Extended Arc Migration: Settlement Moves From Starknet to Circle’s Arc

Extended Arc Migration: Settlement Moves From Starknet to Circle’s Arc

by | Oct 22, 2026 | Innovation Circle

Extended, a decentralized perpetuals exchange, began moving its settlement layer from Starknet to Arc, the Layer 1 blockchain developed by Circle, on October 22, 2026. The Extended Arc migration started at 13:00 UTC, according to Crypto Briefing.

The shift matters because the platform carries roughly $117.7 million in total value locked, the bulk of it sitting on Starknet, and the exchange says trading will run without interruption throughout the move. For Arc, whose mainnet went live only weeks earlier, landing an established derivatives venue is an early test of its capacity to host high-throughput financial applications.

The migration relocates the infrastructure that settles trades on the exchange while leaving the trading experience itself intact, according to the report. That combination of a live order book and a changing settlement layer is what makes the October 22 switch notable for both the platform's users and its new host chain.

How the Extended Arc migration works

Extended says trading will keep running through the switch, with no interruption to the order book. Deposits and withdrawals, however, will pause for up to two hours while the Extended Arc migration takes place, Crypto Briefing reported.

The exchange expects the majority of participants to come through the migration with balances intact and positions untouched. For most users, no action is required: balances unaffected by the asset changes are set to be shifted into wETH on a one-for-one basis automatically, and holders do not need to complete any paperwork for that to happen.

The near-term to-do list for users is short but non-negotiable, according to the report. Anyone planning to move funds on or off the platform should plan around the two-hour deposit and withdrawal pause that began at 13:00 UTC on October 22, since transfers in either direction will not be processed during that window.

Once the pause lifts, the migration is designed to leave the typical trader in the same position as before, with the settlement layer underneath changed. The exchange's expectation is that most accounts will carry their balances and open positions across the transition without disruption, according to Crypto Briefing.

Deadline for USDT and wBTC holders

USDT and wBTC will not be supported on Arc, which creates a hard deadline for holders of either asset. Users holding USDT or wBTC had until October 21, 2026, the day before the migration, to act.

Those users were given two paths. They could swap their USDT for USDC and their wBTC for cirBTC on a one-for-one basis, or they could pull the assets off the platform entirely. The conversion terms also include a 0.50% premium.

Traders holding meaningful USDT or wBTC balances were advised to check exactly how that premium applies to their holdings before the cutoff, according to Crypto Briefing. The cost of converting could vary depending on the size of the balance, making the calculation worth doing ahead of the deadline rather than after.

The cutoff date of October 21 was set one day ahead of the migration itself, giving the exchange a clean break between the asset transition and the settlement switch. Users who missed that window faced the consequences of holding assets that the new chain does not recognize.

Why Extended chose Circle's Arc

According to the exchange, the goals behind the move center on quicker performance, delivered through finality of less than a second, and on transaction fees denominated in stablecoins. Extended has also presented the migration as a route to deeper ties with institutional investors, and the predictability of those fees is part of what it believes will appeal to that audience.

Arc is Circle's own blockchain. The network's mainnet went live on September 16, 2026, and the group of founding validators named at launch includes BlackRock and Visa, according to Crypto Briefing.

The asset changes align the exchange with its new host chain. Because USDC is the flagship stablecoin issued by Circle, moving stablecoin balances out of USDT and into USDC fits Arc's native ecosystem. By settling on a network operated by one stablecoin issuer, where USDC serves as the standard dollar asset, Extended ends up more tightly bound to Circle's ecosystem than it was on Starknet.

That closer relationship cuts both ways. The exchange gains the performance and fee structure it says it wants, but it also places its settlement infrastructure within an ecosystem defined by a single issuer's product, a degree of alignment it did not have before the move.

What the move means for Arc

For Arc, securing an established perpetuals exchange only weeks after its mainnet debut amounts to a helpful early indicator of traction. A derivatives platform arriving with roughly $117.7 million in total value locked hands the young network a functioning, high-throughput use case it can point to as evidence of demand.

