Sophia’s Thoughts on Stablecoin Activity
Stablecoins have moved from the fringes of crypto into the heart of global power, financial infrastructure, and market liquidity. Here’s what’s been happening.
These are Sophia's Thoughts:
The Trump administration’s dual role as both stablecoin backer and policymaker has turned USD1 into a political dispute, and has delayed bipartisan legislation in the process.
While Washington stalls, global banks, payment networks, and fintechs are racing ahead to integrate stablecoins into the foundations of everyday finance.
With stablecoin market caps at all-time highs and liquidity flowing into crypto, these once-niche instruments are now integrating with financial infrastructure.
Join IL Pro for free now and get access to Sophia and Pallas, our premier crypto intelligence solutions that have been helping investors trade like pros! Just tell us how you feel about crypto and let Indicia Labs do the rest. Use the offer code ILxYOU when signing up for IL Pro.
🚀 Last week’s market performance
The crypto market cooled off of its multi-week rally, closing the week down 1.0%.Bitcoin (BTC) mirrored the market closely, but performed slightly better, closing with a 0.3% loss. The best performing coin of the week was Akash Network (AKT), which gained 34.9%. The worst performing coin this week was Celestia (TIA) which fell 19.4% last week.
🧐 What is your crypto mood today?
In each Sophia's Thoughts newsletter, we ask about your crypto mood. Your response to this question helps Sophia get a better sense of the pulse of crypto markets. And this ultimately translates into better insights for you when combined with Sophia's AI models. Your data empowers Sophia to provide you with even better intelligence going forward!
🔴 Political Power Plays
Donald Trump’s stablecoin, USD1, has become the unlikely centerpiece of a geopolitical crypto deal. The Trump-linked business, World Liberty Financial, announced that USD1 will be used to settle a USD 2 billion investment by UAE-backed MGX into Binance, the world’s largest crypto exchange. Senator Elizabeth Warren condemned the move as “corruption,” warning the Senate was “getting ready to green light the grift.”
Launched in March and backed by U.S. Treasuries, USD1 has quickly amassed a USD 2.1 billion market cap. Co-founder Zach Witkoff confirmed it was “selected as the official stablecoin to close MGX’s $2 billion investment in Binance.” Binance founder Changpeng Zhao, still a major shareholder despite pleading guilty to anti-money laundering charges, is seeking a pardon from the Trump administration.
The deal has intensified scrutiny on the GENIUS Act, a Republican-backed stablecoin bill that initially received bipartisan committee support. But following revelations about Trump’s direct and indirect stake in USD1, nine Senate Democrats said they would not support it, citing weakened anti-money laundering provisions and ethics concerns. “The bill… backpedaled on a lot of the progress we made,” said Senator Ruben Gallego.
At the heart of the backlash: World Liberty Financial’s leadership is stacked with Trump family members. Eric Trump, Donald Trump Jr., and even Barron Trump hold public roles. With President Trump pushing for the bill’s passage before the August recess, critics fear a blurring of lines between public policy and private profit.
💼 Institutional Acceleration
While Washington debates stablecoin ethics, private-sector adoption is surging ahead. Payments giants like Mastercard, Visa, and Stripe are rapidly integrating stablecoins into their networks, signaling that these assets are becoming central to the future of digital commerce.
On April 28, Mastercard expanded its stablecoin card options through a partnership with OKX. Visa followed, announcing support for stablecoin payments across Latin America in collaboration with Stripe and Bridge. Stripe CEO Patrick Collison also confirmed the company is building a dollar-based stablecoin for global use, part of its post-acquisition roadmap following a USD 1 billion deal for Bridge. Mastercard’s ecosystem plan with OKX, alongside Stripes and Visas, shows how legacy financial rails are being rebuilt to support stablecoin-based commerce at scale, marking a shift from experimental crypto tools to institutional-grade payment systems.
Meanwhile, banks are tokenizing dollars. Custodia Bank and Vantage Bank recently processed real-world, cross-border payments using tokenized U.S. dollars—called Avits™—on a public blockchain. This allows businesses to automate transactions like payroll or shipping payments using smart contracts. Logistics firm DX Xpress used the system to settle cross-border payments in seconds. “We're bringing corporate treasurers the global network effects of permissionless networks by delivering them in a format usable for audited, compliant businesses,” said Custodia CEO Caitlin Long.
Even Tether, the dominant stablecoin issuer, is preparing a U.S.-compliant version of USDT, reflecting the regulatory thaw under the Trump administration. “A domestic stablecoin would be different from the international stablecoin,” said CEO Paolo Ardoino.
Across fintech, banking, and blockchain ecosystems, one message is clear: institutions are not waiting for Congress—they’re building stablecoin infrastructure now.
💸 Market Growth and Impact
April marked a record high for the stablecoin market, which surged to USD 238 billion in capitalization after 19 consecutive months of growth, according to CoinDesk. USDC hit a record USD 62.1 billion, while USDT reached USD 148 billion, reinforcing their position as crypto’s reserve currencies. At the same time, non-USD stablecoins spiked 30% to USD 533 million, a reaction to ongoing U.S. dollar volatility and global trade uncertainty. “As confidence in the dollar wavers, demand for non-USD fiat stablecoins has accelerated,” CoinDesk reported.
This liquidity expansion isn’t happening in a vacuum. Mastercard, Visa, Stripe, and Kraken are actively onboarding stablecoin services across payment rails. As Dan Boyle of Boies Schiller Flexner noted, “There’s certainly a change in how the administration views the digital assets industry… this is not a confrontational posture.”
The convergence of capital flows, institutional backing, and regulatory thaw is transforming stablecoins from a niche crypto utility into a foundation for the next generation of financial infrastructure.
Do you want to stay up-to-date on the latest crypto intelligence? Join Indicia Labs for free.
Indicia Labs does not provide investment, tax, or legal advice. You are solely responsible for determining the suitability of any investment, investment strategy, or related transaction based on your personal investment objectives, financial circumstances, and risk tolerance. Indicia Labs may offer educational information about digital assets, which may include blog posts, articles, third-party content, news feeds, tutorials, and videos. This information does not constitute any form of advice, and you should not rely on it as such. Indicia Labs does not recommend buying, earning, selling, or holding any digital asset and will not be responsible for any decisions you make based on the provided information. Any content provided by Indicia Labs may contain errors, inaccuracies, or outdated information and should not be relied upon for making any investment decisions and Indicia Labs and its affiliates hold no responsibility for the accuracy of the provided information or content.
As with any asset, the value of digital assets can fluctuate, and there is a significant risk of losing money when buying, selling, holding, or investing in digital assets. Consult your financial advisor, legal or tax professional regarding your specific situation and financial condition, and carefully consider whether trading or holding digital assets is suitable for you.
Indicia Labs is not registered with the U.S. Securities and Exchange Commission and does not offer securities services in the United States or to U.S. persons. You acknowledge that digital assets are not subject to protections or insurance provided by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation.
