Visa and Bridge Launch Stablecoin Cards in 100 Markets

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Introduction

Welcome to the Tokenized newsletter, brought to you by the creators of the Tokenized Podcast. Written by Simon Taylor of Fintech Brainfood 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. 

In This Week's Edition:

📣 Simon's Market Readout: Visa and Bridge launch cards in 100 markets, Morgan Stanley files for a national trust charter, and Kraken secures a skinny master account

🚀 Stories You Can't Miss: Circle Nanopayments, Northern Trust joins BNY’s LiquidityDirect, and PayPal launches PYUSDx

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Simon’s Market Readout 💬 

In the past few days, we've seen Visa partner with Bridge to expand cards in 100 markets. We've seen Morgan Stanley apply for a national trust charter, and we've seen Kraken get its approval from the Kansas Fed for a so-called skinny master account.

While the debate over the final yield tax rumbles on, the OCC is putting together its rule for stablecoins. The Clarity Act looks like it's finally getting there, and the last bits of posturing are being done. I think there is a deal to be done there, and we will get over the line with this.

There's an increasing sense that regulatory clarity is coming — we just don't know exactly what form it will take. But you can see it in the wave of national trust charters. You can see it in the expansion from Bridge and Visa. Things have materially changed.

Here's what matters:

1. Morgan Stanley is positioning for digital capital markets plumbing. They're now set up to offer stablecoin clearing and settlement in a way that traditionally a transaction bank or a correspondent bank might for traditional payments rails. This puts them in a fascinating position as capital markets start to go digital — and gives them a potential leg up into a range of services that are very much in the emerging space.

2. For entrepreneurs, the Visa-Bridge partnership may be the most consequential development this week. The ability to issue a card in 100 different markets through a single API — I cannot tell you the amount of pain that you would have had to go through in the past to do that. You would have had to go country by country, regulator by regulator, bank by bank, building individual partnerships to get it done. To be able to do that with a single API, with stablecoins, is the beginnings of something genuinely default global.

3. Stablecoins are moving from dial-up to broadband. We're shifting from a stage where, okay yeah, it's global, but only for some of the cases, some of the time — but it's not really global, is it? You could still use traditional FX and it's still cheaper. But we're in a phase now where stablecoins are genuinely better in many cases than any competing alternative. That's going to be a phase shift that we're only at the beginning of.

Keep your eye on this one.

Stories You Can't Miss 📰

🚀 Circle Launches Nanopayments: Visa for Machines

Circle just put a new product on testnet that does something traditional financial rails literally cannot do: move $0.000001 with zero gas fees. Nanopayments, built on Circle Gateway, is now in private beta for developers building AI agent systems and streaming payment.

To make the concept tangible, Circle partnered with OpenMind to build a demo where a robot dog named "Bits" autonomously paid for its own recharging using USDC - no human in the loop.

Key Points:

• Sub-cent USDC transfers are now possible, down to $0.000001, with zero gas fees. Transfers clear on Circle Gateway's off-chain ledger - there's no onchain transaction at the moment of transfer, so there's no gas to pay. Onchain settlement happens later in batches.

• The architecture is an off-chain ledger with on-chain anchoring. Both buyer and seller hold balances within Gateway. Transfers happen instantly on Circle's internal ledger, then settle to chain periodically in batches.

• Demand already exists. According to analysts, USDC transfers at the sub-micropayment level surged from 2.2 million to 47 million in 2025  (a 21x increase) concentrated on Polygon and Base, before any dedicated product existed.

• Coinbase shipped Agentic Wallets a few weeks earlier (February 11), targeting the same agentic economy but at a different layer - wallet infrastructure and agent identity rather than settlement.

The Tokenized Take:

Let's have a look at what Circle actually built here.

"Zero gas" isn't really a feature. It's a consequence of the architecture. Nanopayments doesn't reduce gas costs or subsidize them - it eliminates the chain from the transfer layer entirely. When Agent A pays Agent B, that transfer clears instantly on Circle's own off-chain ledger. Onchain settlement happens later, in batches. There is no gas because there is no chain at the moment of transfer.

That means the honest comparison here isn't an L2 or an L3. It's closer to how Visa works: transactions clear internally through a closed network, then settle in batches to the underlying rails. And for this specific use case, that tradeoff is probably right. An AI agent paying $0.000001 for an API call does not need trustless, cryptographically-verified settlement. It needs speed, cost efficiency, and deterministic pricing. The threat model for a fraction-of-a-cent machine payment is fundamentally different from a $50M DeFi swap. So Circle made the pragmatic call - closed-loop network with onchain exit ramps. Fast inside the network, verifiable when you leave it.

