Onigiri Weekend Digest: Institutional Lens #18

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Good morning and welcome to Stablescope — Weekend Edition.

Good morning. Welcome to this week’s Stablescope Weekend Edition, where we examine two developments that together crystallise the next phase of the stablecoin market: one unfolding inside Washington’s legislative corridors, the other playing out at the geopolitical edge of the global financial system.

Recap this Week's Headliners

SS #67 - Coinbase and White House Clash Over Stablecoin Bill
SS #68 - Iran Deploys $500M in Tether to Defy Sanctions and Prop Up Rial

Viewed together, these stories underscore a single reality: stablecoins have moved beyond crypto policy debates and into the domain of monetary power, state capacity, and institutional control.

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🍙Onigiri Take

In the United States, policymakers are attempting to constrain stablecoin functionality—particularly yield and incentives—to preserve the primacy of the traditional banking system. Offshore and sanctioned jurisdictions, by contrast, are exploiting stablecoins precisely because of those same features: programmability, capital efficiency, and resistance to legacy chokepoints.

This divergence carries long-term consequences. If U.S.-regulated stablecoins are reduced to narrow, utility-lite instruments, capital formation, liquidity, and innovation will increasingly migrate to jurisdictions and instruments that retain full economic functionality.

The strategic question is no longer whether stablecoins scale globally, but whether regulated systems will remain competitive against less constrained alternatives.

Coinbase and the White House Clash Over the Stablecoin Bill

• This dispute highlights a fundamental tension between financial innovation and incumbent protection. Efforts to safeguard bank deposits by restricting stablecoin yield risk weakening the utility and competitiveness of regulated digital dollars, potentially driving liquidity and innovation toward offshore or less regulated alternatives over time.

Iran Deploys $500M in Tether to Defy Sanctions and Stabilise the Rial

• Iran’s use of USDT is a sovereign-scale test of stablecoin neutrality. It demonstrates clear product-market fit for stablecoins as alternative dollar rails, while simultaneously accelerating regulatory and national-security scrutiny that threatens the open and composable nature of crypto-based financial infrastructure.

🍙Winners & Losers: Institutional Outlook

🍙Under the Hood: Where Stablecoins Are Heading

Three structural trends are becoming evident:

1. Yield Is the Core Policy Fault Line: Yield converts stablecoins from payment instruments into savings and balance-sheet competitors, placing them in direct conflict with banks.

2. Issuer Control Has Structural Limits: Even with blacklisting capabilities, issuers cannot fully police decentralised or state-level usage without undermining composability.

3. Regulatory Fragmentation Is Inevitable: Markets are bifurcating between tightly regulated, lower-utility systems and offshore environments where risk — and innovation — concentrates.

🍙Stablecoin ≠ Crypto — Digital Dollars as Monetary Infrastructure

Stablecoins should no longer be analysed as a subset of crypto markets. They now function as:

• Digital dollar distribution networks

• Cross-border settlement rails

• Shadow banking instruments

• Strategic policy and sanctions tools

Misclassifying them as speculative crypto assets risks significant policy and institutional blind spots.

🍙Institutional Risks & Unknowns

1. Can yield restrictions survive market pressure without driving capital offshore?

2. How far will issuers be pushed into quasi-regulatory enforcement roles?

3. Will national-security framing justify broader controls on open infrastructure?

4. Does market bifurcation reduce systemic risk — or merely relocate it?

Onigiri Capital (onigiri.vc), a US$50 million blockchain-focused investment fund, launched by Saison Capital, the venture arm of Japan’s Credit Saison. Onigiri Capital is on a mission to chart the next chapter of finance and invest in seed and Series A blockchain startups in stablecoins, payments, RWAs, DeFi and financial infrastructure. The fund’s strategy emphasizes connecting startups to Asia’s growing digital asset markets.

If you'd like to discuss or contribute to the next Institutional Lens, contact us at [email protected]

Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.