Crypto Biz: Wall Street and Crypto Compete Over Stablecoins and Tokenized Assets

Binance Deepens Relationship with Circle Through $100M Investment

Binance has solidified its involvement in the stablecoin space by investing $100 million in Circle, the issuer of USDC, and agreeing to a five-year arrangement to boost USDC usage on its platform. A filing with the U.S. Securities and Exchange Commission revealed that on September 17, Binance purchased 1,237,011 shares of Circle’s Class A stock at $80.84 each, a price below the market rate prior to closing.

Following the announcement, Circle’s stock saw an uptick. The deal includes a commercial partnership where Circle will pay Binance monthly incentives based on the amount of USDC held through Binance’s Modular Smart Contract Wallet infrastructure.

Binance is restricted from selling or transferring these shares for up to two years, though early termination clauses exist. The company retains voting rights on these shares during the lockup.

Canada’s Largest Banks Explore Tokenized Deposits

Six of Canada’s leading banks – Bank of Montreal, CIBC, National Bank of Canada, Royal Bank of Canada, Scotiabank, and TD Bank Group – are collaborating to test tokenized Canadian dollar deposits, potentially creating a new payment rail enabling digital bank deposit representations to move between institutions.

The initial phase focuses on transfers among the participating banks, with plans for connectivity to other digital asset networks later on.

A key regulatory clarification from Canada’s Office of the Superintendent of Financial Institutions on September 10 established that tokenized deposits carry the same legal standing as traditional deposits, despite leveraging blockchain technology.

Unlike fiat-backed stablecoins, tokenized deposits remain liabilities of their issuing banks. The banks anticipate that this approach could allow faster, programmable payments and open the door for additional deposit-taking institutions to join in future phases.

Stablecoin Payments Soar Despite Crypto Market Downturn

Cross-border stablecoin flows increased nearly 78% year-over-year to $220.3 billion through June, even as the overall crypto market capitalization declined by 37% to around $2.1 trillion, according to analytics firm Chainalysis.

The study identified 4,708 new cross-border stablecoin corridors carrying $2.64 billion, though most volume remains concentrated in the largest routes representing over 96% of total value.

The typical transaction size of approximately $3,000 suggests usage patterns aligned with trade, remittances, and savings rather than speculative trading.

Industry experts attribute the surge to demand for dollar access, inflation hedging, and circumvention of capital controls, especially outside Asia. Regulatory clarity in various regions, including the GENIUS Act in the U.S. and the EU’s MiCA framework, has also supported stablecoin adoption.

NYSE and Blockchain.com Collaborate on Tokenized Stock Trading

Blockchain.com and the New York Stock Exchange have signed a memorandum of understanding to launch a digital alternative trading system (ATS) for tokenized U.S. stocks and exchange-traded funds (ETFs), pending regulatory approval.

This partnership also involves a market data agreement between Blockchain.com and ICE Data Services, a division of Intercontinental Exchange, which owns NYSE.

Market participants view the initiative as an opportunity to attract retail investors by enabling 24/7 and weekend trading hours. Tokenized stock holdings have surged to $3.14 billion with a 72% increase in holders.

Furthermore, the U.S. Securities and Exchange Commission recently introduced a five-year Innovation Exemption for eligible tokenized securities platforms. Eligible tokenized stocks must correspond to actual shares giving holders identical economic and governance rights as traditional investors.