Onigiri Weekend Digest: Institutional Lens #42

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Happy weekend from Onigiri!

This week’s headlines capture two very different approaches to stablecoin competition. 

Recap on the two headliners this week:

SS #115 - Samsung, Dunamu Deny OUSD Consultation 

SS #116 - USDC Widens Lead Over USDT 

In South Korea, the proposed OUSD consortium is facing questions over whether several high-profile companies publicly identified as participants had actually committed to the initiative. Samsung Electronics, Dunamu, Shinhan Bank, and Kbank have each indicated that their involvement was either preliminary, undefined, or not formally agreed.

Meanwhile, USDC continues to consolidate its position as the stablecoin of choice for regulated institutions. Visa’s adjusted stablecoin volume reached US$1.79 trillion in June, with USDC accounting for approximately 70% of first-half 2026 volume compared with USDT’s 25%.

Taken together, the lesson is increasingly clear: institutional stablecoin adoption will not be won through the longest partner list or the most ambitious consortium announcement. It will be won through credible commitments, regulatory compatibility, operational integration, and repeatable distribution. 

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🍙 Onigiri Take

The stablecoin market is entering a phase where issuance technology matters less than the ability to secure trusted distribution.

OUSD appears to be attempting a consortium-led model, bringing together payment networks, banks, asset managers, technology companies, and digital-asset platforms. In theory, such a structure could spread economic benefits across the network and create broader incentives than the issuer-retained reserve income models used by Tether and Circle.

However, a consortium is only valuable when participation is explicit, responsibilities are defined, and economic incentives are enforceable. A long list of recognisable institutions creates initial visibility, but it can also create significant reputational risk when listed participants publicly dispute the nature of their involvement.

USDC, by contrast, is benefiting from a less visible but more durable form of endorsement: banks and financial institutions are actually building services on top of it.

Standard Chartered and BNY adopting USDC infrastructure is more meaningful than another memorandum, exploratory discussion, or ecosystem announcement. Each live integration strengthens USDC’s position as a common settlement layer and reduces the incentive for the next institution to build its own stablecoin stack.

This suggests the market is beginning to separate into two broad rails:

• USDC as the regulated institutional settlement rail, optimised for compliance, banking integrations, enterprise payments, and tokenised finance.

• USDT as the global liquidity rail, retaining strength in exchanges, emerging markets, offshore trading, and crypto-native settlement.

The market may not converge around a single winner. Instead, stablecoins are becoming specialised according to user type, regulatory perimeter, geography, and transaction purpose.

🍙 Winners & Losers: Institutional Outlook

🍙 Under the Hood: Stablecoin Moats Are Moving From Issuance to Institutional Default

The core technology required to issue a fiat-backed token is increasingly commoditised. The more difficult challenge is becoming the default asset embedded across regulated financial infrastructure.

USDC’s recent growth illustrates how that default position is created.

When a bank integrates USDC into custody, payments, treasury, collateral, or tokenisation services, it does more than generate short-term transaction volume. It embeds USDC into operating procedures, compliance controls, legal agreements, liquidity arrangements, and customer workflows.

These integrations create substantial switching costs. Once an institution has approved a stablecoin through legal, risk, technology, and compliance processes, adding another issuer may provide limited marginal benefit.

This produces a compounding distribution advantage:

1. Banks prefer stablecoins already accepted by other regulated institutions.

2. Enterprises prefer assets supported by their banking and custody providers.

3. Developers build around the assets with the widest institutional connectivity.

4. Liquidity providers concentrate capital where transaction demand is deepest.

5. New institutions adopt the rail requiring the least additional approval work.

USDC’s approximately 70% share of first-half 2026 adjusted volume therefore matters beyond the headline number. It suggests that economic activity is increasingly concentrating around a stablecoin designed to meet institutional expectations.

However, this does not imply that USDT is becoming irrelevant.

USDT continues to benefit from deep exchange liquidity, broad international recognition, extensive peer-to-peer usage, and strong distribution across markets with limited access to US dollar banking. Its advantage is particularly durable where users prioritise availability and liquidity over direct integration with regulated financial institutions.

The more probable outcome is functional bifurcation rather than winner-takes-all consolidation.

