JPMorgan Explores Crypto Trading

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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 💬 

I heard somebody describe stablecoins as "crypto for grown-ups." But the real theme of 2025 isn't that stablecoins are crypto for grown-ups - it's that crypto itself is now for grown-ups. We just call it tokenization instead.

Consider the reversals we've witnessed in the past 12 months. Larry Fink. Jamie Dimon. JPMorgan has gone from "will never let you trade Bitcoin" to actively considering crypto trading on behalf of institutional clients. And all of this is happening because their clients are demanding it.

Three things worth noting:

1. Demand is rising while prices fall. That defies speculative logic. When institutional interest increases during a downturn, you're watching something become infrastructure, not a trade.

2. The dot-com parallel applies. Santi at Inversion Capital has compared this moment to the early 2000s - stock prices falling while actual revenues and utility kept climbing. That can be an uncomfortable phase if you're a crypto true believer. But it can be a very comfortable phase if you're a product builder trying to solve problems for real human beings. I, for one, happen to fall into that latter category.

3. The infrastructure thesis is playing out. Once stablecoins demonstrated economic utility, institutions recognized the networks themselves have economic utility. That's the unlock.

This will be incredibly good for reducing the cost of running our global financial system - lifting people into that system and unlocking financial mobility for a whole new generation. Because whenever we do that, good things follow.

Well, let's hope anyway, if macro doesn't crush us first.

Have an amazing holiday break, everybody. We'll be back in the new year.

Stories You Can't Miss 📰

🏛️ JPMorgan Explores Crypto Trading for Institutional Clients

JPMorgan Chase is exploring crypto trading for institutional clients - spot and derivatives both on the table. The world's largest bank, whose CEO told Congress he'd "close it down" if he were the government, is now figuring out how to build a trading desk for the asset he once called a "pet rock."

Key Points:

• Early-stage exploration: JPMorgan's markets division is assessing crypto products and services for institutional clients, including spot and derivatives trading capabilities. Nothing is live yet.

• Building on existing infrastructure: In October, JPMorgan announced plans to allow institutional clients to use Bitcoin and Ether as collateral by year-end. Earlier this month, its asset management arm launched a tokenized money fund. This signals growing comfort with digital assets across multiple business lines.

• OCC cleared the path: Multiple interpretive letters in 2025 (including IL 1183 in March, IL 1184 in May, and IL 1186 in November) confirmed banks can custody crypto, execute trades on behalf of customers, outsource to sub-custodians, and hold tokens to pay network fees. The regulatory barriers that kept banks on the sidelines have been systematically removed.

• Competitors are already live: PNC launched direct Bitcoin trading December 9th via Coinbase infrastructure. Goldman Sachs executed the first interbank crypto options trade with DBS in October. Morgan Stanley will launch crypto trading on E*Trade in H1 2026. Bank of America enabled 15,000 wealth advisors to recommend crypto allocations starting January 5th.

The Tokenized Take:

Jamie Dimon's Bitcoin commentary tells you everything about how the Overton window has shifted:

• 2017: "It's a fraud"

• 2023: "Hyped-up fraud... a pet rock"

• 2024: "I'll never talk about this again"

• 2025: Trading desk

The pet rock will soon sit on JPMorgan's trading floor.

But this isn't about Dimon changing his mind. Three forces converged that made sitting out impossible.

The regulatory green light. The OCC spent 2025 systematically removing barriers. Crypto custody, stablecoin activities, node validation, brokerage - all confirmed as permissible activities for national banks. The December letter stated explicitly that banks can execute crypto trades on behalf of customers and outsource to qualified sub-custodians. Crypto now sits inside the banking perimeter, not outside it.

Client pressure. Here's the uncomfortable reality: an increasing number of JPMorgan's institutional clients already trade crypto. They just do it through Coinbase Prime, not JPMorgan. Every hedge fund asking for crypto access, every family office inquiring about Bitcoin allocation - that's a relationship walking out the door. When PNC launches direct trading and Bank of America provides 15,000 advisors with crypto recommendations, JPMorgan's "we don't do that" becomes a competitive liability rather than a risk management virtue.

Competitive dynamics. Goldman Sachs has operated a crypto derivatives desk for four years. Standard Chartered trades spot Bitcoin and Ether through its UK branch. DBS and Goldman completed the first interbank crypto options trade in October. The question is no longer whether institutional crypto trading happens through traditional finance. It's who captures the flow.

