Stable News is Lumx’s weekly curation of the key developments in stablecoins, tokenization, and digital payments worldwide.
This edition highlights PayPal’s entry into crypto transfers via messaging, the battle for USDH on Hyperliquid now backed by Paxos and PayPal, Tether’s new U.S.-focused stablecoin, regulatory debates between the U.K. and the U.S., and more.
Reading time: 7 minutes
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→ Payments, Policy, and Power
→ From Circle to Hong Kong: the advance of stablecoins in the digital financial system
→ Stablecoins and On-Chain FX: New structures for liquidity and efficiency
PayPal Opens the Door to Stablecoins in Messaging Transfers
PayPal announced PayPal Links, a new P2P payments solution working inside messaging apps, supporting transfers in Bitcoin, Ethereum, PYUSD, and other tokens.
Initially available in the U.S., with U.K. and Italy rollouts planned later this month, the service will allow users to send and receive cryptocurrencies and stablecoins via personalized links sent by SMS, DM, or email. Beyond convenience, P2P transactions between friends and family will be exempt from 1099-K tax reporting.
The move places digital assets at the core of PayPal’s innovation strategy, following its earlier decision to enable payments in hundreds of crypto assets for small businesses. With the GENIUS Act now in force, PayPal is doubling down on stablecoins and setting the stage to expand PYUSD’s reach.
Why it matters:
✅ PayPal takes a decisive step toward making stablecoins part of everyday payments.
✅ Tax exemption for P2P transfers creates a strong adoption incentive.
✅ Reinforces stablecoins as a strategic pillar in major financial players’ portfolios.
Hyperliquid: USDH Race Gains Momentum with Paxos and PayPal
As reported in last week’s Stable News, Hyperliquid launched a governance process to select the issuer of its native USDH stablecoin, attracting proposals from Paxos, Sky, Agora, Native Markets, and even rumored interest from Stripe via Tempo.
Now, the competition has intensified: Paxos updated its proposal with PayPal’s support, offering HYPE token listing, free ramps, and USDH integration with Venmo and Xoom, plus $20 million in incentives.
The structure ties the issuer’s revenue to the stablecoin’s growth, as Paxos would only generate income once USDH hits specific TVL milestones. Meanwhile, rival proposals remain active, making this one of the most strategic governance contests in the industry.
Why it matters:
✅ PayPal and Venmo integration gives USDH immediate global scale potential.
✅ Incentive structure aligns issuer revenue with ecosystem success.
✅ Illustrates how stablecoins have become critical battlegrounds in financial infrastructure.
Tether Launches USAT to Cement U.S. Presence
Tether announced plans to launch USAT, a stablecoin designed specifically for the U.S. market and fully compliant with the GENIUS Act. It will be issued by Anchorage Digital Bank, with Cantor Fitzgerald handling custody, and headquartered in Charlotte, North Carolina.
This marks Tether’s return to direct U.S. operations after years of staying at arm’s length due to regulatory pressure. With this new setup, the company aims to compete head-on with Circle, which recently went public in the U.S.
The initiative highlights Tether’s push to capture the regulatory legitimacy stablecoins gained under the GENIUS Act, while expanding its footprint in a market still dominated by USDC.
Why it matters:
✅ Marks Tether’s strategic return to the U.S. under clear regulatory frameworks.
✅ Shows how the GENIUS Act is reshaping competition in the sector.
✅ Intensifies the direct rivalry between Tether and Circle in the domestic U.S. market.
Coinbase Pushes Back Against “Deposit Flight” Narrative
Coinbase released a report challenging the notion that stablecoins undermine the U.S. banking system. The exchange argues that the “deposit flight” narrative is a myth, since most stablecoin activity occurs abroad, strengthening the dollar’s global role without materially affecting domestic credit.
The paper also disputes U.S. Treasury projections of potential trillion-dollar deposit losses, pointing out inconsistencies in the data. Moreover, Coinbase highlighted positive correlations between bank stocks and crypto firms after the GENIUS Act passed, suggesting both sectors can thrive together.
Why it matters:
✅ Reinforces stablecoins as payment instruments, not savings substitutes.
✅ Shows that global adoption boosts the dollar’s dominance.
✅ Suggests banking risks may be more political than data-driven.
U.K. Proposes Stablecoin Limits, Sparks Criticism
The Bank of England proposed caps on stablecoin use: £10,000–£20,000 for individuals and up to £10 million for companies. The stated aim is to prevent large deposit outflows and preserve financial stability.
The backlash was swift. Groups like Coinbase called the measure “bad for U.K. savers and competitiveness.” Critics argue the U.K. risks falling behind the U.S. and EU, which advanced regulations without imposing volume caps.
Why it matters:
✅ Regulatory contrast could erode the U.K.’s leadership in crypto policy.
✅ Restrictions may push users toward offshore or self-custody alternatives.
✅ Underscores how global regulatory competition will shape the future of stablecoins.
Lumx Roundup
Last week, Lumx took the stage at two major events. At Finance of Tomorrow 2025 in Rio de Janeiro, Co-Founder & CEO Caio Barbosa joined two panels on tokenization and stablecoin interoperability alongside regulators and market leaders.
In São Paulo, at Next Day #7, Caio spoke on the All Stars stage about Lumx’s journey and how stablecoins and blockchain are transforming finance, a return to the Fenasbac program that played a key role in Lumx’s early growth.
Meanwhile, Lumx CRO Nathaly Diniz represented the company at Latam Fintech Market 2025 in Bogotá, highlighting Colombia’s rising role in the global stablecoin landscape.
Finally, the week brought big news: Season 2 of the Stable Talks podcast is launching, now powered by Bitso Business, with Julian Colombo joining as co-host. The first episode, featuring Antonia, Visa’s Head of Blockchain & Crypto for Latin America, drops this Thursday.
Click here for more info
This edition of Stable News underscores how the sector is being reshaped: giants like PayPal and Tether are battling exchanges and native protocols; regulations are redrawing competitive lines across continents; and Latin America continues to consolidate its role as a global testbed for adoption and strategic debate.
Stablecoins aren’t just a trend, they are fast becoming critical infrastructure for the digital economy.
See you next edition.
