Stablecoin

Dubai's DFSA has updated its Crypto Token Regulatory Framework, enforcing a ban on privacy tokens and related tools across the DIFC from Jan. 12. Stablecoins must now be fiat-pegged and backed by high-quality, liquid reserves, while algorithmic designs like Ethena are excluded from the stablecoin category. Token approval decisions are shifted to licensed firms, which must assess and document the suitability and compliance of assets they list.

Venezuela now relies on Tether USDT for settlements and everyday transfers as sanctions restrict access to international banking. State oil producer Petróleos de Venezuela routed payments through intermediaries that convert proceeds into USDT, and households use stablecoins for remittances, wages, savings, and peer-to-peer transactions.

On Sunday, a user known as Captain Bunny said OKX froze around $40,000 in USDG stablecoins across four accounts that had been bought and were verified under other people's identities, funds he claimed were needed for his father's medical care. On Monday, OKX founder and CEO Star Xu defended the decision, citing strict KYC and AML duties and outlining conditions under which the platform might still assist the user in withdrawing the assets.

Coinbase is warning it may pull its support for the US Senate's digital-asset market structure bill if lawmakers expand restrictions on stablecoin rewards beyond disclosure rules ahead of the January 15 markup. Banking industry groups are pressing for broader yield curbs than those in the GENIUS Act, while Coinbase argues that platform-based incentives, which it shares via USDC interest income and a 3.5% rewards offer on Coinbase One balances, are a critical revenue source and strategic tool for maintaining dollar dominance.

In February 2025, South Korea's FSC set a three‑phase plan and is now moving to end a nine‑year corporate crypto ban. According to a local media report, new guidelines let listed companies and professional investors trade top‑20 tokens on five major exchanges with an annual cap of 5% of equity capital. The final phase could open access to roughly 3,500 entities while stablecoin eligibility remains under review.

Tether froze roughly $182 million in USDT within 24 hours on Jan. 11, targeting five Tron wallets with balances from about $12 million to nearly $50 million. The tokens were locked at the contract level. Since 2023, over $3 billion has been frozen, and stablecoins now dominate illicit-activity metrics.

Early-2026 instability in Venezuela and Iran has underscored the dual use of USDT: a hedge for residents against inflation and banking risk, and a channel allegedly used by sanctioned actors. Dec. 5 data indicates Tether blacklisted about $3.3 billion from 2023 to late 2025, while since 2023 a network linked to Iran's IRGC moved over $1 billion in stablecoins.

On 12 January 2026, Coinbase signaled it could withdraw support for a forthcoming U.S. crypto market structure bill if it imposes strict limits on stablecoin rewards for users. The exchange argues that proposals reserving rewards for licensed banks would undercut a key revenue stream tied to USDC interest and disadvantage non-bank crypto platforms. The dispute has reopened divisions in Congress and may jeopardize the broader legislation's progress.

Vitalik Buterin said in a post on X on Sunday that Ethereum needs more resilient decentralized stablecoins, highlighting risks from USD pegs, oracle attacks, and staking incentives. He floated reducing staking yields to around 0.2% and redesigning staking to avoid slashing, while the stablecoin market reached $311.5 billion in 2026.

On January 12, the Financial Services Commission of South Korea ended a nine year prohibition, permitting listed companies and registered professional investment institutions to gain crypto exposure. The framework caps allocations at up to 5% of net assets into the top 20 tokens and affects about 3,500 entities, with exchanges required to apply staggered execution and size limits. Uncertainty around stablecoin classification may influence corporate participation.