What makes this credible is who is running the ledger. Circle, as the regulated issuer of USDC, carries a level of counterparty trust that a random infrastructure provider cannot. And the Gateway balance requirement - both parties must hold funds inside Circle's ecosystem - creates a classic network-effects moat. Once agents and services hold Gateway balances, switching costs compound. Circle isn't just building a payment rail. They're positioning themselves as the default settlement layer for agentic commerce, using their unique issuer status to lock in a competitive advantage that pure infrastructure players can't replicate.

Now, let’s zoom out - Nanopayments fits perfectly into the broader Circle infrastructure pivot we've been tracking across multiple editions of this newsletter. From xReserve to CCTP to Arc, Circle has been slowly building out the plumbing layers beneath USDC. Nanopayments extends that logic: if you're going to own the stablecoin, own the settlement layer for every type of commerce that stablecoin can power - including commerce between machines.

The competitive timing with Coinbase is also fascinating. Both companies clearly see the agentic economy as the next major payments frontier, but they're approaching it from opposite ends of the stack. Coinbase built the wallet - agent identity, security guardrails, spending limits, and compliance screening. Circle built the rail - the actual movement of value at granularity that wasn't previously possible. These aren't competing products so much as complementary layers of a two-tier agentic finance stack. The strategic question is whether they stay complementary or start intruding on each other's territory.

All of that said, architecture alone doesn't build a market. Nanopayments is on testnet, not mainnet. The 21x surge in sub-micropayment transfers is a promising demand signal, but 47 million transactions across 2025 is still a rounding error compared to the billions of daily card transactions on traditional rails. The agentic economy this product serves is itself still nascent. The real validation won't come from demos with robot dogs - it will come from sustained, organic volume from production agent systems choosing Gateway over alternatives. 

For enterprise teams evaluating this, the due diligence priorities will be settlement finality windows, custody treatment of Gateway balances, and KYT/AML hooks within the off-chain ledger. The product solves a real gap. The architecture involves real tradeoffs. But it’s still early to say whether this will be a success.

🚀 Northern Trust Enters Tokenized Treasuries - But the Real Story Is the Infrastructure Behind It

Key Points:

• Northern Trust Asset Management ($1.4 trillion AUM) launched a tokenized share class for its NIF Treasury Instruments Portfolio - a $10 billion+ money market fund investing in short-term U.S. Treasuries. The tokenized shares are a "digital mirror record" of the existing institutional share class using blockchain technology.

• The fund is distributed through BNY's LiquidityDirect platform, which runs on Goldman Sachs' Digital Asset Platform (GS DAP). Northern Trust becomes the sixth major asset manager on LiquidityDirect, joining BlackRock, BNY Investments Dreyfus, Federated Hermes, Fidelity Investments, and Goldman Sachs Asset Management, which all launched on the platform in July 2025.

• Northern Trust is the first asset manager to join LiquidityDirect after the initial launch - making it the first pure tenant on the platform rather than a co-developer. The firm's institutional client base consists primarily of corporate and public pension funds, foundations, endowments, insurance companies, and sovereign wealth funds among the most conservative capital allocators globally.

• The broader tokenized U.S. Treasury market has grown from under $1 billion in early 2024 to over $10 billion by Feb 2026, with Circle's USYC and BlackRock's BUIDL leading the market. Northern Trust's co-CIO Chris Roth signaled the move back in October 2025, noting that tokenized securities would "fit seamlessly into investors' lives" as regulations matured.

The Tokenized Take:

Another asset manager tokenizes a money market fund. At this point, that sentence alone won't make anyone look up from their Bloomberg terminal. We've seen BlackRock do it with BUIDL, Franklin Templeton with BENJI, and four others line up on BNY's platform last July. So why does Northern Trust matter?

Because of what's happening underneath.

The real story here isn't Northern Trust - it's BNY's LiquidityDirect quietly becoming the default distribution rail for tokenized institutional liquidity. When BNY and Goldman launched the platform in July 2025, five asset managers came onboard as founding participants. They helped shape the infrastructure. Northern Trust is different. They showed up, plugged in and went live. No co-development. No bespoke integration. Just a new tenant on an existing platform.

That's the shift worth watching BNY has effectively built the "App Store" for tokenized money market funds - the storefront where institutional investors shop for tokenized liquidity products from multiple managers, all running on Goldman's GS DAP as the operating system. Six of the largest asset managers in the world are now listed. So the question is: at what point does not being on LiquidityDirect become a competitive disadvantage? If you're State Street, PIMCO, or Vanguard, this is the kind of thing that lands on your next strategy offsite agenda.