Build or partner? PNC went the partnership route, integrating Coinbase's infrastructure within five months of announcement. Morgan Stanley chose Zerohash. JPMorgan has the balance sheet and engineering capability to build internally - they developed Kinexys (formerly Onyx) in-house rather than licensing third-party blockchain infrastructure. JPMorgan has been building pieces (collateral, tokenized funds, Kinexys) while the trading desk is the newest piece under consideration.

What makes this moment different: crypto prices are down ~30% from October highs, and banks keep building anyway. The speculative buzz has settled down. And yet the infrastructure commitments continue. This isn't an institutional speculation bubble. This is an asset class arriving at the trading desks that once dismissed it.

For institutional decision-makers: the last major holdout is evaluating entry. If you've been waiting for regulatory clarity or peer validation before developing your own crypto capabilities, both are now available. The window for strategic positioning is narrowing - early movers like PNC and Goldman are already capturing client flow while others assess their options.

When the bank whose CEO called Bitcoin worthless decides it's worth trading, the debate has finally concluded. The question now is execution.

🚀 Coinbase Just Made "Roll Your Own Stablecoin" a Vendor Decision

At their System Update conference this week, Coinbase unveiled Custom Stablecoins - white-label infrastructure that lets any company issue its own branded stablecoin. Flipcash, Solflare and R2 are already building on it. This follows Western Union's USDPT on Solana and Klarna's KlarnaUSD on Tempo. The difference? Coinbase just made it accessible to any company with distribution.

Key Points:

• Stablecoin-as-a-service model: Businesses can create custom-branded stablecoins backed 1:1 by a flexible mix of USDC and other USD-stablecoins, all custodied by Coinbase - no infrastructure buildout required

• Zero-fee interoperability: Custom Stablecoins swap 1:1 with USDC and other Coinbase-supported stablecoins, providing instant access to global USDC liquidity from day one - no fragmentation risk

• Revenue model built in: Issuers earn rewards on their stablecoin's supply, accrued daily and paid out directly to their Prime account

• Early partners announced: Flipcash, Solflare and R2 are already building. Coinbase also previewed ‘Coinbase Tokenize,’ an end-to-end institutional platform for tokenizing real-world assets

• Part of broader platform expansion: The announcement coincided with stock trading, prediction markets via Kalshi, and expanded APIs across custody, payments, trading, and stablecoins

The Tokenized Take:

Coinbase just commoditized stablecoin issuance.

Bridge, M0 and Agora have been building 'roll your own stablecoin' infrastructure for specialized use cases. But Coinbase bundles the entire stack: issuance, custody, compliance, 100M+ wallet distribution, and zero-fee USDC liquidity - all through a single Prime account integration. What previously required hiring a crypto team, building reserve management infrastructure, and navigating regulatory complexity is now a commercial agreement with Coinbase Prime. The build-vs-buy calculation just tilted decisively toward buy.

The loyalty programs implications also deserve attention. Consider what airlines and retailers manage today: billions in outstanding points sitting on their balance sheets as deferred revenue liabilities. Every point issued is a future obligation. The economics depend on "breakage" estimates - customers forgetting to redeem - and every redemption carries real fulfillment costs.

Coinbase Custom Stablecoins help flip this structure entirely. The brand isn't the issuer - Coinbase is. From the brand's perspective, they carry no liability at all. Coinbase holds the reserves, manages redemption obligations, and handles compliance. The brand gets customer engagement through a branded token, plus weekly reward payouts (Coinbase's revenue share on the float). Those rewards can fund promotions, cashback, or marketing - same economic outcome as earning yield, different legal wrapper. Same customer engagement mechanics. No balance sheet liability. No reserve management. No redemption overhead.

The obvious concern is fragmentation - doesn't the market fragment if every company launches its own stablecoin? This is where Coinbase's architecture matters. These tokens are backed by USDC and swap at par with zero fees. Users can hold BrandCoin for loyalty mechanics while accessing global USDC liquidity whenever they need it. Interoperability is foundational.

The competitive positioning is clear. Stripe has Bridge and Tempo. Coinbase now has Custom Stablecoins plus 100+ million wallets plus a regulatory posture that includes appointing former British Finance Minister George Osborne to their advisory council. Both are racing to become the AWS of financial infrastructure - the platform that every brand uses to issue programmable money.

For enterprise decision-makers, the question is no longer "should we issue a stablecoin?" It's becoming "which platform gives us distribution, compliance, and interoperability without the buildout?" Coinbase just made the second option easier.

💸 Shift4 Launches Stablecoin Settlement - And Puts 1.5% Instant Payouts on Notice

Shift4 has launched stablecoin settlement for hundreds of thousands of merchants. Restaurants, hotels, stadiums and retailers can now opt to receive payouts in USDC, USDT, EURC, or DAI (24/7, weekends and holidays included) instead of waiting for traditional bank transfers.