For Extended, the operational challenge is substantial. Relocating a nine-figure pool between settlement layers while the order book stays live amounts to a meaningful test of the exchange's infrastructure and of Arc's readiness to support it.

The outcome will be watched as a measure of whether a chain backed by a major stablecoin issuer, and validated at launch by firms such as BlackRock and Visa, can absorb real derivatives flow without incident. A smooth transition would give Arc a working reference case; any disruption would fall on an exchange whose users were told their positions would be untouched.

Conclusion

The Extended Arc migration began on October 22, 2026, at 13:00 UTC, moving settlement off Starknet while keeping trading live and pausing deposits and withdrawals for up to two hours. The exchange brings roughly $117.7 million in total value locked to a chain whose mainnet launched on September 16 with BlackRock and Visa among its founding validators. The immediate next step for users holding USDT or wBTC was to convert or withdraw by the October 21 deadline, since neither asset is supported on Arc.

Frequently Asked Questions

When did Extended migrate from Starknet to Arc?

The migration began on October 22, 2026, at 13:00 UTC. Extended said trading would run without interruption, though deposits and withdrawals paused for up to two hours during the move.

What happens to USDT and wBTC on Extended after the Arc migration?

USDT and wBTC are not supported on Arc. Holders had until October 21, 2026, to swap USDT for USDC and wBTC for cirBTC on a one-for-one basis, with a 0.50% premium, or to withdraw the assets from the platform.

How much total value locked does Extended bring to Arc?

Extended carries roughly $117.7 million in total value locked, with the bulk of it previously sitting on Starknet. The migration gives Arc a working, high-throughput derivatives use case within weeks of its mainnet debut.

What is Circle's Arc blockchain?

Arc is a Layer 1 blockchain developed by Circle, the issuer of the USDC stablecoin. The network's mainnet went live on September 16, 2026, and BlackRock and Visa were named among its founding validators.

Why is Extended moving its settlement layer to Arc?

Extended cites faster performance through sub-second finality and stablecoin-denominated transaction fees. It has also framed the move as a way to build deeper connections with institutional investors, drawn in part by predictable fees.

Sources

Circle CEO Digital Dollars Pitch Shrugs Off Bitcoin Slump for AI Era

Circle CEO Digital Dollars Pitch Shrugs Off Bitcoin Slump for AI Era

by | Oct 22, 2026 | Innovation Circle

Circle CEO digital dollars are the focus for Jeremy Allaire, who brushed aside questions about Bitcoin's underperformance this year, telling CNBC his attention is on dollar-pegged tokens designed for an economy where autonomous software handles transactions. In an interview reported by Yahoo Finance, Allaire framed his company's mission around financial plumbing rather than the trading swings of digital commodities.

The comments arrive as the Office of the Comptroller of the Currency puts finishing touches on regulations tied to the GENIUS Act, legislation passed in 2025 that governs tokens pegged to the dollar. Allaire said the regulatory work validates his sector's place in the financial system, even as other corners of crypto continue to face questions.

Allaire Dismisses Bitcoin Price Focus

CNBC's Seema Mody pressed Allaire on why Bitcoin has lagged this year if crypto represents the future of finance. Allaire rejected the premise that price action should drive the conversation about the technology's utility, making clear he views speculative trading as separate from the infrastructure Circle is building.

"I don't pay much attention specifically to like these sort of specific digital commodities, how they're trading, etc.," Allaire said, according to the interview. He positioned dollar-pegged tokens as instruments for moving money, extending credit and allocating capital, not as assets for betting on price appreciation.

Because these tokens are engineered to maintain a one-to-one peg with the dollar, their value does not rise and fall with Bitcoin's volatility. Allaire highlighted increasing usage of networks like Arc, a blockchain Circle debuted in September, as evidence of momentum behind his vision for programmable money that operates independently of crypto market cycles.

