SS #18 - ECB's Call for Euro Stablecoins

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Welcome to our 18th edition of the StableScope. A new 2x a week, stablecoin-focused newsletter from Launchy. Given the growth of the vertical, there's an increasing demand for more recurring reporting and curation on stablecoins.

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In Today's Edition:

• Headline: ECB's Call for Euro Stablecoins

• Quick Bites: Bank of Korea Creates Crypto Asset Division Amid Local Stablecoin Momentum

• Yield of the Week: 19.4% APY in avUSD on Avant

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HEADLINE

ECB's Call for Euro Stablecoins

State of play: An advisor to the European Central Bank (ECB) warns that widespread use of U.S. dollar-denominated stablecoins in the EU could undermine the ECB's control over monetary policy, drawing parallels to dollarized developing economies.

• The increased adoption of dollar-backed stablecoins could hinder the ECB's ability to set interest rates and manage the money supply, similar to challenges faced by dollarized economies.

• With USDT and USDC dominating over 80% of the $271.8B stablecoin market (projected to reach $2T by 2028 by Standard Chartered), their continued growth grants the U.S. economic advantages, including cheaper debt financing and global influence.

• To counteract this threat, the ECB adviser suggests bolstering euro-backed stablecoins and emphasizes the crucial role of the digital euro in safeguarding European monetary sovereignty.

What’s Next: Expect intensified efforts to launch the digital euro and potentially tighter EU regulations on non-euro stablecoins, especially for payments, alongside initiatives to boost euro-denominated stablecoin adoption.

Why it Matters: This is critical due to growing geopolitical tensions in digital finance. Dollar stablecoin dominance could erode sovereign monetary control, impacting financial stability and global influence. For crypto, it signals a potential fragmentation of the stablecoin market as regulators prioritize local currency pegs.

Our Take: This presents both challenges and opportunities for crypto, while navigating a fragmented regulatory landscape is a hurdle, it creates a significant opportunity for compliant, innovative euro-backed stablecoins. The race between the digital euro and private euro stablecoins will be pivotal in maintaining Europe's strategic financial standing.

QUICK BITES

• Stable raises $28M seed round.

• Clearpool expands to payments financing.

• Tether posts record $4.9B net profit for second quarter.

• AllUnity launches BaFin-regulated euro stablecoin EURAU.

• Circle says native USDC and CCTP v2 are coming to Hyperliquid.

• Hong Kong releases guidance on strict rules for stablecoin Issuers.

• RD Technologies raises $40M ahead of stablecoin licensing rollout.

• SoFi's crypto plans include staking and borrowing options plus stablecoins.

• Bank of Korea creates crypto asset division amid local stablecoin momentum.

• Falcon Finance claims $10M investment from Trump’s World Liberty Financial.

• Tether giving additional 5,800 BTC to its treasury firm Twenty One ahead of public listing.

• Securitize taps Elixir to make Hamilton Lane's tokenized HLSCOPE fund more liquid via the deUSD synthetic dollar.

• Visa expands stablecoin settlement to include PayPal's PYUSD, Paxos-issued USDG, Circle's EURC, and adds support for Stellar and Avalanche.

YIELD OF THE WEEK

Avant savUSD: 19.4% APY in avUSD

• Avant Protocol offers a multi-tiered stablecoin system: avUSD serves as the base stablecoin (redeemable for USDC but non-yielding), savUSD provides yield through market-neutral strategies, and avUSDx offers increased yields as a Junior Tranche participation.

• Yield for savUSD and avUSDx is generated by Avant's trading partners through market-neutral strategies. savUSD accrues avUSD over time as an ERC-4626 tokenized vault, while avUSDx's exchange rate is determined by a PriceStorage contract.

• Converting yield-bearing tokens back to avUSD involves specific timeframes: unstaking savUSD takes one day (without yield during this period), and converting avUSDx back to avUSD requires a 1 week cooldown period after submitting a burn request.

YieldFi vyUSD: 15.14% APY in stablecoins

• YieldFi is introduced as the first fully on-chain asset management platform, aiming to blend institutional financial rigor with blockchain's transparency and accessibility through various indexed products that invest in blue-chip, yield-generating DeFi strategies.

• The platform offers vyToken, a specialized vault product for yUSD holders, providing simplified access to advanced DeFi strategies like leverage looping and yield farming, thereby enhancing yUSD's capital efficiency for passive income.

• Besides yUSD, users can also deposit USDC, USDT, DAI, lvlUSD, PT_csUSDL_31July2025, and PT_mEDGE_31July2025.

Noon sUSN: 12.63% APY in USN

• Noon Protocol features two core stablecoins: USN, an unstaked 1:1 USD-pegged token that rewards holders with $NOON governance tokens, and sUSN, a yield-bearing staked version designed to capture returns from Noon’s delta-neutral strategies.

• sUSN generates yield as additional USN are minted into its staking pool from successful delta-neutral strategies, increasing its value over time. This yield is further boosted by USN holders who forgo their raw returns in exchange for more $NOON governance tokens.

• Noon can offer significant, long-term $NOON token rewards to USN holders, which in turn boosts sUSN returns. This capability stems from Noon's unique tokenomics, where a substantial 65-80% of the total token supply is reserved for user distribution, having avoided sales to VCs and other investors.

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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.