood, Pet Berisha of Sporting Crypto, and Shwetabh Sameer of Molten Ventures.

We are the newsletter for institutions that need help preparing for a Tokenized future.

We run through the headlines every week, what it means for you and a market readout. Always with an institutional, business-focused perspective. 

Join us every week as we meet your Tokenization needs.

Simon’s Market Readout 💬 

The Federal Reserve just flipped the script on payments innovation. Governor Waller directed Fed staff to explore a "payment account" (aka a "skinny master account") designed specifically for entities "focused primarily on payments innovations."

This is not small news.

For the U.S., this represents a major shift. Access to master accounts has been tightly guarded. It's only available to chartered banks. The Fed has a three-tiered system: Tier 1 includes federally insured institutions with streamlined review. Tier 2 covers non-federally insured but supervised institutions with intermediate review. Tier 3 is the strictest level, reserved for non-federally insured institutions without federal supervision.

This "payment account" is a new approach for the Fed. But this type of nonbank access? Increasingly normal in the rest of the world.

Here's what matters:

1. The immediate winners aren't who you'd expect. Stablecoin issuers will obviously get attention. But short-term, the biggest beneficiaries will likely be fintech companies. Payments companies like Stripe and Wise. Neobanks like Chime, Ramp, and Brex. They get better unit economics. They get more control. Instead of revenue-sharing with bank partners for Fed access, they own the entire flow.

2. This sets the stage for institutional stablecoin infrastructure. Waller explicitly mentioned the Fed's interest in "emerging stablecoin use cases and the tokenization of financial products and services." A payment account framework that works for fintechs establishes the template for stablecoin issuers to access Fed rails directly. That solves one of the biggest infrastructure gaps in institutional digital asset adoption.

3. The U.S. is finally catching up. Direct central bank access for nonbanks is standard practice globally. The Fed acknowledging this reality signals they're positioning as an active participant in the payments revolution - not a gatekeeper blocking access.

These accounts won't get interest paid by the Fed. But for companies currently forced to route everything through chartered bank partners, that trade-off is worth it for direct access to U.S. payment system infrastructure.

It will be fascinating to see fintech adoption in the next 12-18 months as the framework gets tested. Stablecoin integration will follow later once regulatory frameworks solidify further. The question for financial institutions: are you still waiting for final rules, or are you exploring what direct Fed access could mean for your digital asset strategy?

Stories You Can't Miss 📰

🏛️ Ripple Acquires GTreasury for $1 Billion: Crypto Infrastructure Meets Corporate Cash Management

Key Points:

• The Deal: Ripple acquires GTreasury for $1 billion, its third major acquisition in 2025 following purchases of Hidden Road ($1.25 billion) and Rail ($200 million). This brings the total acquisition spending to ~$2.5 billion in 2025 alone

• The Asset: GTreasury manages $12.5 trillion in annual payment volume for 1,000+ corporate clients across 160 countries, including American Airlines, Goodyear, Volvo and Christian Louboutin

• The Stack: Ripple now controls a vertically integrated enterprise finance infrastructure: Metaco for custody and tokenization, Hidden Road for prime brokerage and collateral management, Rail for stablecoin payments orchestration, and GTreasury for the CFO command console

• The Integration: Corporate treasurers can potentially access overnight yields by depositing cash or stablecoins (including Ripple's RLUSD) with Hidden Road, which lends to hedge funds and banks with Treasury collateral

• The Market: Deal targets the $120 trillion corporate treasury payments market - CEO Brad Garlinghouse frames this as Ripple "breaking into" the core infrastructure where Fortune 500 cash management actually happens

The Tokenized Take:

This isn't about persuading CFOs to use crypto. It's about embedding stablecoin rails into systems where corporate treasury teams already work. No need to ask them to change their workflow, ERP integrations or banking relationships.

The strategic insight centers on workflow preservation rather than disruption. GTreasury sits inside the cash forecasting, payment execution, and risk management layer for enterprises processing trillions annually. When a treasurer at American Airlines opens their GTreasury dashboard tomorrow, it will look identical to the previous day. But the backend settlement layer can now include the option to route payments through RLUSD instead of SWIFT correspondent networks. Same interface, same approval workflows, same bank connectivity - fundamentally different settlement rails available when cross-border speed or cost justifies the switch.