AI Agents and Machine-Built Blockchains

Allaire's broader argument rests on the rise of AI agents, software capable of completing tasks without human direction that he expects will handle a growing share of economic transactions. He contends this transition will generate need for dollar-denominated tokens and blockchains designed for machine use, the systems Circle develops.

He provided no data to quantify that anticipated demand during the interview. The pitch positions Circle's products as the underlying rails for an automated economy rather than instruments for traders chasing returns in volatile markets.

The distinction matters for Circle's business model. While Bitcoin's price swings dominate headlines and drive trading volume on exchanges, Allaire is betting that the real growth lies in software programs that need to settle payments, move funds between accounts and execute financial contracts without human intervention.

GENIUS Act Rules Take Shape

Allaire said the OCC's proposed regulations have direct implications for Circle, which issues USD Coin (USDC). According to Orrick, the draft rules would mandate that issuers hold reserves matching or exceeding the value of tokens in circulation and honor redemptions at face value within two business days.

The proposal would also prohibit issuers from offering interest to token holders. Allaire said the legislation is insulated from midterm political shifts because it attracted support from both parties, though the vote counts reveal a more divided picture than his characterization suggests.

Eighteen Senate Democrats voted for the GENIUS Act in 2025. In the House, Democrats were divided 102 to 110 when the bill came up for final passage, a narrow margin that underscores the fragility of the coalition Allaire described as bipartisan protection against future political headwinds.

Congress's broader effort to establish market structure rules for crypto, known as the CLARITY Act, stalled in the Senate and never became law. The contrast between the two bills highlights how stablecoins have achieved regulatory clarity while the wider crypto industry continues to operate without a comprehensive federal framework.

Banks Enter the Stablecoin Race

Competition is intensifying just as the regulatory picture comes into focus. Traditional banks have moved quickly to enter the stablecoin market, and 21 institutions have committed to launching a joint issuer, according to the report.

The sector now faces a dual reality: federal oversight is arriving at the same moment as a wave of new rivals from mainstream finance. Allaire's wager is that dollar tokens built for AI-powered transactions will prove more durable than the speculative cycles that drive coverage of Bitcoin and other digital assets.

The entry of established banks into the market could test Circle's first-mover advantage. While the company has operated USDC for years and built relationships across crypto and fintech, the joint issuer backed by 21 institutions represents a coordinated challenge from the traditional financial sector that Allaire has argued will eventually adopt blockchain-based money.

Conclusion

Allaire's message to CNBC was consistent: Circle is not in the business of tracking Bitcoin's price. The company is building dollar-pegged tokens for payments, lending and a future where AI agents execute transactions on blockchains designed for machines. The OCC's final rules for the GENIUS Act will shape how that business operates, setting reserve and redemption standards while barring interest payments to holders. Whether the bipartisan coalition that passed the law holds through the midterms, and whether banks launching rival tokens erode Circle's position, are the next concrete tests for Allaire's vision.

Frequently Asked Questions

What did Circle CEO Jeremy Allaire say about Bitcoin's slump?

Allaire told CNBC he does not pay much attention to how specific digital commodities trade. He said his focus is on dollar-pegged tokens for payments, lending and a future where AI software moves money, according to Yahoo Finance.

What are the OCC's proposed rules for the GENIUS Act?

The OCC proposal would require stablecoin issuers to hold reserves at least equal to outstanding tokens and to redeem them at par within two business days, according to Orrick. The rules would also bar issuers from paying holders interest.

How did Democrats vote on the GENIUS Act in 2025?

Eighteen Senate Democrats backed the GENIUS Act in 2025. House Democrats split 102 to 110 on final passage, according to Yahoo Finance.

What is Circle's Arc blockchain?

Arc is a blockchain Circle launched in September. Allaire pointed to growing activity on Arc and similar networks as part of his pitch for dollar tokens and machine-built infrastructure designed for AI-driven economic activity.

Are banks competing with Circle in stablecoins?