USDC may dominate regulated financial applications, while USDT remains the preferred instrument for offshore liquidity, trading, remittances, and dollar access in emerging markets. Regional stablecoins may then develop within specific domestic banking, regulatory, or payment ecosystems.

OUSD is attempting to create a fourth model: a broadly shared network in which commercial benefits are distributed among ecosystem participants.

The concept has strategic merit. Circle and Tether retain a large proportion of the economics generated from reserve assets. A consortium structure could theoretically redirect some of that value toward banks, payment networks, distributors, and commercial partners.

Yet sharing economics does not automatically create adoption. The consortium must still answer several difficult questions:

• Which members have entered binding agreements?

• Who is responsible for issuance, reserves, compliance, and redemption?

• How will revenue be allocated among participants?

• What obligations must members fulfil to receive economics?

• Who bears liability if the stablecoin experiences operational or regulatory failure?

• Which institutions will provide actual distribution rather than advisory support?

Until these questions are answered, OUSD risks being interpreted as a large ecosystem announcement without a sufficiently defined operating model.

🍙Stablecoin ≠ Crypto — Adoption Is Moving From Narrative to Financial Plumbing

The widening gap between USDC and USDT in adjusted economic volume reinforces an important distinction: stablecoins are no longer simply a subset of the crypto market.

Crypto-native adoption was historically driven by exchange liquidity, market-making, decentralised finance, and access to digital dollars. Institutional adoption is driven by an entirely different set of requirements:

• legal enforceability;

• clear reserve ownership;

• predictable redemption;

• regulated custody;

• transaction monitoring;

• accounting treatment;

• operational resilience;

• integration with existing financial systems.

This is why banks may choose to build on an existing stablecoin rather than launch their own.

A proprietary bank stablecoin can offer greater control, but it also requires the institution to develop reserve management, token infrastructure, redemption processes, blockchain support, smart-contract controls, distribution partnerships, and liquidity from the ground up.

Integrating USDC allows banks to focus on the layer where they retain the strongest advantage: customer access, regulated accounts, compliance, credit, treasury services, and institutional trust.

Stablecoins are therefore becoming less visible to the end user even as they become more important to financial infrastructure.

The long-term winner may not be the stablecoin with the strongest consumer brand. It may be the stablecoin that becomes embedded beneath bank deposits, payment platforms, tokenised funds, trading venues, treasury systems, and cross-border settlement services.

That transition also changes the nature of competition. Issuers are no longer competing only against one another. They are competing to become the common monetary layer connecting banks, blockchains, asset managers, fintech platforms, and enterprises.

🍙 Institutional Risks & Unknowns

1. Partnership Inflation: The OUSD controversy highlights the risk of treating exploratory discussions as confirmed institutional participation. Investors and counterparties should distinguish between firms that are reviewing a project, signing non-binding agreements, conducting pilots, integrating technology, providing capital, and committing to distribution. 

2. Concentration Around a Single Institutional Rail: USDC’s growing institutional share improves standardisation but may also create concentration risk. Financial institutions could become increasingly dependent on a single issuer, reserve structure, technology stack, and regulatory framework.

3. Adjusted Volume Does Not Equal Commercial Revenue: Visa’s adjusted data attempts to remove exchange transfers, bot activity, and other non-economic transactions, making it more useful than raw blockchain volume. Nevertheless, transaction volume alone does not reveal issuer revenue, customer concentration, payment margins, redemption behaviour, or the sustainability of underlying demand.

4. USDT’s Institutional Response: USDT remains significantly larger by circulating supply and exchange liquidity. The key question is whether Tether will expand its regulated bank partnerships, introduce more institution-specific products, or continue prioritising emerging-market and crypto-native distribution.

5. Consortium Governance and Liability: A large consortium can distribute influence but also dilute responsibility. OUSD will need to establish who controls reserve policy, approves participants, manages compliance, handles redemptions, and assumes liability during disputes or failures.

6. Fragmentation Across Regulatory Regimes: As more countries develop domestic stablecoin frameworks, institutions may face a growing number of regulated but non-interoperable assets. The next major infrastructure opportunity may therefore lie in interoperability, liquidity routing, and compliance orchestration rather than another standalone stablecoin.

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.

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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.