Key Points:

• Multi-stablecoin, multi-chain flexibility: Merchants choose from four stablecoins across seven networks (Ethereum, Solana, Polygon, Base, Stellar, TON, Plasma)

• Significant scale: Shift4 processes over $200 billion in annual payment volume, serves ~40% of U.S. hotels, one-third of table-service restaurants, and 75% of U.S. professional sports stadiums

• Treasury optionality: USDC/USDT for dollar stability, EURC for European operations, DAI for decentralized treasury strategies

• Part of a coordinated wave: Visa announced U.S. USDC settlement on December 16^th - Cross River, Highnote, and Lead Bank launched stablecoin settlement the same day as part of Visa's pilot

The Tokenized Take:

The merchant settlement problem is simple: if you want your money faster than the standard 2-3 day window, you pay for it.

Square charges 1.5-1.75% for instant payouts. PayPal charges 1.5%. Every major PSP has a similar fee structure. That's the tax on accessing your own revenue before the banking system finishes its batch processing.

For a restaurant doing $50,000 in monthly card volume, that 1.5% fee costs $9,000 annually - just to get paid faster. Stablecoins settle in seconds, around the clock, without the acceleration premium. Whether that fee disappears entirely or shrinks substantially depends on how PSPs structure their stablecoin offerings, but the pressure on instant payout pricing is now structural.

But are PSPs giving up a revenue line?

Not exactly. Traditional instant payouts require PSPs to advance funds before final settlement confirmation - tying up working capital and requiring prefunding across multiple banking partners. Stablecoin settlement compresses that timeline dramatically. When merchants receive funds on-chain in near real-time, the PSP's working capital requirements shrink. They're no longer prefunding payouts days before the banking system confirms final settlement.

Consider the international merchant use case. A hotel chain settling €2M monthly across international properties currently loses 40-80 basis points to correspondent banking chains and FX spreads (depending on corridor). EURC settlement to a single treasury wallet reduces that overhead significantly. Add the operational simplification of 24/7 availability across time zones, and the value proposition becomes hard to ignore.

Look at what happened in December. Visa called its USDC settlement launch 'a major milestone.' Cross River, Highnote, and Lead Bank went live as part of that pilot. Now Shift4 opens the door for mainstream merchant acquiring - not as a pilot, but as production infrastructure for hundreds of thousands of businesses.

So who loses here? Traditional acquiring banks that built revenue models around float income face margin compression. ACH networks processing next-day merchant settlements look increasingly slow. And any PSP still charging 1.5% for instant access will need to explain why competitors offer faster settlement at lower cost.

The pilot phase is over. Now comes the hard part: explaining to merchants why their competitors get settled faster and cheaper.

🏛️ SoFi Becomes First National Bank to Issue a Public Stablecoin

SoFi Technologies has launched SoFiUSD, a fully reserved U.S. dollar stablecoin issued by SoFi Bank, N.A., making it the first nationally chartered bank to issue a stablecoin on a public, permissionless blockchain. But the headline undersells the story. SoFi isn't just issuing a stablecoin. It's building infrastructure for other banks and fintechs to do the same.

Key Points:

• First national bank on public rails: SoFiUSD is issued by SoFi Bank, N.A., an OCC-regulated, FDIC-insured institution, making SoFi the first U.S. national bank to launch a stablecoin on a public blockchain

• Federal Reserve access for reserves: As a nationally chartered bank with a Federal Reserve master account, SoFi says it can hold reserves in cash directly at the Fed. This eliminates the liquidity and credit risk associated with third-party banks or money market fund intermediaries. The current structure appears to be cash-backed, though reserve composition policies could evolve over time

• White-label infrastructure play: SoFi's stablecoin infrastructure enables banks, fintechs, and enterprise partners to either integrate SoFiUSD into their settlement flows or issue their own white-label stablecoins - all fungible with SoFiUSD at par - using SoFi's regulatory and operational framework

• 12.6 million customers, ~158 million enabled accounts: SoFi's platform powers accounts across its own consumer business and its technology platform clients, providing significant distribution potential for partners

• Revenue sharing model: SoFi plans to share yield generated from reserves with partners and SoFiUSD holders, creating an incentive structure for adoption

The Tokenized Take:

The pattern is getting hard to ignore.

A few weeks ago, Klarna launched KlarnaUSD on Stripe's Bridge infrastructure. Days ago, Visa launched USDC settlement with Cross River and Lead Bank on Solana. And this week, Coinbase announced Custom Stablecoins - a white-label platform for branded tokens backed by USDC.

SoFi’s angle is different.