Yes. Banks have moved into stablecoins, and 21 institutions have committed to a joint issuer, according to Yahoo Finance. The competition arrives as federal rules for the sector take shape under the GENIUS Act.

Sources

Circle Expands Into 40 Emerging Markets as Stablecoin Demand Grows

Circle Expands Into 40 Emerging Markets as Stablecoin Demand Grows

by | Oct 19, 2026 | Adoption

Circle is preparing to expand into about 40 emerging and developing countries, chief executive Jeremy Allaire told Reuters, as the company positions itself for a broader phase of stablecoin adoption.

The move matters because Circle ranks as the largest regulated stablecoin issuer globally, with roughly a quarter of the market, giving its international push direct implications for the reach of USDC and for Circle's stock story.

Allaire made the comments during the IMF and World Bank meetings in Bangkok, where he described blockchain as moving out of the early adopter phase and into mainstream scaling.

Why Circle Is Targeting Emerging Markets

Allaire linked the expansion to rising demand across Southeast Asia, Latin America, Africa and the Middle East, where businesses and individuals are seeking ways to take part in an internet-based economy.

He also said stablecoin adoption is happening mostly outside the United States, underscoring why the company is looking abroad for its next stage of growth.

The company's strategy reflects a wider pattern in stablecoin use, with demand increasingly coming from payments and financial infrastructure needs rather than only from crypto-native users.

In that context, Circle appears to be treating stablecoins less as a niche settlement tool and more as an entry point into mainstream transactions, particularly in places where local banking and payment systems may be less flexible.

A broader presence across multiple markets could make it easier for regional partners to build compliant stablecoin services, though it depends on regulatory and banking integration remaining workable in each jurisdiction.

Payments Push and the Tazapay Deal

Circle's geographic ambition is being paired with a targeted expansion in payments infrastructure.

As part of that effort, Circle struck a deal to buy Tazapay, a Singapore-based cross-border payments platform, in an all-stock transaction valued at $400 million that is expected to close in 2027, Cointelegraph reported.

If completed, the acquisition would fit Circle's effort to scale beyond early adopters and deepen its presence in cross-border payments.

Cross-border payments are a natural proving ground for stablecoins because they demand speed, transparency and predictable settlement, characteristics dollar stablecoins are designed to provide.

Still, integration and regulatory alignment are likely to determine whether the acquisition accelerates usage in the targeted regions, and a deal's headline value does not automatically translate into faster adoption unless the acquired platform can expand its partner base, satisfy compliance requirements and cut costs enough to make customers choose stablecoin settlement over traditional alternatives.

The practical question for investors and operators is whether this broader footprint will produce sustained usage rather than one-off pilots.

USDC Usage and Market Position

Circle earns income from the reserves behind USDC, so growth in circulation and usage remains central to the business.

USDC circulation reached $73.3 billion in the second quarter, up 19% from a year earlier.

By market capitalization, USDC still trails Tether's USDt as the second-biggest dollar-backed stablecoin, but Bernstein said it has made substantial gains in transaction activity.

Bernstein's analysis, cited by Cointelegraph, found that USDC's share of adjusted stablecoin transaction volume climbed from roughly 40% in 2025 to above 60% so far in 2026, moving ahead of USDt on that measure.

That matters because transaction volume is often used as a proxy for how actively stablecoins are moving across exchanges, payment rails and settlement flows, while market capitalization can reflect price and liquidity.

Sustained gains in transaction share can indicate real adoption by payment service providers and market participants, though readers should watch how adjusted volume is defined and whether the shift reflects broader usage or a change in where activity is routed.

Arc, AI Payments and Revenue Beyond Reserves

Circle's Arc system has been adopted by firms including BlackRock, Visa and Standard Chartered.

On an earnings AMA, Allaire said Arc's public Mainnet launches on September 16 and said AI agents are driving use.

Those AI agents are being used to carry out very small payments, frequently amounting to fractions of a cent, in exchange for web research and data.