Northern Trust's specific positioning makes this more significant than the headline suggests. Their client base - pensions, endowments, sovereign wealth, foundations - represents some of the most process-driven, compliance-heavy allocators in the world. These are pension trustees with fiduciary obligations and 50-page investment policy statements - not hedge funds experimenting with onchain yield. Northern Trust wouldn't have launched this unless their clients were already asking for it. Paula Kar, their Chief Product Officer, framed it around "improved settlement efficiency and enhanced visibility" - that's pension-board-meeting language, not crypto-conference language. The demand signal is clear.

And here's where it gets interesting from a sizing perspective. If even 5-10% of Northern Trust's liquidity AUM migrates to tokenized share classes over the next two to three years, you're looking at meaningful volume flowing through these rails. But scale will depend entirely on whether demand continues to pull from the client side - this isn't a supply-side story where asset managers build it and hope clients show up. The signal from Northern Trust suggests their clients are already there.

Now zoom out further. The unlock that hasn't fully materialized yet - but is getting closer - is collateral. In September 2025, DBS, Franklin Templeton, and Ripple signed an MoU exploring the use of tokenized MMF shares as collateral for lending and repo trades. Then in December 2025, the CFTC launched a digital assets pilot program and provided guidance, which has opened the door for tokenized fund shares to be used as collateral in derivatives markets. So, instead of selling your MMF position to post margin, you could eventually pledge those tokenized shares directly - keeping your yield while meeting collateral requirements

Northern Trust's pension and endowment clients are among the largest users of derivatives for hedging. They need eligible collateral, constantly. If tokenized MMF shares eventually qualify as margin at clearinghouses, you get a self-reinforcing loop: the same clients holding these instruments for liquidity management can simultaneously use them for collateral optimization - earning yield on what would otherwise sit as idle cash posted against derivative positions.

So here’s where this is heading: Tokenized MMFs started as a cash-parking tool. They're becoming a standard liquidity product. The next phase: becoming core institutional collateral, is what takes this market from $10 billion to multiples of that. 

Northern Trust's entry doesn't create that future, but it adds exactly the type of institutional weight that makes regulators and clearinghouses take it seriously.

🚀 PayPal Opens PYUSD to Third-Party Stablecoin Issuers via MoonPay and M0's PYUSDx

MoonPay, M0 and PayPal have launched PYUSDx - an infrastructure platform that lets developers create branded, application-specific stablecoins backed by PayPal USD (PYUSD). The first builder on the platform is USD.ai, creating a stablecoin for AI infrastructure.

PayPal isn't launching another stablecoin. They're letting other people launch stablecoins on top of theirs.

Key Points:

• What PYUSDx does: Developers can now launch their own branded stablecoins - fully backed by PYUSD - in days rather than months, using M0's universal stablecoin platform and MoonPay's issuance infrastructure

• The market context: The number of newly issued stablecoins with more than $10 million in supply grew 89% in 2025 alone. Demand for custom stablecoins is accelerating - builders just don't have the infrastructure to spin them up easily

• PYUSD sits at ~$4.2 Billion market cap - meaningful, but still a rounding error next to USDT ($180 billion+) and USDC ($75 billion+). PayPal has not won the direct distribution game.

• The legal separation is deliberate: PYUSDx tokens are not PayPal USD, are not a PayPal product, and cannot be used on PayPal or Venmo. PayPal gets the benefit of supply growth without the regulatory liability of every downstream token.

• M0 raised $40M in 2025 to build exactly this kind of universal stablecoin platform. They've already powered MetaMask USD. PYUSDx is their highest-profile deployment yet.

The Tokenized Take:

Here's what this announcement actually signals: PayPal has conceded the stablecoin market share war. PYUSD has never cracked a meaningful share against USDT/USDC in direct competition. At ~$4.2 billion, it's a distant sixth among regulated US-dollar stablecoins. Rather than continuing to fight for retail adoption head-on, PayPal is pivoting PYUSD from a product to a backing asset. That's a fundamentally different strategic positioning. They're saying: "We don't need to be the stablecoin you hold - we need to be the stablecoin that other stablecoins are built on."

And honestly? It might be the smarter play.

The stablecoin market is now officially bifurcating into two distinct layers. We have the reserve layer - USDT, USDC, PYUSD - stablecoins issued by regulated entities, fully backed, focused on trust and compliance. And now we're watching the emergence of an application layer: branded, purpose-built stablecoins issued by fintechs, gaming platforms, AI companies, and apps - using the reserve layer as their foundation. PYUSDx makes this structural split explicit. Every PYUSDx-minted stablecoin locks up more PYUSD as reserves, growing PayPal's supply footprint without PayPal needing to distribute a single token itself. It's a supply growth multiplier.

