TheDinarian
News • Business • Investing & Finance
Are same brand stablecoins fungible in different regions?
May 03, 2025
post photo preview

Many countries are introducing stablecoin laws, each with their own requirements, especially regarding reserves. If the same stablecoin brand is issued in multiple jurisdictions using the same brand, is it fungible (or entirely interchangeable)? There’s the practical fungibility versus the legal one, especially if a stablecoin collapses.

Highlights:

  • Each jurisdiction imposes different reserve composition and redemption rules for stablecoins
  • Multi jurisdiction issuers use arrangements between regions to harmonize reserves
  • Issuers cannot precisely track how many tokens circulate in each region due to secondary market transfers
  • Formal crisis plans will determine outcomes during stress events
  • During a collapse, holders in specific regions could face different recovery rates depending on local reserve adequacy.

While the biggest use case for stablecoins is currently for cryptocurrency transactions, there’s a growing appreciation of their benefits for cross border payments. Plus, the infrastructure to support this is expanding, with Stripe’s acquisition of Bridge being one of many examples. After passing the $200 billion issuance mark in December 2024, many predict it won’t be long before stablecoins reach the trillion mark. Citi recently estimated a base case of $1.6 trillion by 2030, with a bullish estimate of $3.7 trillion.

Defining fungibility

The definition of ‘fungible’ according to the Oxford Dictionary:

“Of a product or commodity that has been contracted for: that can be replaced by another identical item without breaking the terms of the contract. More generally: interchangeable, replaceable.”

What’s notable about this definition is that stablecoins issued in different jurisdictions will likely have separate contracts.

The core fungibility issue arises because a resident of one jurisdiction might receive a payment that involves a token that’s technically issued in another jurisdiction. In the examples we’re discussing, these are the same brand of tokens.

Technically, EU crypto exchanges may be breaking the rules

Imagine a global stablecoin, let’s call it GlobalCoin, issued in two jurisdictions e.g. Japan and EU each meeting local requirements. Clifford Chance partner, Diego Ballon Ossio, highlighted that this is potentially problematic in the EU. He noted that, “technically the EU issuer or exchange should have something in place to avoid the Japanese version of that coin to be listed, exchanged, and traded in the EU. Because it’s not exactly the same coin, particularly if say liquidity requirements differ.”

He gave the example of someone from Japan paying an EU resident with GlobalCoin via an EU cryptocurrency exchange. From the user’s perspective, a GlobalCoin is a GlobalCoin, they can’t differentiate where it was issued.

Mr Ballon Ossio continued, “If that coin was used in an exchange, that exchange is now admitting to trading a coin that technically hasn’t been approved because the Japanese version wasn’t approved. And actually you would not be allowed to offer that coin because that coin is being sold as an e-money token, but it’s actually been issued by a non-EU issuer.”

The EU’s MICA regulations don’t deal with this situation. There’s a pragmatic approach involving the issuers rebalancing the books between the jurisdictions, which isn’t perfect. It will work 99.99% of the time, but will be tricky in a de-peg event.

USDC is the first prominent example

The most prominent example of a stablecoin that’s issued in multiple jurisdictions is Circle’s USDC, which is primarily issued in the United States. While this article references USDC a few times, the content and issues are not specific to Circle or USDC.

Circle has EU emoney and MiCAR licenses and issues USDC in France under European rules. The EU version of USDC has a separate issuer, different terms (ie. a separate contract) and ringfenced reserves. For example, all EU USDC stablecoin holders can directly redeem the stablecoin with Circle SAS, provided they go through KYC and compliance procedures. In the US, only larger entities and distributors (primary participants) can redeem directly. The UK has changed its planned approach and now intends to allow redemption only via primary participants.

Jurisdictions have different reserve requirements

Looking at its reserves, in the United States the USDC stablecoin keeps around 15% of its reserves in bank deposits, according to Circle’s transparency reports. USDC temporarily lost its dollar peg when Silicon Valley Bank collapsed in 2023 holding $3.3 billion of USDC reserves. Before that, Circle kept around a quarter of its reserves at banks. Even 15% is more than most stablecoin issuers, in part because holders of other stablecoins often switch to USDC to off ramp. For example, Tether only keeps around 0.1% at banks.