Bernstein analysts also highlighted early signs of stablecoin usage tied to payments executed by AI agents, and if automated systems increasingly need programmable, low-volatility settlement assets, dollar stablecoins like USDC could become a default bridge currency for certain workflows, though the durability and scale of that activity beyond early experiments remains uncertain.

Allaire has also said Circle is building other revenue lines beyond reserve income, including its payments network and Arc.

Regulation, Competition and What Comes Next

In July, Circle secured a federal bank charter, placing it among the first stablecoin issuers to do so.

The U.S. Genius Act is set to take effect in January, and Allaire described it as a watershed moment on the grounds that the world will have legal digital dollars.

At the same time, banks in the United States and Europe are developing their own stablecoins, adding competitive pressure as Circle expands abroad.

Allaire said he views that trend as a sign of a healthy market, even as Tether continues to hold a much larger share of the market.

That gap matters for Circle stock as it expands, especially with the shares down 23% over the last six months.

Bernstein analysts have turned bullish on Circle and anticipate a new growth cycle for USDC over the next 12 months, pointing to renewed momentum in broader crypto markets, improving U.S. regulatory clarity, the growth of tokenized capital markets and a wider role for stablecoins in payments.

Circle's next steps will likely depend on whether its market expansion and payments strategy translate into sustained USDC usage, and for the rest of 2026 and into 2027 investors should monitor regulatory developments affecting stablecoins alongside concrete evidence that transaction share growth holds up across regions and partners.

Conclusion

Circle is set on a much wider international buildout, with roughly 40 developing markets in its sights and a payments acquisition that could support that push. The company enters that next phase with a large regulated position in stablecoins, rising USDC circulation and new infrastructure such as Arc, but it still trails Tether in overall market share. The next concrete milestones are the Genius Act taking effect in January and the expected closing of the Tazapay deal in 2027.

Frequently Asked Questions

How many emerging markets is Circle planning to enter?

Circle is preparing to expand into about 40 emerging and developing countries, according to CEO Jeremy Allaire. He told Reuters the company is positioning for broader stablecoin adoption as demand grows outside the United States.

Why is Circle expanding into Southeast Asia, Latin America, Africa and the Middle East?

Allaire said demand is rising in those regions as individuals and businesses look for ways to participate in an internet-based economy. The expansion also reflects growing stablecoin use in payments and financial infrastructure, not just among crypto-native users.

What is Circle's Tazapay acquisition and when will it close?

Circle agreed to buy Singapore-based cross-border payments platform Tazapay in a $400 million all-stock deal, Cointelegraph reported. The transaction is expected to close in 2027 and would support Circle's broader payments expansion.

How large is USDC circulation now?

USDC circulation reached $73.3 billion in the second quarter, up 19% from a year earlier. Circle earns income from the reserves behind USDC, making circulation growth important to its business.

How does USDC compare with Tether in 2026?

USDC remains behind Tether's USDt in market capitalization, but Bernstein said USDC has gained sharply in transaction activity. Its share of adjusted stablecoin transaction volume rose from about 40% in 2025 to more than 60% so far in 2026.

Sources

BIS Paper Finds Banks Can Slow Stablecoin Adoption by Raising Deposit Rates

BIS Paper Finds Banks Can Slow Stablecoin Adoption by Raising Deposit Rates

by | Oct 19, 2026 | Adoption

Banks may already hold a counterweight against stablecoins such as USDT and USDC: the interest paid on an ordinary savings account. That is the conclusion of a working paper released by the Bank for International Settlements on October 13, 2026, titled "Are stablecoins and bank deposits substitutes?" and issued as BIS Working Paper 1382 by Rashad Ahmed and Iñaki Aldasoro, according to Crypto Briefing.

The finding matters because it reframes the contest between banks and stablecoins as a pricing problem rather than a technology race. Reserve-backed stablecoins function as partial stand-ins for conventional deposits, the paper concludes, meaning the two products compete for the same pool of money, and that deposit pricing gives banks a degree of control over how quickly stablecoins spread.