If Ripple integrates it with Hidden Road, this can potentially provide the institutional-grade yield component corporate treasurers expect from idle cash. The mechanism will mirror traditional prime brokerage: treasurers deposit cash or stablecoins with Hidden Road, which lends to hedge funds and institutional borrowers through repo markets, typically collateralized by U.S. Treasuries or equivalent high-quality liquid assets. Corporates will be able to earn overnight interest rates competitive with money market funds, but settlement occurs onchain rather than through traditional bank custody. For treasury teams managing hundreds of millions in operating cash, yield on idle balances matters.

The strategic questions become: Can Ripple execute integration without disrupting existing GTreasury client relationships? Will enterprises actually choose blockchain settlement for corporate payments when traditional rails already function? And critically - does RLUSD (currently ~0.25-0.27% market share at $840 million supply) have the liquidity depth and regulatory clarity to handle corporate treasury volumes?

What shifts the competitive landscape is distribution access. Circle and Tether built dominance by embedding USDC and USDT into crypto-native exchange infrastructure. Ripple is attempting the inverse strategy: embedding RLUSD into the TradFi treasury infrastructure that already connects to 13,000+ banks. If GTreasury's existing Fortune 500 clients adopt stablecoin settlement for even a fraction of cross-border payments, that represents a fundamentally different adoption pathway than exchange-driven stablecoin growth.

The execution risk centers on cultural integration - whether GTreasury's traditional corporate finance team aligns with Ripple's crypto strategy, and whether Ripple can resist forcing XRP into workflows where stablecoins and fiat function perfectly well. And as we all know, the "promised synergies" of M&A deals often prove harder than the slide deck suggests.

🚀 Tempo Raises $500M at $5B Valuation: The Capital Markets Just Validated Payment-Specialized Blockchains

Editor's Note: Simon Taylor, co-creator of Tokenized, works at Tempo. The analysis below represents the views of Tokenized's other editorial contributors and does not reflect Simon's perspective or involvement.

Key Points:

• The Capital: Tempo secured $500 million in Series A funding led by Thrive Capital and Greenoaks, valuing the Stripe/Paradigm-incubated blockchain at $5 billion. This ranks it amongst the largest venture rounds for a blockchain infra startup in the last few years

• Lightning Speed to Valuation: Less than two months from public disclosure (early September) to $5 billion valuation, hitting unicorn status faster than virtually any blockchain infrastructure company in history

• The Backers: Round includes Sequoia Capital, Ribbit Capital, and SV Angel - notably all existing Stripe investors, signaling confidence from mainstream venture capital rather than crypto-native funds.  

• The Talent Grab: Dankrad Feist, Ethereum Foundation researcher and architect of "Danksharding," announced he's joining Tempo full-time while staying on as an Ethereum research advisor. This has drawn mixed reactions from the Ethereum community

• The Infrastructure Thesis: Payment-optimized L1 designed to handle tens of thousands of transactions per second with sub-second finality, targeting payment acceptance, global payouts, remittances and AI-initiated "agentic payments"

• Design Partners Already Locked: OpenAI, Anthropic, Shopify, Visa, Deutsche Bank, Standard Chartered, Revolut, Nubank, DoorDash, and Mercury are shaping infrastructure requirements through private testnet operations

The Tokenized Take:

When we covered Tempo's launch in August, we framed it as the race for vertical integration: Stripe building a comprehensive stablecoin stack with Bridge for issuance APIs, Privy for wallets, and Tempo for transaction processing infrastructure. The strategic question then was whether payments-specific blockchain design offered meaningful advantages over general-purpose chains handling everything from DeFi to NFTs.

The $5 billion valuation has been achieved in less than two months after public disclosure in September. This answers that question decisively. To put this in perspective: Circle trades at approximately $30-35 billion in public markets with years of operational history, $50+ billion in USDC circulation, and proven revenue generation. Tempo reaches $5 billion valuation with zero mainnet launch, zero transaction volume, and zero revenue. That ~15-16% relative valuation compared to the established stablecoin player signals venture capital believes payments-specific blockchain infrastructure will capture structural advantages that justify premium multiples even pre-launch.