MoonPay's pivot here deserves attention. This is no longer a crypto on-ramp company. By moving into issuance and distribution infrastructure, MoonPay is chasing a higher-margin, stickier business. On-ramps are commodity. Issuance platforms create lock-in.

The quiet winner here may be M0. We've written many times about the interoperability challenge - as stablecoins proliferate, the risk of liquidity fragmentation grows.

M0's universal platform is the connective tissue that keeps application-specific stablecoins from becoming siloed dead ends. Cross-chain compatibility, onchain reserve transparency, built-in liquidity - this is the picks-and-shovels infrastructure that the next wave of stablecoin issuance will run on. M0 CEO Luca Prosperi put it directly: "We believe every fintech developer will eventually utilize a solution like PYUSDx". That's a bold claim, but the market dynamics support the direction.

So the question is: does this validate Circle's infrastructure-first strategy? Circle has spent the past year building developer plumbing (Gateway, CCTP, and now Nanopayments). PayPal just took a different approach: rather than building its own platform layer, it's leveraging MoonPay and M0 to turn PYUSD into a white-label reserve. Two competing models for the same goal - becoming the foundation layer other stablecoins build on. 

The stablecoin race is no longer only about "who has the most supply". It's also about "who has the best developer platform."

📰 Some More News:

🏦 Tokenization, Stablecoins & Finance

• Bank of Japan testing blockchain-based reserve settlement for bank deposits in new sandbox (Read more here)

• Tether and Anchorage tap Deloitte for first USAT stablecoin reserve report — $17.6M in reserves backing 17.5M tokens (Read more here)

• DTCC, Clearstream, and Euroclear publish interoperability white paper warning tokenized securities won't scale without common standards (Read more here)

• Ripple expands payments platform into full-stack stablecoin infrastructure, processed volume tops $100B (Read more here)

• SoFi and Mastercard partner to integrate SoFiUSD for global settlement across Mastercard's network (Read more here)

• Sui's native stablecoin goes live via Bridge, with Treasury yield returned to the network (Read more here)

• Backpack taps Superstate for IPO roadshow tokenization, offering direct share ownership on Solana (Read more here)

• Bitfinex revives tokenized bonds on Bitcoin's Liquid Network, future sales expected to exceed $10M (Read more here)

• TD Securities says NYSE tokenization push marks institutional turning point for market structure (Read more here)

• BitGo expands MiCA-compliant crypto-as-a-service across all 30 EEA countries (Read more here)

• Solana stablecoin volume hits record $650B in February as onchain payments draw demand (Read more here)

• Crypto.com launches blended crypto and stock retirement accounts in the US (Read more here)

• Indiana governor signs bill allowing crypto investments in state retirement plans by July 2027 (Read more here)

• RedStone launches Stellar price feeds supporting USDC, PYUSD, and Franklin Templeton's BENJI tokenized fund (Read more here)

🤑 Funding and M&A

• Stablecoin payments startup Cyclops raises $8M from Castle Island Ventures, F-Prime, and Shift4 (Read more here)

• Tether invests $50M in sleep technology startup Eight Sleep at $1.5B valuation (Read more here)

• PayPay (40% owner of Binance Japan, SoftBank-backed) seeks up to $1.1B in Nasdaq IPO at $10B+ valuation (Read more here)

• STS Digital Closes $30M Strategic Round (Read more here)

💼 Government & Policy

• Trump accuses banks of undermining GENIUS Act, urges Congress to pass market structure legislation "ASAP" (Read more here)

• White House crypto adviser Patrick Witt rejects Jamie Dimon's argument that yield-bearing stablecoins should face bank regulation (Read more here)

• FATF flags AML risks from P2P stablecoin transfers, points to freeze and deny-list safeguards (Read more here)

• CFTC chair teases US perpetual futures approval "within the next month or so" (Read more here)

• Senate housing bill advances with provision banning Fed CBDC issuance until 2030, backed by White House (Read more here)

• ECB study warns stablecoins could pose risk to eurozone monetary policy by draining bank deposits (Read more here)

• Innovate Finance delivers stinging response to Bank of England's proposed stablecoin regime, warns of chilling effect on UK market (Read more here)

• Coinbase policy exec urges UK Lords to drop proposed BoE stablecoin caps, allow rewards, and pursue international equivalence (Read more here)

• South Korea moves to cap crypto exchange shareholder stakes at 20% (Read more here)

• CFTC taps former federal prosecutor David Miller to lead enforcement division (Read more here)

• Uniswap wins class action dismissal — judge rules DeFi protocols not liable for third-party misuse (Read more here)

• Australia at risk of missing $17B digital finance opportunity without regulatory sandbox, researchers say (Read more here)

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