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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 and Pet Berisha of Sporting Crypto, written by Jeremy Batchelder.

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.

Stories You Can't Miss 📰

Here's a brief "Stories You Can't Miss" section based on the provided information:

🌎 Bridge Launches Stablecoin-Enabled FX in Mexico

Bridge has launched local on and off-ramps in Mexico, enabling seamless movement between dollars, pesos, and stablecoins through simple APIs.

Key Points:

• The service allows near real-time settlement of USD-MXN cross-border transactions

• Users can access competitive FX rates with no minimum volume requirements

• Global operations no longer require multiple bank accounts or intermediaries

• Brazil integration planned for Summer 2025, with more LATAM countries to follow

The Tokenized Take:

• Strategic timing for LATAM expansion: Artemis.xyz has reported that approximately 10% of all USD→Mexico remittances are now moving through cryptocurrency and stablecoins. This is a clear market for direct Mexico support with fast follow-ups to other regions.

• Vertical integration: This is a clear example of vertical integration and orchestration companies moving further down the value chain to own the whole stack. We expect to see more companies that own the end-user relationship move into licensing and regional ramps as they grow their full suite of stablecoin products.

💳 Mastercard Unveils End-to-End Stablecoin Transaction Capabilities

Mastercard has announced comprehensive stablecoin acceptance and payment capabilities, creating an ecosystem where consumers can spend stablecoins and merchants can receive them.

Key Points:

• The solution enables wallet integration, card issuing, and merchant acceptance across Mastercard's 150 million global merchant locations

• New partnerships include OKX for card issuance and Nuvei/Circle for merchant settlement in USDC

• The Mastercard Crypto Credential allows crypto exchange users to send and receive digital assets using simple usernames instead of complex addresses

• Mastercard Multi-Token Network (MTN) enables real-time payments and redemptions for tokenized assets

The Tokenized Take:

• Mainstream adoption acceleration: Mastercard's extensive merchant network provides the scale needed to transform stablecoins from crypto trading tools to everyday payment utilities

• Complete transaction cycle: By enabling both consumer spending and merchant settlement in stablecoins, Mastercard is creating a closed-loop system that reduces friction and conversion costs

2025 is the Year of Stablecoins: This is another stablecoin announcement from one of the largest payment companies in the world, and we are less than halfway through the year

📰 Some More News:

🏦 Tokenization & Finance

• Citigroup predicts stablecoin supply could hit $3.7 trillion (Read more)

• Stripe launches new beta product for US dollar access (Read more)

• Brale becomes the first permissioned US minter for the M0 ecosystem (Read more)

• Chamath Palihapitiya’s deep dive on stablecoins (Read more)

💼 Government & Policy

• Swiss National Bank Rejects Calls to Add Bitcoin Reserves (Read more here)

• The Federal Reserve updates stablecoin and crypto guidance for banks (Read more)

💸 Stablecorner ⚖️ → The Rise of Yield-Bearing Stablecoins: PYUSD Joins the Competition

The stablecoin landscape is experiencing a significant shift as major players introduce yield features to drive adoption. PayPal recently announced it will offer a 3.7% annual yield on its PayPal USD (PYUSD) stablecoin, with rewards accruing daily and paid monthly to users holding the token in PayPal and Venmo wallets.

As Rob Hadick from Dragonfly discussed on the Tokenized podcast, stablecoins are evolving beyond simply serving as trading pairs on exchanges:

"We are probably at the most interesting time for stablecoins in terms of now coming mainstream... I think it's really been the last 15 to 18 months that we started to see stablecoins used in things like actual payments, not just in DeFi as trading pairs."

This trend toward payment-focused stablecoins is accelerating, but competition is simultaneously intensifying. PayPal's yield offering is a clear move to differentiate PYUSD in a crowded market dominated by giants like Tether, whose USDT has a market capitalization of $143 billion compared to PYUSD's relatively modest $868 million.

The PYUSD yield announcement comes alongside an expanded partnership between PayPal and Coinbase that will enable 1:1 PYUSD to USD conversions with no platform fees, collaboration on payment activities, and exploration of new DeFi use cases. PayPal CEO Alex Chriss emphasized that "stablecoins offer a chance to reshape the economics of the payment landscape."

However, as Elise Soucie Watts noted on Tokenized, yield-bearing stablecoins raise important regulatory considerations:

"Regulators have historically viewed a yield-bearing instrument as an investment product, not as a payment instrument. And so you kind of could cross into this complex territory here. And in a lot of jurisdictions, they have said that they will not permit stablecoins to be yield-bearing."

This regulatory nuance is critical, as Rob Hadick explained the current legal approach many issuers are taking: "The legal opinions that all of these issuers are getting today is that if you share a portion of your revenue with your end user as a form of a reward, then that's fine."

The current bills being considered in the US Congress, including the Genius Act and the Stable Act, contain provisions that could impact yield-bearing stablecoins, potentially defining payment stablecoins as those that don't pay yield. The question becomes what exactly constitutes "paying yield" - whether it includes payments to distributors, consumers, or how these arrangements are structured (as yield versus marketing agreements).

For PayPal, this yield strategy addresses multiple business challenges. As Hadick noted, "If you looked at their Q4 earnings report, one of the things they talked about a lot was we need to figure out how to monetize Venmo better. Venmo is 70% of their transaction volume. It's 5% of their revenue." PYUSD could help PayPal monetize idle cash in Venmo while encouraging greater stablecoin adoption.

Tweet of the Week 🐤 

From Patrick Hansen

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