Turning to EU’s MiCAR, it requires smaller coins to keep 30% of their reserves in cash, and larger ones 60%. The regulations attempt to address the risks by limiting the amount held by a single bank.

Another example is Japan, which currently requires 100% of stablecoin reserves to be held in bank accounts, although it’s exploring changing the rules to support government bonds.

In the case of Circle, it also has a license in Singapore. For its Singapore issuance, all reserves are held in a trust account at Standard Chartered Singapore.

Estimating regional stablecoin issuance

Each jurisdiction expects stablecoin reserves to be held onshore in the proportions required by law. Yet stablecoins are bearer tokens where most transactions take place in secondary markets, so issuers don’t know the identity of all their coin holders, or where they are based.

In order to rebalance the books between the regions, they have to estimate the regional figures. Europe has provided guidelines for how to do this for foreign currency coins, which involves getting reports from local crypto asset service providers (CASPs), including crypto exchanges and custodians. CASPs have to provide the issuer with reports on a daily basis. Self hosted wallets tend to be glossed over and these might be retail or institutional.

That said, if a large liquidity provider uses a coin issued in the US to pay for a multi billion Bitcoin transaction in the EU, that will move a lot of coins. However, some of these institutional wallets are traceable, although there is an increasing tendency for larger players to attempt to cover their tracks.

If jurisdictions don’t prescribe rules, then issuers will likely make estimates using issuance and redemption figures via primary participants (distributors).

In the case of USDC, in its MiCAR whitepaper it notes that it will rebalance the reserves between the two current jurisdictions. As one of the risks, the European USDC whitepaper says:

“Dual Issuer Risk. Circle LLC and Circle SAS have entered into a contractual arrangement to rebalance their respective reserves in the event that one reserve is no longer able to meet its liabilities. The Circle SAS Recovery Plan and Redemption Plan will take into account these intra-company considerations and outline a uniform and coordinated approach by both issuers in order to be able to cover any outstanding liabilities and satisfy redemptions in a prompt and equitable way.” 

What happens if the GlobalCoin stablecoin fails?

As we’ve shown, stablecoin issuers can make best efforts to ensure the reserves are sitting in the correct jurisdiction. But they won’t know precisely how many stablecoins are held in each jurisdiction until everyone wants to redeem simultaneously. So what happens if GlobalCoin fails?

There are two ways this will be addressed. One is by having a plan in place, and the EU requires emoney token (stablecoin) issuers to have both recovery and redemption plans. However, these are not public documents. Mr Ballon Ossio was willing to speculate what the contents might include. If there were a shortfall, the treatment is likely to be similar to a client assets framework. This would usually spread the loss across a single class of asset holders. In other words, if there was a 10% shortfall in reserves, then a US dollar stablecoin would be worth 90 cents for redemption purposes.

A second path is for regulators in jurisdictions to have mutual agreements. Mr Ballon Ossio highlighted that in the banking world there’s the Basel Committee framework for banks. However, just looking at the US draft stablecoin regulations, MiCAR and Japanese regulations, the requirements for redemption and holding liquid bank balances are vastly different. While Basel implementations differ between jurisdictions, there’s more homogeneity compared to stablecoins.

This fungibility topic probably won’t matter for 99.99% of the time. As more and more jurisdictions pass legislation, there’s more need for laws to provide legal clarity on this topic, especially given cross border payments are a key stablecoin use case. Hopefully it will be a very long time before there’s a need to explore what happens in the 0.01% scenario: a failure of a multi-jurisdiction stablecoin.

Source

🙏Please Support My Work 🙏

If you find value in my content, consider showing your support:

💳 PayPal – Simply scan the QR code 📲
🔗 Crypto – Support via Coinbase Wallet to: [email protected]

Your generosity keeps this mission alive! Namasté 🙏✨ #SupportIndependentMedia #Crypto

community logo
Join the TheDinarian Community
To read more articles like this, sign up and join my community today
0
What else you may like…
Videos
Podcasts
Posts
Articles
Have you noticed a Personality Change in those who took the experimental Covid Vaccines?