Visa is adding stablecoin settlement to existing card rails - Cross River and Lead Bank are settlement participants, not issuers. Coinbase is offering custom tokens backed by USDC, meaning businesses are essentially wrapping an existing stablecoin with their brand. SoFi is the issuer, with reserves held directly at the Fed, and it's opening that issuance capability to the market.

The white-label component is where this gets strategically interesting. Most banks considering stablecoin issuance face the same barriers: regulatory licensing, reserve management, compliance frameworks, blockchain engineering, and 24/7 operational complexity. SoFi is commoditizing that entire stack.

Here's an example: A $5 billion regional bank wants to offer instant cross-border payouts to its SMB clients. Previously, that bank would need years of regulatory work, a blockchain engineering team, and an entirely new compliance infrastructure. Now they can white-label SoFi's rails in months. Their token would be fungible with SoFiUSD at par, meaning liquidity isn't fragmented. The regional bank gets stablecoin capabilities without building from scratch. SoFi captures the infrastructure fees and a share of the float.

This mirrors what Stripe did with Bridge and Tempo, but from the bank side. Stripe built infrastructure for fintechs to issue stablecoins. SoFi built infrastructure for banks to issue stablecoins. Both are betting on the same outcome: stablecoin issuance is becoming a platform business, not a product business.

The reserve structure also deserves attention. Circle holds reserves in money market funds and Treasuries managed through BlackRock. Tether's reserve composition has faced persistent scrutiny. SoFi, as a national bank with Fed master account access, says it can hold reserves as cash directly at the central bank. If maintained, this will eliminate the liquidity and credit risk that comes with third-party intermediaries. For corporate treasurers who spent 2023 reconsidering where their stablecoin issuer's banking partners actually hold reserves, that capability matters. It doesn't eliminate all counterparty risk (we still need to consider operational, legal, and smart contract risks) but on the reserve side, direct Fed access is as clean as it gets.

We wrote last month that stablecoin announcements were "coming weekly now, not quarterly." Each major player that launches validates the infrastructure for the next. SoFi's move confirms that bank-issued stablecoins aren't experiments - they're product roadmaps. And the fact that SoFi is building for other banks, not just itself, suggests they see stablecoin infrastructure as a growth vertical, not a feature.

What to watch: Partner announcements in Q1 2026. If SoFi signs two or three regional banks or major fintechs to white-label SoFiUSD, this becomes a legitimate platform business with network effects. If adoption stays limited to SoFi's own ecosystem, it's a nice product enhancement but not a category-defining move.

The infrastructure is live. Distribution is the question now. 

💸 RedotPay Raises $107M Series B as Stablecoin Payments Hit Escape Velocity

Hong Kong-based RedotPay just closed a $107 million Series B, bringing its total 2025 capital raised to $194 million. The round was led by Goodwater Capital with participation from Pantera Capital, Blockchain Capital, and Circle Ventures. The company, which hit unicorn status just three months ago with a $47 million round in September, now serves 6 million users across 100+ countries and processes over $10 billion in annualized payment volume. (We first covered RedotPay in August when they launched instant fiat-to-stablecoin onramps in the UK and EU.)

Key Points:

• The numbers tell the story: RedotPay has scaled from startup to $150 million+ in annualized revenue in under three years, with payment volumes nearly tripling year-on-year and 3 million new users joining the platform in 2025 alone

• Product stack spans the entire payments chain: The company offers stablecoin-based cards (including Visa cards) for spending, multi-currency wallets for storage, and global payout rails that send stablecoins directly to local bank accounts or e-wallets in emerging markets

• Circle integration signals infrastructure maturation: RedotPay now uses Circle's payment network for crypto-to-fiat transfers in Brazil, automatically converting stablecoins to local currency and avoiding the typical multi-day correspondent banking settlement path

• Profitable growth, not growth-at-all-costs: Unlike many fintech unicorns burning cash to acquire users, RedotPay claims profitability with an "efficient, scalable business model" – a rarity in the stablecoin payments space

• Founder pedigree and regulatory focus: Founded in April 2023 by ex-DBS banker Michael Gao, the company plans to use proceeds to expand geographic coverage and secure additional regulatory licenses as stablecoin frameworks solidify globally

The Tokenized Take:

RedotPay's trajectory shows where institutional stablecoin infrastructure is actually finding product-market fit: emerging markets where traditional banking rails fail everyday users.

The company isn't trying to replace Visa or Mastercard. It's filling gaps those networks can't reach profitably. A freelancer in Cairo receiving USDC payments, a merchant in São Paulo converting stablecoin revenues to reais, a family in Manila receiving remittances without Western Union's fee extraction – these are the use cases driving RedotPay's growth. The fact that payment volume tripled year-over-year while the company remained profitable suggests the unit economics work at scale.

