The Financial Times has published an interesting article about the rise and the future of stablecoins, and their interaction with and impact on the general global economy and financial market.

According to the author, the digital assets are creeping their way into traditional markets and that is not a good news for global financial stability.

“We are rapidly reaching the point where the crypto ecosystem poses risks to mainstream markets, or what the crypto community would gratingly call TradFi. In fact, it is reaching the most trad market of all, US government debt – the bedrock of the global financial system,” the author says.

So, what is it about stablecoins that make them different than other digital assets such as dog coins or memecoins?

It is the fact that they are linked to or based on a stable currency, in most cases the US dollar. And whilst that brings a degree of trust and stability, it could also mean market chaos if the stablecoin ecosystem itself goes bust.

Also, in the author’s opinion, the fact that stablecoin holders do not always willingly disclose how much in assets they are holding does not help overall trust and market stability.

The article also quotes researchers saying: “If the stablecoin sector continues to grow rapidly, it may eventually affect the pass-through of monetary policy to Treasury yields.”

Bitcoin investment

Japanese hotel development group Metaplanet has announced raising around $5.4 billion to buy more bitcoins. The firm’s market value rose sharply last week after the revelation.

As reported by the FT, the plan is to increase the company’s current stockpile of bitcoin by twenty fold and acquire 210,000 by 2027. That would be 1% of the total supply of bitcoin, and worth around $22 billion.

Metaplanet is generally considered to be “a pioneering public company in Japan with a bold, forward-thinking approach to digital asset investment.”

The company wants to build a BTC treasury as it considers the crypto asset more than just a reserve asset, but as a sort of strategic hedge which protects against inflation and currency devaluation.

According to reports, the company bought its latest reserve of bitcoins “at an average price of 15,182,668 yen (approximately $105,000) per bitcoin, totaling approximately 16.883 billion yen (approximately $117 million).”

US charges crypto entrepreneur

Iurii Gugnin, a Russian crypto entrepreneur and founder of Evita Pay, has been charged by US prosecutors of violating export controls and evading sanctions.

According to a US Department of Justice press release, Gugnin is also known as Iurii Mashukov and George Goognin, is 38 years old and resides in New York.

He has been charged with “various offences related to using his cryptocurrency company Evita to funnel more than $500m of overseas payments through US banks and cryptocurrency exchanges while hiding the source and purpose of the transactions,” according to the press release.

Specific charges include “wire and bank fraud, conspiracy to defraud the United States, violation of the International Emergency Economic Powers Act (IEEPA), operating an unlicensed money transmitting business, failing to implement an effective anti-money-laundering compliance program, failing to file suspicious activity reports, money laundering, and related conspiracy charges.”

John A Eisenberg, Assistant Attorney General for National Security has said, “The Department of Justice will not hesitate to bring to justice those who imperil our national security by enabling our foreign adversaries to sidestep sanctions and export controls.”

Profit for Trump

We have been covering developments around US President Donald Trump’s crypto ventures and his involvement with the crypto exchange World Liberty Financial.

The FT has reported, based on documents published by the US Office of Government Ethics, that the President how now earned around $60m since his backing of and public involvement with the Venture.

The documents show that the President is also earning an income from other sources such as books and property investments, but crypto is among his top-earning ventures at present.

Trump’s public backing and investment in digital assets, including launching his own memecoins, has been criticised by opponents for being a blatant example of conflict of interests.

But the White House has said the President has “completed required ethics briefings and financial reporting obligations,” and that the administration is committed to transparency.

Pay-to-play politics

Speaking of Trump and his crypto ventures, the Democrats have accused the president of “blatant pay-to-play politics” and using the presidential seal for personal gains.

The accusation was made after reports that a tycoon invested $100m in the President’s company weeks after the administration dropped an investigation into his crypto operations.

According to a filling with the US SEC, Don Wilson, founder of DRW Investments, bought nearly 4 million shares in Trump Media & Technology Group in May.

In a brief statement published last week, The Democratic National Committee has said: “The Trump administration dropped a lawsuit against Don Wilson, and soon after, Wilson’s firm invested $100 million into Trump’s bitcoin project. The bottom line: Trump is abusing the presidency for his own personal gain.”

As reported by the FT, the Biden administration had brought a civil complaint against one of Wilson’s companies for acting as an unregistered dealer of crypto assets, but charges have now been dropped by the SEC.