If so, here’s the theory as to why this has happened, and it makes perfect sense as to why the elites would do this. THEY do not want you to be able to step into your power. With this destroyed, THEY win.

00:01:10
Stargate: Establishing the Physical Foundations of the AI Revolution 🛰️🌎

The Stargate initiative represents the most substantial investment in artificial intelligence infrastructure to date, as it begins to materialize on a global scale. While many perceive AI as an ethereal technology—simply accessed via applications like ChatGPT 🤖—each digital interaction is, in fact, powered by extensive physical resources: vast data centers 🏢, thousands of cutting-edge GPUs 💾, sophisticated cooling systems 💧, dedicated power grids ⚡, and essential water pipelines 🚰. AI does not reside on personal devices; it is anchored on Earth and demands significant resources.

As artificial intelligence continues to advance, its infrastructure needs only intensify. Regardless of improvements in model efficiency, the explosive growth in usage—billions of queries, ongoing model training, and worldwide deployment—necessitates ever-greater computing power, land, electricity, and semiconductors. This expansion is not plateauing; it is accelerating 📈.

Stargate stands ...

00:01:55
🚨 A Senior UAE Official Has Forecasted...👀

🇦🇪 The United Arab Emirates has taken a decisive step that the United States has been reluctant to pursue.

👉 “Within the next two years, cryptocurrency will be used more frequently than traditional currencies like the dollar or dirham, even for everyday purchases such as coffee and groceries.” 🏦☕🛒

It is worth noting which cryptocurrencies offer transaction fees that are virtually negligible. 😏

The official further stated: “Mark my words, I believe in actions, not just words.”

00:01:00
👉 Coinbase just launched an AI agent for Crypto Trading

Custom AI assistants that print money in your sleep? 🔜

The future of Crypto x AI is about to go crazy.

👉 Here’s what you need to know:

💠 'Based Agent' enables creation of custom AI agents
💠 Users set up personalized agents in < 3 minutes
💠 Equipped w/ crypto wallet and on-chain functions
💠 Capable of completing trades, swaps, and staking
💠 Integrates with Coinbase’s SDK, OpenAI, & Replit

👉 What this means for the future of Crypto:

1. Open Access: Democratized access to advanced trading
2. Automated Txns: Complex trades + streamlined on-chain activity
3. AI Dominance: Est ~80% of crypto 👉txns done by AI agents by 2025

🚨 I personally wouldn't bet against Brian Armstrong and Jesse Pollak.

👉 Coinbase just launched an AI agent for Crypto Trading
‼️MAJOR CONFIRMATION DIRECTLY FROM SWIFT

‼️MAJOR CONFIRMATION DIRECTLY FROM SWIFT: “No more delays — THE NOVEMBER 2025 DEADLINE FOR ISO 20022 MIGRATION IS FINAL AND WILL NOT MOVE.”‼️

OP: @Smqkedqg

post photo preview
The Vatican's Control Runs Deep 👀

The Vatican has been the subject of countless theories throughout history. From secret archives to alleged world domination schemes. Let's explore the most common Vatican theories, their origins, and what we actually know.

The Major Vatican Theories:

The Illuminati Connection: The Vatican secretly controls or collaborates with the Illuminati to establish a New World Order.

Secret Archives Control: The Vatican Secret Archives contain proof of alien contact, suppressed scientific discoveries, or evidence of historical cover-ups.

The P2 Masonic Lodge Scandal: The Vatican Bank was involved in a massive conspiracy involving the P2 Masonic lodge, political corruption, and murder.

Suppression of Scientific Knowledge: The Vatican has systematically suppressed scientific discoveries that contradict Church doctrine.

The Third Secret of Fatima: The Vatican is hiding apocalyptic prophecies revealed at Fatima that would cause global panic if disclosed.