Circle's participation through Circle Ventures deserves attention. Circle isn't just providing capital – they're providing infrastructure. RedotPay's Brazil integration runs on Circle's payment network, which handles the stablecoin-to-fiat conversion that would otherwise require expensive banking partnerships in each market. This is the infrastructure stack we've been tracking: Circle provides the stablecoin rails, RedotPay provides the distribution, and users get dollar access without touching the correspondent banking system.

The competitive landscape is heating up. When we covered Rain's $58 million Series B in September, we noted they were building API infrastructure enabling platforms like Airbnb and Amazon to offer stablecoin financial services globally through a single integration. Rain became a Visa Principal Member and now serves 1.5+ billion people through platform partnerships. RedotPay takes a different approach – consumer-facing distribution rather than B2B infrastructure – but both validate that stablecoin-to-card infrastructure is becoming a strategic chokepoint.

The geographic focus is RedotPay's edge. RedotPay has quietly built distribution across Latin America, Southeast Asia, and Africa – regions where stablecoin utility isn't theoretical. The Global Payout feature, introduced in June 2025, allows users to send stablecoins directly to local bank accounts or e-wallets and has gained particular traction in Latin America.

The question for institutional observers: When a startup can go from founding to $10 billion annualized payment volume in under three years using stablecoin rails, what does that say about the efficiency gap between blockchain settlement and traditional correspondent banking? RedotPay just provided the answer in $194 million worth of investor conviction.

📰 Some More News:

🏦 Tokenization, Stablecoins & Finance

• Aave governance dispute intensifies as founder warns hostile vote could hurt protocol Read more here

• Sling Money receives approval to offer crypto services in UK as stablecoin payments gain popularity Read more here

• How Ondo Finance plans to bring tokenized US stocks to Solana Read more here

• Amplify ETFs for stablecoins, tokenization go live for trading Read more here

• DTCC and JPMorgan set Ethereum settlement schedule with controversial 'undo' capability Read more here

• Lido Outlines $60M Plan to Expand Beyond Liquid Staking Read more here

• Intuit Partners with Circle to Integrate Stablecoin Infra, USDC Across Its Platform Read more here

• Extended crypto ETF outflows shows institutions disengaging: Glassnode Read more here

• Trend Research quietly becomes one of Ethereum's largest whales with 46K ETH buy Read more here

• Crypto Borrowing Shifts as DeFi Contracts and CeFi Activity Rebounds: CryptoQuant Read more here

• BlackRock pins Bitcoin ETF as major theme alongside T-bills, tech stocks Read more here

• Polymarket Volumes Surge on Layer 2 Speculation Read more here

🤑 Funding and M&A

• Brett Harrison's Architect Financial Technologies raises $35M for institutional derivatives exchange Read more here

• Peter Thiel-Backed Bank Erebor Raises $350M At $4.35B Valuation Read more here

• HashKey secures $250M for new crypto fund amid 'significant interest' Read more here

• Klarna to raise funding in USDC Read more here

• Kraken IPO, M&A deals to reignite crypto's 'mid-stage' cycle: fund manager Read more here

• Cipher enters US wholesale power market with Ohio data center acquisition Read more here

• Solana treasury-focused Upexi files for up to $1 billion capital raise Read more here

• Bitcoin treasury Matador's $58M share-sale approved to expand holdings Read more here

• DWF Labs' physical gold trade signals crypto capital's move into commodities Read more here

💼 Government & Policy

• Philippines blocks Coinbase, Gemini amid wider crackdown on unlicensed VASPs Read more here

• Russia's central bank unveils new crypto rules to be adopted in 2026 Read more here

• Ghana legalizes crypto trading with new law, plans to explore gold-backed stablecoins Read more here

• U.S. bipartisan lawmakers draw up tax bill with stablecoin and staking relief Read more here

• Spain to Implement Full EU MiCA Regulations Starting July 2026 Read more here

• Bybit to Exit Japan in 2026 Over Regulatory Compliance Issues Read more here

• Arizona lawmaker proposes barring taxes on crypto and blockchain Read more here

• Pro-Crypto Michael Selig Takes CFTC Helm as Caroline Pham Exits Agency Read more here

• IMF praises El Salvador's economic progress as tensions over bitcoin holdings ease Read more here

• SEC charges $14 million crypto investment scam targeting social media users Read more here

• House Republicans Urge IRS to Overhaul Crypto Staking Tax Rules Before 2025 Ends Read more here

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