SS #35 - Shanghai Center Signals China's Global Payments Challenge

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Happy Friday, and welcome to the cusp of Q4!

Good morning, and welcome to the close of September as we look ahead to the start of Q4. The stablecoin sector ended the month on a strong note, registering ~5% growth in total supply amidst a flurry of significant developments.

As the financial landscape shifts, China has finally made its bold move. The nation is actively pursuing global adoption of its sovereign digital currency, the digital yuan (e-CNY), by launching an international operations hub in Shanghai. This initiative is designed to fundamentally streamline cross-border payments and marks a clear shift in focus after weeks dominated by news from the US and European markets.

Meanwhile, the conversation surrounding Tether continues to escalate. Reports indicate the company is seeking $20B in a funding round that would value it at $500B, with prominent investors like Ark Invest and SoftBank reportedly showing interest. Whether this is another signature move by SoftBank's Masayoshi Son remains to be seen. Rest assured, Stablescope will bring you all the critical updates on stablecoin industry twice a week, every week.

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In Today's Edition:

• Headline: Shanghai Center Signals China's Global Payments Challenge

• Quick Bites: Tether’s Potential $20B Funding Round Could Draw Softbank, Ark as Backers

• Yield of the Week: 323.48% APY on Euler

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HEADLINE

Shanghai Center Signals China's Global Payments Challenge

State of play: China is actively pursuing the global adoption of its sovereign digital currency by launching an international operations hub for the digital yuan (e-CNY) in Shanghai to streamline cross-border payments.

• The People’s Bank of China (PBOC) has formally inaugurated an e-CNY international operations center, creating the core infrastructure for the digital currency’s global integration.

• The stated aim is to enhance settlement efficiency and provide a more efficient, inclusive, and open global system, a move framed by the PBOC as a "historical inevitability" in payments innovation.

• This aggressive push for a state-controlled CBDC is occurring simultaneously with China’s decision to apply regulatory brakes on real-world asset (RWA) tokenization efforts in Hong Kong.

What’s Next: The PBOC will rapidly target foreign banks and trade partners for e-CNY trade settlement pilots, significantly boosting the digital yuan's international utility and directly challenging the dollar's dominance in bilateral transactions.

Why it Matters: This is a major escalation in the global CBDC race, creating a state-backed rival to decentralized stablecoins and pressuring Western central banks to urgently expedite their own digital currency initiatives to preserve monetary sovereignty.

Our Take: The Shanghai center is a geopolitical move. DeFi builders can create privacy-enhancing bridges over the centralized e-CNY, while international businesses must prepare for a future of fragmented global finance segmented along non-dollar settlement rails.

QUICK BITES

• Citi says stablecoin market could reach $4T by 2030.

• Cloudflare plans to launch stablecoin called NET Dollar.

• Notabene introduces platform for stablecoin payments.

• Revolut weighs $75B dual listing in London and New York.

• Plasma goes live introducing XPL token and DeFi integrations.

• Circle examines ways to reverse transactions to counter fraud, disputes.

• PayPal taps Spark to boost PYUSD liquidity by $1B through defi lending.

• Tether's potential $20B funding round could draw SoftBank, Ark as backers.

• Allunity and Stripe’s Privy join forces to enable euro stablecoin payments.

• Maple Finance to tie into Elwood to bring institutional credit strategies on-chain.

• UK banks to pilot tokenized sterling deposits as lenders explore programmable payments.

• Wormhole co-founder says Tether and Circle are ‘printing money’ but competition is coming.

YIELD OF THE WEEK

Euler hwHLP/USDC: 37.83%-323.48% APY

• Euler enables leveraging hwHLP as collateral, borrowing USDC up to 9.98x to maximize yield.

• With a max LTV of 90%, the liquidity in this pool is up to $1.27M.

• Users can either borrow USDC against hwHLP collateral or utilize leverage to long hwHLP and short USDC.

Gearbox mRe7YIELD: 18.98%-178.83% APY

• Gearbox permits users to deposit Midas assets (mBASIS, mRe7YIELD, mTBILL) and USDC to borrow USDC from Re7, thereby facilitating a strategy for maximizing yield.

• The platform offers leverage up to 10.59×. Associated risk management parameters include a 4% liquidation premium and a 0.01% liquidation fee.

• Users must be aware that the deposited assets have delayed withdrawal functionality and utilize a fundamental oracle. Additionally, closing a leveraged position may lead to high price impact or necessitate the use of extra capital.

Jupiter JLP Pool: 29.36% APY

• The Jupiter Liquidity Provider (JLP) Pool serves as the essential liquidity source and counterparty for traders, lending tokens required to open leverage positions on the platform.

• The value of the JLP token is derived from a basket of assets (SOL, ETH, WBTC, USDC), the aggregate profit and loss of traders, and a share of 75% of all generated trading, borrowing, and impact fees.

• The token's APY is calculated solely based on the 75% share of fees from perpetual trading, excluding asset appreciation and trader PnL. This APY has recently shown a significant increase, nearly doubling since the start of the month.

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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.