Financial Scandals: Legitimate concerns about ...

post photo preview
Veritaseum Hodlers, Are You Ready For Chaos? 🚀 👩‍🚀

What would happen if Veritaseum was "Resurrected" from the Land of Dead Cryptos? Would Clif High's prediction of Veri trading 1 to 1 with Bitcoin actually come TRUE?! We may just find out SOONER than you think!!

post photo preview
Stellar's Ecosystem Surges Forward: Smart Contracts, Lightning Speed, and Real-World Impact in 2025

The Stellar blockchain ecosystem is experiencing remarkable momentum in 2025, with groundbreaking technical achievements and expanding real-world adoption that position it as a major player in the decentralized finance landscape. From lightning-fast transaction speeds to innovative smart contract capabilities, Stellar is demonstrating that blockchain technology can deliver both performance and practical utility.

Technical Breakthroughs Drive Performance

The Stellar Development Foundation's Q1 2025 quarterly report reveals impressive technical milestones that showcase the network's maturation. The platform now processes an astounding 5,000 transactions per second with remarkably fast 2.5-second block times, putting it among the fastest blockchain networks in operation today.

This performance leap isn't just about raw numbers—it represents Stellar's commitment to creating infrastructure that can handle real-world demand. Whether it's cross-border payments, asset tokenization, or decentralized applications, the network's enhanced capabilities provide the foundation for scalable blockchain solutions.

Smart Contracts Get Smarter with Soroban

One of the most significant developments has been the launch and continued evolution of Soroban, Stellar's smart contract platform. The introduction of Contract Copilot represents a major advancement in developer experience, enabling faster and safer smart contract development through enhanced tooling and guidance.

This focus on developer experience is crucial for ecosystem growth. By lowering barriers to entry and improving the development process, Stellar is positioning itself to attract innovative projects and talented developers who might otherwise choose competing platforms.

New Token Standards Meet Market Needs

The Stellar Development Foundation has introduced new token standards developed specifically based on feedback from developers and institutional users. This responsive approach to platform development demonstrates Stellar's commitment to building technology that meets actual market needs rather than theoretical requirements.

These standards are particularly important as institutional adoption continues to grow, with organizations requiring robust, compliant, and flexible token frameworks for their blockchain initiatives.

Global USDC Integration Expands Utility

The integration of USDC across Stellar's global network represents a significant milestone for practical cryptocurrency adoption. Stablecoins like USDC provide the price stability necessary for everyday transactions and business operations, making them crucial for blockchain platforms seeking real-world utility.

This integration is particularly impactful in emerging markets, where access to stable digital currencies can provide financial services to underbanked populations and facilitate more efficient cross-border transactions.

Industry Events Build Community Momentum

The Stellar ecosystem's growing influence is evident in its presence at major industry events. The foundation's participation as a sponsor at Consensus 2025 in Toronto and Digital Assets Week in New York demonstrates its commitment to engaging with builders, investors, and institutional leaders across the blockchain space.

These events serve as crucial networking opportunities and platforms for showcasing innovative projects within the Stellar ecosystem. Recent Meridian events have highlighted creative projects like Skyhitz and HoneyCoin, illustrating the collaborative spirit and diverse applications being built on the platform.

Real-World Impact in Emerging Markets

Perhaps most importantly, Stellar's growth isn't just about technical metrics—it's about real-world impact. The platform's focus on emerging markets addresses genuine financial inclusion challenges, providing efficient payment rails and access to digital financial services where traditional banking infrastructure may be limited.

This practical approach to blockchain implementation sets Stellar apart from projects that focus primarily on speculative trading or theoretical use cases. By solving actual problems for real users, Stellar is building sustainable demand for its technology.

Looking Ahead: Enterprise-Grade Infrastructure

Stellar positions itself as offering enterprise-grade asset tokenization alongside its DeFi capabilities and payment infrastructure. This comprehensive approach makes it attractive to institutions looking for a single platform that can handle multiple blockchain use cases.

The combination of fast transactions, low costs, smart contract capabilities, and regulatory-conscious development creates a compelling value proposition for enterprises considering blockchain adoption.

The Road Forward

As 2025 progresses, Stellar's ecosystem appears well-positioned for continued growth. The technical infrastructure improvements, developer-focused enhancements, and real-world adoption initiatives create a strong foundation for expanding use cases and user adoption.