What the Stablecoin Adoption Data Shows

The study drew on weekly U.S. figures covering January 2019 to June 2025. Aldasoro, a BIS economist, and Ahmed, of the Andersen Institute for Finance and Economics, determined that stablecoin expansion decelerates whenever banks lift what they pay depositors. That window covers a dramatic stretch for the sector, with stablecoin market capitalization climbing from less than $5 billion to more than $220 billion, Crypto Briefing reported.

Across the sample, stablecoin market cap grew roughly 15% over a typical 10-week stretch, the baseline against which the rest of the findings should be read. The central estimate shows that a single basis point added to deposit rates corresponds to about 3 percentage points shaved off stablecoin market cap growth across a 10-week span. A basis point is one hundredth of a percentage point, and the 3 percentage point figure comes from the authors' ordinary least squares estimates, Crypto Briefing reported.

Using instrumental variables estimates instead, the measured effect rises to about 9 percentage points. Decrypt and kucoin framed the same result in growth terms: a one-basis-point rise in deposit rates, sizable for savings rates that typically move slowly, trimmed average ten-week growth from about 15% to roughly 12% under the baseline estimate, and to about 6% under a second method designed to isolate cause and effect. In both cases, growth slowed but did not reverse, CryptoNews reported.

USDC More Exposed Than USDT

USDC absorbed the heavier blow, losing roughly 4.8 percentage points of growth for every basis point added to deposit rates, according to Crypto Briefing. USDT, by comparison, showed a reaction of 1.9 percentage points.

The authors attributed the difference to USDC's closer ties to U.S. users, a pattern they said was consistent with Circle's USDC being more integrated with the domestic banking system. The relationship was stronger for Circle's USDC than Tether's USDT, Decrypt and CryptoNews reported.

The pattern extended beyond tokens sitting in wallets. Stablecoins supplied to decentralized finance protocols showed the same sensitivity, while non-stablecoin crypto assets displayed no comparable response, with bank deposit rates having no significant effect on them, Crypto Briefing reported.

The 3% Threshold and the Rate Environment

The wider interest-rate backdrop adds another layer to the results. Above a federal funds rate of roughly 3%, the authors identified a nonlinear effect, Crypto Briefing reported. Savings rates barely move until the policy rate crosses about 3%, after which banks reprice them far more quickly, according to Decrypt and kucoin.

Near-zero rates leave depositors and stablecoin holders earning essentially the same thing: nothing. As rates climb, the spread between a yield-bearing deposit and a token that pays nothing grows too wide to dismiss, Crypto Briefing reported. The authors used that pattern in bank behavior to distinguish causation from coincidence, according to kucoin.

The sample stretches from the era of rock-bottom rates through the subsequent tightening cycle, a stretch during which the stablecoin sector expanded more than fortyfold. The research summary describes the mechanism as a pricing channel through which the banking industry can influence stablecoin demand, Crypto Briefing reported.

GENIUS Act Limits Issuer Response

The dynamic is now being codified into law. President Donald Trump signed the GENIUS Act in July of last year, a measure that effectively made stablecoins legal in the United States and laid down rules governing how they are issued, used and held in custody, according to Decrypt and kucoin.

The law includes a specific provision in Section 4(a)(11) stating that no permitted payment stablecoin issuer or foreign payment stablecoin issuer shall pay holders any form of interest or yield solely in connection with holding, using, or retaining a payment stablecoin, Forkast News reported. The rules take effect January 18, 2027, leaving issuers unable to match bank deposit rates head-on.

The prohibition applies only to the issuers themselves. Crypto exchanges and third-party platforms remain free to pay interest on stablecoins held on their platforms, creating a bifurcated market where the yield is decoupled from the underlying asset's issuance, Forkast News reported. Meanwhile, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation and the Treasury are writing rules to implement the GENIUS Act, according to kucoin.