The speed to valuation matters because it reveals urgency in the capital markets. Traditional infrastructure companies spend years proving product-market fit before reaching billion-dollar valuations. Tempo went from stealth mode job postings to $5 billion in under 60 days. This isn't patient capital waiting for metrics - this is strategic positioning capital betting that whoever controls the payment-optimized blockchain layer captures outsized economics in the stablecoin infrastructure stack.

The investor composition reveals the strategic positioning. Thrive Capital, Greenoaks, Sequoia, Ribbit, and SV Angel represent Stripe's existing venture backers, not crypto-native funds. This is mainstream VC betting that blockchain payment infrastructure becomes critical fintech infrastructure - the same investors who backed Stripe's original payments processing vision now backing its blockchain evolution.

Dankrad Feist joining full-time shifts the narrative from "corporate blockchain experiment" to "serious technical architecture challenge." When the architect of proto-danksharding leaves the Ethereum Foundation for a payments-focused L1, it validates that payment-scale infrastructure (tens of thousands of TPS with sub-second finality) requires different technical tradeoffs than general-purpose platforms. Ethereum processes 15-30 TPS. Shopify processes $290+ billion GMV annually - if even 2% routes through stablecoin checkout, that requires settlement infrastructure at reliability levels existing chains don't consistently deliver. 

The design partner roster signals what institutional payment infrastructure actually requires. When OpenAI and Anthropic participate in shaping blockchain architecture, they're defining requirements for AI-initiated payments - autonomous agents purchasing API credits or routing micropayments without human authorization loops. When Visa and Deutsche Bank join as architecture consultants rather than just integration partners, they're preparing for stablecoin settlement rails operating parallel to traditional correspondent banking.

So the question becomes: Can a corporate-incubated L1 achieve sufficient decentralization to satisfy regulatory requirements while maintaining throughput and uptime guarantees? Payment networks require 99.999% uptime. Decentralized systems prioritize censorship resistance over uptime optimization. Tempo's validator set bootstraps with design partners before transitioning to permissionless validation - a pragmatic approach that creates regulatory risk if "transition to permissionless" extends indefinitely.

Tempo mainnet launch is expected for 2026. The next 12-18 months will answer whether payments-specific blockchains (including Circle’s Arc and Robinhood’s chain ambitions) represent genuine infrastructure improvement or expensive feature differentiation. Watch for design partners announcing stablecoin settlement volumes on earnings calls. 

💸 Coinbase Acquires Echo for $375M: Assembling the Monopoly on Tokenized Capital Formation

Coinbase has acquired Echo, the onchain fundraising platform founded by crypto veteran Jordan "Cobie" Fish, for approximately $375 million in cash and stock. The deal positions Coinbase to control the entire token lifecycle—from creation to trading—and signals the exchange's intention to dominate tokenized capital formation before traditional finance fully recognizes it as a competitive threat.

Key Points:

• What Echo Built: The Sonar platform enables self-hosted public token sales with time-weighted deposits (preventing front-running), built-in compliance, configurable jurisdiction controls, and zero middleman cuts. Echo has facilitated over $200 million across roughly 300 deals since launch

• The Acquisition Spree: Coinbase's 2025 purchases create vertical integration across the token lifecycle: LiquiFi for token management (July), Deribit for derivatives ($2.9B, May), and now Echo for fundraising—controlling the entire stack from creation to trading

• The Expansion Plan: Coinbase explicitly stated Sonar will extend beyond crypto-native tokens to "tokenized securities and real-world assets," positioning for when traditional capital formation moves onchain

• Founder's Perspective: Cobie confirmed on X: "I certainly didn't think Echo would be sold to Coinbase, but here we are", noting he started Echo two years ago expecting a 95% chance of failure

The Tokenized Take:

This acquisition represents Coinbase's bid to own the entire onchain capital formation infrastructure before incumbents understand what's being built. Shan Aggarwal, Coinbase's chief business officer, framed it clearly: the company now has "the components and capability to rebuild the capital market stack from end to end."

Look at Coinbase's 2025 acquisition architecture: LiquiFi for token creation and management, Echo for compliant fundraising infrastructure, Deribit for derivatives trading at institutional scale. The strategy is vertical integration across the complete token lifecycle: Create → Raise → List → Trade → Custody. All on one platform. All compliant. All controlled by Coinbase.