The blockchain industry has seen many projects promise revolutionary capabilities, but Stellar's focus on delivering measurable performance improvements and practical solutions suggests a mature approach to blockchain development. With transaction speeds that rival traditional payment systems and growing institutional adoption, Stellar is demonstrating that blockchain technology can move beyond experimental phases into mainstream utility.

For developers, institutions, and users looking for blockchain solutions that prioritize both performance and practical applicability, Stellar's 2025 developments represent significant progress toward a more accessible and useful decentralized financial ecosystem.

Source: The Dinarian ⚡ Claude AI

🙏 Donations Accepted 🙏

If you find value in my content, consider showing your support via:

💳 PayPal: 
1) Simply scan the QR code below 📲
2) https://www.paypal.me/thedinarian

🔗 Crypto – Support via Coinbase Wallet to: [email protected]

Or Buy me a coffee: https://buymeacoffee.com/thedinarian

Your generosity keeps this mission alive, for all! Namasté 🙏 The Dinarian

Read full Article
post photo preview
Soroban Security Audit Bank: Raising the Standard for Smart Contract Security

The Stellar Development Foundation (SDF) is deeply committed to helping ensure that the highest security standards are available for projects building on the Stellar network. Last year SDF launched the Soroban Security Audit Bank, an initiative to provide projects access to auditing experts and tooling that are proven to help prevent hacks by catching potential bugs, inefficiencies, and security flaws before contracts go live. Through the Soroban Security Audit Bank, we’re empowering teams building on Soroban with comprehensive security audits from leading audit firms, enhanced readiness support, and robust tooling, significantly elevating the ecosystem’s safety and efficiency.

Since launch, the Soroban Security Audit Bank has successfully conducted over 40 essential audits, deploying over $3 million to support security of the smart contracts on Stellar. Check it out!

 

Ecosystem Success Stories: How the Soroban Audit Bank Drives Security Forward

By making automated formal verification available to developers, in addition to allocating significant budget for securing many of the top DeFi protocols built on top of Stellar, SDF has established a new security standard in the Web3 ecosystem. Mooly Sagiv, Co-Founder of Certora
SDF has been a strong partner as we’ve worked with teams across the Stellar ecosystem. SDF’s Audit Bank initiative allows for a smooth and streamlined review process, and is a clear reflection of the Stellar ecosystem’s enhanced commitment to security. Robert Chen, CEO of OtterSec
 

Leading projects within the Soroban ecosystem have highlighted the impact of the Audit Bank

Finding a good auditor is difficult, expensive, and high-stakes. The Audit Bank streamlines the process and supports ecosystem projects with security review at critical growth milestones. Markus Paulson, Co-Founder of Script3
The audit firms we worked with deeply understood the full ecosystem and the underlying protocols used. Their expertise and the tools from the Audit Bank strengthened our security and supported user and investor trust. Esteban Iglesias Manríquez, Co-Founder of Palta.Labs

What's New in 2025: Enhanced Audit Support for Soroban Builders

Teams building financial protocols, high-dependency data services, high-traction dApps funded by the Stellar Community Fund are able to request an audit and will typically be matched with a reputable audit firm within two weeks. We recently restructured the program for this year to enhance audit efficiency and incentivize accountability, and rapid and complete vulnerability remediation:

  • Complimentary Initial Audit: Projects will need to contribute 5% of the audit cost upfront, but this co-payment amount is eligible for a full refund, provided that critical, high, and medium vulnerabilities identified are swiftly remediated within 20 business days of receiving the initial audit report (learn more).
  • Incentivized Security at Key Traction Milestones: Complimentary, extensive follow-up audits are available as projects achieve critical traction milestones (e.g., $10M and $100M TVL). These audits include deeper assessments such as formal verification or competitive audits, significantly boosting project security at pivotal stages.
  • Advanced Security Tooling: Projects can enhance their security self-serve through complimentary or discounted access to specialized tooling, which provide vulnerability detection and formal verification capabilities (see full list of available tooling). These tools are encouraged to capture ‘easy-to-spot’ issues prior to audit as well as a final check post-audit to increase the effectiveness and thoroughness of audits.
  • Enhanced Audit Readiness Support: Projects receive structured preparation support, including the implementation of best practices and security standards based on the STRIDE threat modeling framework. This ensures project teams are thoroughly prepared, optimizing audit efficiency and minimizing delays.