Limits of the Research and What Comes Next

The BIS authors are explicit about the limits of what they can claim: the work does not establish losses of deposits or lending, and its sample covers a single high-rate episode, so the findings describe one rate cycle rather than a law of the market, according to CryptoNews and Forex Crunch. Working papers reflect the authors' views, not necessarily the BIS's, and the sample spans a single high-rate cycle in which stablecoins paid holders no interest, Decrypt and kucoin reported.

The authors said regulators should weigh whether stablecoin issuers may pay holders yield, along with the trade-offs of requiring issuers to keep part of their reserves in bank deposits, according to Decrypt and kucoin. Banks have lobbied to prohibit stablecoin yield, and the dispute was prominent during the Clarity Act's failed Senate vote, kucoin reported.

The scale of the potential substitution has been flagged before. Bank of America CEO Brian Moynihan warned in January that as much as $6 trillion in deposits could move into stablecoins and related products offering returns, potentially reducing lending capacity and raising borrowing costs, according to CryptoNews and Forex Crunch. A December Federal Reserve staff analysis explained that money placed in stablecoins can return to banks as issuer deposits, changing who supplies banks' funding even when total deposits remain unchanged, CryptoNews reported.

For policymakers, the research summary notes that stablecoin adoption may be closely linked to the interest rates banks offer savers, and that the relationship carries implications for both monetary policy and regulation, Crypto Briefing reported. The next datapoint is the deposit-rate response: how quickly banks in major markets reprice savings products as policy rates shift, and whether stablecoin issuer yields widen or narrow the gap, according to Forex Crunch.

Conclusion

The established finding is narrow but pointed: higher bank deposit rates predict slower stablecoin market growth, the effect is stronger for USDC than USDT, and banks retain influence over adoption through deposit pricing. The paper does not show that stablecoins have reduced bank deposits or lending, and its sample covers one high-rate cycle. The next concrete steps are regulatory: the OCC, FDIC and Treasury are writing rules to implement the GENIUS Act ahead of its January 18, 2027 effective date, while the authors say regulators should weigh whether issuers may pay yield and the trade-offs of requiring reserves to sit in bank deposits.

Frequently Asked Questions

What did BIS Working Paper 1382 find about stablecoins and bank deposits?

The paper, published October 13, 2026 by Rashad Ahmed and Iñaki Aldasoro, found that stablecoins and bank deposits behave as partial substitutes. A 1 basis point rise in U.S. deposit rates lined up with roughly 3 percentage points less stablecoin market cap growth over 10 weeks, and about 9 points under instrumental variables estimates.

Why is USDC more sensitive to deposit rate increases than USDT?

USDC lost about 4.8 percentage points of growth per basis point of deposit repricing, versus 1.9 points for USDT. The authors attributed the gap to USDC's closer ties to U.S. users and institutions, suggesting the more integrated a stablecoin is with the domestic banking system, the more sensitive it is to that system's yields.

How does the GENIUS Act affect stablecoin issuers' ability to compete with banks?

Section 4(a)(11) of the GENIUS Act, signed in July 2025 and effective January 18, 2027, bars permitted payment stablecoin issuers from paying holders any interest or yield for holding their tokens. Exchanges and third-party platforms remain free to pay interest on stablecoins held on their platforms.

Does the BIS paper prove stablecoins drain bank deposits or lending?

No. The authors state the work does not establish losses of deposits or lending, only a correlation in growth patterns. The sample covers a single high-rate episode between 2019 and 2025 in which stablecoins paid holders no interest, so the findings describe one rate cycle rather than a permanent law.

What did Bank of America CEO Brian Moynihan warn about stablecoins?

Moynihan warned in January that as much as $6 trillion in deposits could move into stablecoins and related products offering returns, potentially reducing banks' lending capacity and raising borrowing costs. The BIS paper suggests that outcome is not fixed if banks reprice deposits competitively.