Echo's Sonar product represents "ICO 2.0 with grown-up clothes on." Self-hosted public token sales with time-weighted deposits eliminate front-running. Built-in compliance and jurisdiction controls address the regulatory chaos that killed the 2017 ICO era. Zero middleman fees remove the investment banking layer that extracts 3-7% from traditional capital raises. The infrastructure enables anyone to run compliant token sales without intermediaries. This is precisely why Coinbase wants to own it rather than compete with it.

The critical signal: Coinbase explicitly plans to extend Sonar to "tokenized securities and real-world assets." Translation: When companies tokenize equity, when real estate tokenizes ownership, when revenue streams tokenize cash flows, Coinbase intends to be the primary capital formation platform. This positions them as the onchain Goldman Sachs - controlling issuance infrastructure for the next generation of securities.

The competitive moat becomes formidable. Circle and Stripe are racing to control stablecoin infrastructure and payment rails. Coinbase is racing to control capital formation infrastructure. When a company wants to raise capital via tokenized equity, they'll need: compliant issuance rails (Echo/Sonar), liquid trading venues (Coinbase Exchange), institutional-grade derivatives (Deribit), and token management infrastructure (LiquiFi). Coinbase now owns all four layers.

The $375 million price tag looks strategic rather than opportunistic. Echo raised $200 million across 300 deals in two years – now this is solid but not spectacular transaction volume. Coinbase paid for positioning, not current revenue. They're betting that owning the compliance-ready fundraising infrastructure becomes critically valuable when traditional capital markets begin migrating onchain at scale.

So the question becomes: Will regulators allow one platform to control issuance, trading, and custody infrastructure simultaneously? Traditional finance maintains strict separation between investment banks (issuance), exchanges (trading), and custodians (asset holding). Coinbase is assembling all three functions under unified control, arguing that blockchain infrastructure requires integrated architecture for proper compliance and investor protection.

The indicator to watch: Whether any publicly-traded company announces tokenized equity issuance on Coinbase infrastructure, validating that onchain capital formation has moved from crypto-native projects to mainstream corporate finance. When that happens, Coinbase's $375 million bet will look prescient rather than premature. That said, watch out for SEC clarity around digital asset securities framework.

 🏛️ Beijing Kills Hong Kong's Stablecoin Ambitions: The Real Question Is Monetary Sovereignty, Not Fraud

Just months after Hong Kong launched its stablecoin licensing regime in August 2025, Beijing has pulled the emergency brake. The People's Bank of China and Cyberspace Administration of China instructed Ant Group and JD.com to pause their stablecoin initiatives in Hong Kong, citing concerns over who controls the "ultimate right of coinage."

Key Points:

• The Stated Concerns: Beijing raised two primary issues - "Who has the ultimate right of coinage: the central bank or private companies?" and fraud risk management, particularly given Tether's widespread use for capital control evasion in the region

• The Timing Whiplash: Hong Kong's stablecoin regulatory framework launched August 1, 2025, specifically designed to promote RMB-pegged stablecoins and extend yuan's global reach outside traditional banking rails. Beijing initially supported the initiative

• Broader Crackdown: China's securities regulator simultaneously ordered local brokerages to pause real-world asset tokenization activities in Hong Kong, signaling systematic pullback from offshore digital asset ventures

• The Fraud Angle: Hong Kong SFC's Ye Zhiheng warned the stablecoin framework "increases fraud risk," citing losses at some firms shortly after rules took effect - convenient timing for regulatory justification

The Tokenized Take:

This isn't about fraud. This is about who controls money issuance in the world's second-largest economy and Beijing just answered that question decisively.

The regulatory contradiction reveals the actual concern. Hong Kong launched its stablecoin framework in August that could enable RMB-pegged stablecoins, extending yuan influence globally without traditional correspondent banking infrastructure. Beijing initially endorsed this as strategic financial infrastructure. Less than three months later, the PBoC killed the entire initiative when Ant Group and JD.com actually attempted to participate. The fraud justification doesn't explain why tokenized money market funds, literally the safest products in institutional finance - are also getting shut down.

The fundamental question: "Who has the ultimate right of coinage?" This frames stablecoins as competing with central bank monetary authority rather than complementing it. When private companies issue currency-like instruments at scale, they create parallel monetary systems outside central bank control. Ant Group's Alipay already processes ~$20 trillion of transaction volume, which is more than many banking systems around the world. Allowing Ant to issue stablecoins would create a private monetary system with better user experience, faster settlement, and global reach - directly competing with the PBoC's e-CNY digital currency initiative.