Get Started Today

If you're already funded through the Stellar Community Fund, meet the criteria and ready to secure your smart contracts, check your email for an invitation to submit an audit request–if you haven’t received one, contact [email protected].

If you haven't built on Stellar yet, we encourage you to start your journey with the Stellar Community Fund to become eligible for future security audits and ecosystem support. For any broader questions on the program, contact [email protected].

Also, we’re organizing an exciting series of workshops–join us for the kick-off on Soroban Security Best Practices on Friday, May 30, 2025 at 2 PM ET on @StellarOrg. Together, we're shaping a secure and resilient future for smart contracts on Stellar.

Source

🙏 Donations Accepted 🙏

If you find value in my content, consider showing your support via:

💳 PayPal: 
1) Simply scan the QR code below 📲
2) https://www.paypal.me/thedinarian

🔗 Crypto – Support via Coinbase Wallet to: [email protected]

Or Buy me a coffee: https://buymeacoffee.com/thedinarian

Your generosity keeps this mission alive, for all! Namasté 🙏 The Dinarian

Read full Article
post photo preview
Santander mulls stablecoin, crypto offering

Bloomberg reported that Banco Santander is mulling introducing euro and dollar stablecoins, or potentially making a third party coin available to clients, citing sources. This move aligns with broader crypto ambitions, as its digital bank, Openbank, has reportedly applied for a European cryptocurrency license under the Mica Regulations and may enable retail access to digital assets.

Systemically important banks embrace stablecoins?

Major banks are now moving from observers to participants in this expanding market. Should Santander confirm plans to launch a stablecoin, it will be the fourth global systemically important bank (G-SIB) to do so. Societe Generale’s FORGE subsidiary launched the EURCV euro coin in 2023. Deutsche Bank is a partner in ALLUnity, another stablecoin initiative with plans to launch this year, subject to regulatory approval. And Standard Chartered is part of a joint venture in Hong Kong that intends to introduce a stablecoin.

Santander’s involvement could extend beyond an individual initiative. The bank is a shareholder in The Clearing House, where the Wall Street Journal reported that US banks are exploring the potential to create a joint stablecoin. If a US initiative took that route it could involve nine more G-SIBs including Bank of America, Barclays, BMO, BNY Mellon, Citi, HSBC, JP Morgan, TD Bank and Wells Fargo.

Apart from these initiatives, our research shows that more than 20 other banks have been involved in stablecoin projects.

Until recently stablecoins were mainly used to settle cryptocurrency transactions and by residents in countries with volatile domestic currencies. During the last year stablecoin infrastructure has been expanding, especially for mainstream cross border payments. Plus, President Trump issued an executive order prioritizing stablecoins. One of the administration’s motivations is this increases demand for US Treasuries, lowering the interest rate the government pays on the Treasury bills.

Santander as an early digital assets mover

Santander’s stablecoin consideration builds on years of blockchain experience. The bank was an early Ripple investor and previously used Ripple’s permissioned network for payments (not XRP), while also embracing permissionless blockchain activities including issuing a digital bond on Ethereum in 2019. This dual approach led to collaborations with other major players – alongside Societe Generale FORGE and Goldman Sachs, Santander participated in the European Investment Bank’s first digital bond, also on Ethereum. Currently, the bank’s most significant digital money initiative involves Fnality, the wholesale blockchain-based settlement network, where Santander ranks among 20 institutional backers and is part of the early adopter group alongside Lloyds Bank and UBS.

Source

🙏 Donations Accepted 🙏

If you find value in my content, consider showing your support via:

💳 PayPal: 
1) Simply scan the QR code below 📲
2) https://www.paypal.me/thedinarian

🔗 Crypto – Support via Coinbase Wallet to: [email protected]

Or Buy me a coffee: https://buymeacoffee.com/thedinarian

Your generosity keeps this mission alive, for all! Namasté 🙏 The Dinarian

Read full Article
See More
Available on mobile and TV devices
google store google store app store app store
google store google store app tv store app tv store amazon store amazon store roku store roku store
Powered by Locals