Sources

Binance Increases USDC Holdings As BUSD’s Market Cap Slides Lower

Binance Increases USDC Holdings As BUSD’s Market Cap Slides Lower

by | Mar 4, 2023 | Binance, Market, Market News

Binance, one of the most popular cryptocurrency exchanges, and Ingenico, a leading payment processor, have joined forces to provide customers in France convenient options for making payments using digital assets. Binance Pay users will soon be able to make cryptocurrency purchases at two establishments using Ingenico's POS system: the bar La Carlie and the boutique Miss Opéra.

The release says that more than 50 different digital currencies are welcome in the scheme. At first, merchants will only accept cryptocurrency payments; however, a crypto-to-fiat solution that will allow them to accept fiat currency payments is scheduled for pilot in the second quarter of 2023.

Also Read: Binance Announces Users Can Now Buy Crypto Using Apple Pay and Google Pay

Binance plans to expand its services to additional European nations in the near future. Several European countries have given Binance their blessing, including France, Italy, Lithuania, Spain, Cyprus, Poland, and Sweden. In-store terminals don't often support cryptocurrency usage without integration. Two French retailers, Le Carlie and Miss Opéra, are going live as part of the experimental programme in France.

On February 20th, the cryptocurrency trading platform revealed that the crypto giant had introduced a paid technology platform card in Brazil in partnership with payment giant Mastercard. Bitcoin, Ether, and BUSD are just a few of the 13 cryptocurrencies that may be used with the card. It will be made accessible to all Binance users in Brazil with a valid national ID.

The new device, which is supposed to be a "all-in-one," will streamline the onboarding process for both businesses and customers. All Binance users in Brazil with a valid national ID will get access to the card, which will allow them to make purchases and pay bills using a total of 13 different cryptocurrencies.

USDC Holdings

Companies can gain a fresh perspective on the market thanks to this relationship. As the head of Binance Card and Binance Pay, Jonathan Lim, explained, "their market dominance and new payment solutions allow us to speed our access to consumers without having to construct our own terminals or software."

The company has announced that the Binance card would have a 0.9% fee for each cryptocurrency transaction, as well as up to 8% rewards with cryptocurrency and free ATM withdrawals. The company announced that its Binance card would charge 0.9% for cryptocurrency transactions, provide up to 8% cashback in cryptocurrency, and provide free ATM withdrawals.

Martin Lee, a data journalist for Nansen, reports that USDC holdings on Binance have increased week over week. Lee tweeted on Tuesday, "Interesting to watch the number of USDC on Binance climb so much since the BUSD news." Lee went on to say that in the past week, USDC on Binance increased by $1.5 billion. Unless its market capitalization falls below DAI's $5 billion, the Paxos-managed stablecoin will remain the third largest stablecoin.

Once a major player in the top ten crypto assets by market capitalization, BUSD is dangerously close to falling out of the top 10 altogether. He said that, "considering that you can't trade using USDC" on Binance, he would have anticipated a greater growth in the supply of tether (USDT) than USDC.

The Nansen analyst also pointed out that the USDC balance in Binance's main wallet is at an all-time high of $1.8 billion today, the highest level seen in the past 90 days. A total of $1.821 billion USDC is stored in Binance's wallet as of 2:00 PM (ET) on February 21, 2023. Binance stopped supporting USD Coin (USDC) trading pairs on September 5, 2022, and converted all customer USDC holdings to BUSD. As of today, the quantity of BUSD that have been taken from circulation since Paxos said it will no longer mint BUSD stands at 3.55 billion, according to reports in the news.

Also Read: Binance News: Crypto Exchange Has Good News For TRON Users

Binance stores just over 100 million Tether (USDT) in the same wallet, however Nansen's portfolio viewer only displays ERC20-based balances. Tokens worth 5.34 million DAI and 79.24 million TUSD are also stored in the Binance wallet. Two weeks after Binance's decision, Wazirx followed suit by automatically converting USDC and other stablecoin balances to BUSD.

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