Onigiri Weekend Digest: Institutional Lens #19

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Good morning and welcome to Stablescope — Weekend Edition.

Welcome to this week’s Stablescope Weekend Edition, where we examine two developments that, taken together, frame the next phase of the stablecoin market:

Recap this Week's Headliners

SS #69 - The $100B Rise and Stall of A7A5 
SS #70 - Tether Launches USAT as the Federal Era of Stablecoins Begins

One story highlights the limits of “permissionless” finance under state pressure; the other signals the institutionalisation of stablecoins as regulated financial infrastructure.

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🍙Onigiri Take

The stablecoin landscape is no longer converging toward a single global model. Instead, it is structurally splitting into two parallel systems:

• Geopolitical & Offshore Rails: A7A5’s rapid rise illustrates how non-USD stablecoins can act as temporary liquidity bridges in sanction-constrained environments. Its subsequent stall confirms that public blockchains, while efficient, remain highly legible to regulators when political incentives align.

• Onshore, Federally Compliant Rails: Tether’s launch of USAT formalises a second path: stablecoins designed explicitly for regulated markets, bank balance sheets, and institutional settlement. Compliance is no longer a constraint—it is the product.

The implication is clear: stablecoins are becoming jurisdiction-specific financial instruments, not universal digital dollars.

🍙Winners & Losers: Institutional Outlook

🍙Under the Hood: From Sanctions Evasion to Federal Settlement Rails

A7A5: Transparency as a Double-Edged Sword

A7A5 demonstrated that non-USD stablecoins can function as high-velocity liquidity bridges—particularly when users seek to move from local currencies into USDT without lingering in easily sanctionable wallets. However, issuance on Ethereum and Tron ultimately exposed flows to coordinated U.S., U.K., and EU action. Volume collapsed not because the technology failed, but because visibility enabled enforcement.

USAT: Stablecoins as Regulated Financial Products

By contrast, Tether’s USAT is engineered for compliance from inception. Issued via Anchorage Digital Bank with reserves and distribution structured alongside Cantor Fitzgerald, USAT reframes stablecoins as on-chain settlement instruments for banks and broker-dealers—closer to digital cash equivalents than crypto assets.

Future Trend
Expect:

• Migration of sensitive flows from public chains to permissioned or semi-private ledgers.

• Regulatory competition to attract compliant issuance hubs.

• Stablecoins increasingly segmented by jurisdiction, use case, and legal wrapper.

🍙Stablecoin ≠ Crypto — From Open Networks to Financial Infrastructure

Stablecoins are no longer merely an application of crypto—they are becoming monetary infrastructure.

• Crypto prioritises permissionless access, composability, and user sovereignty.

• Stablecoins now prioritise settlement finality, compliance, and institutional trust.

A7A5 sits closer to crypto’s geopolitical edge cases. USAT sits firmly within the regulated financial system. Treating them as the same category obscures risk, regulation, and opportunity.

🍙Institutional Risks & Unknowns

1. Liquidity Fragmentation – Jurisdiction-specific stablecoins may reduce global fungibility and increase basis risk.

2. Regulatory Arbitrage Collapse – A7A5 suggests arbitrage windows are shortening as enforcement coordination improves.

3. Custodial Concentration Risk – Onshore models centralise power in a small number of banks and custodians.

4. Policy Reversibility – Federal openness to stablecoins may shift with political cycles.

5. Developer Disincentives – Reduced neutrality may slow open-source innovation in favour of permissioned systems.

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.