The Tether angle matters more than fraud rhetoric suggests. USDT is extensively used in China for capital control evasion - converting RMB to USDT via OTC platforms, then transferring value offshore outside traditional banking surveillance. The PBoC also has a longstanding enforcement posture on gambling operations crackdowns using USDT for cross-border flows. Beijing sees dollar-pegged stablecoins as mechanisms for yuan substitution in Asian markets, undermining both capital controls and currency positioning.

This creates strategic asymmetry across major economies:

• United States: Aggressively enabling stablecoin infrastructure through federal legislation, viewing dollar-denominated stablecoins as extending USD dominance globally

• Europe: Implementing MiCA regulatory frameworks while debating digital euro necessity - regulatory clarity with strategic ambivalence

• China: Systematically blocking private stablecoin issuance while promoting state-controlled e-CNY as the only permitted digital currency

The competitive implications become clear. If Western economies enable private stablecoin infrastructure while China restricts it to state-issued digital currency, capital will flow toward systems offering programmability, composability, and private sector innovation. China's digital yuan pilot has struggled with adoption precisely because state control limits functionality - users prefer WeChat Pay and Alipay for superior user experience despite identical settlement speeds.

So the question becomes: Can Beijing maintain capital control in an environment where private stablecoins offer better functionality? Restricting domestic issuance doesn't prevent USDT usage - it just pushes activity offshore and underground. The PBoC can ban Ant Group from issuing stablecoins, but it cannot prevent Chinese users from accessing Tether or Circle via international platforms.

📰 Some More News:

🏦 Tokenization & Finance

• PayPal's crypto partner mints $300 trillion worth of stablecoins in 'technical error' [Read more here]

• Avail Integration Enables TRON dApps and Users to Access Cross-Chain Liquidity (read more here)

• BlackRock lists bitcoin ETP for UK retail investors [Read more here]

• Wall Street Bank Citi Sees Stablecoins Powering Crypto's Next Growth Phase [Read more here]

• VanEck files for first Lido staked ETH ETF [Read more here]

• Ripple-backed Evernorth aims to raise over $1B for XRP treasury [Read more here]

• Solana Could Hit $6,000 as Tokenized Finance Booms: RockawayX [Read more here]

• Euronet taps Fireblocks to power stablecoin cross-border payments [Read more here]

• ACI Worldwide and BitPay power crypto and stablecoin payments for global merchants and PSPs [Read more here]

• TCH Marks Wider Adoption of Bank Account Tokenization Tool [Read more here]

• $1.2B exits US Bitcoin ETFs just as London makes crypto comeback [Read more here]

• Tap launches Bitcoin Treasury as a Service offering [Read more here]

• YouTube Star MrBeast Files Trademark for Crypto Exchange and Payments Service [Read more here]

🤑 Funding and M&A

• Blockchain.com Has Held Talks to Go Public Via SPAC Deal: Sources [Read more here]

• Telcoin Raises $25 Million to Support Planned Opening of Regulated Blockchain Bank [Read more here]

• DeFi Earning Aggregator Turtle Raises $5.5 Million [Read more here]

• a16z invests $50M in Solana staking protocol Jito [Read more here]

• Figment acquires staking analytics firm Rated [Read more here]

• Ripple-linked Evernorth to go public in $1B SPAC to build massive XRP treasury [Read more here]

• Polychain Capital leads $110 million investment to kickstart a Berachain crypto treasury [Read more here]

• Daylight Energy secures $75M to expand decentralized solar network [Read more here]

💼 Government & Policy

• Crypto's Half-finished Legislative Agenda Teeters as CEOs Set Meeting With Democrats [Read more here]

• Bitcoin-Backed Stablecoins Top List of GENIUS Act Loopholes [Read more here]

• US shutdown enters third week as Senate Democrats plan crypto roundtable [Read more here]

• Ondo Finance Urges SEC to Delay Nasdaq Tokenization Plan Over Transparency Concerns [Read more here]

• VanEck files first Lido staked ether ETF amid SEC's shift on liquid staking [Read more here]

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