Stablecoins: rising profits, a licensing win, and one uncomfortable stress test

Stablecoins can be viewed from two angles at once right now: rising profits and regulatory recognition on one side, the first cracks in the market and an uncomfortable reality check from an independent stress test on the other. Here's both sides in one place.

The good news: profits and licenses

Let's start with the money: Tether made $1.5 billion this quarter, though its safety reserve buffer got cut in half in the process — the profit growth didn't come without a tradeoff.

Circle, meanwhile, notched regulatory progress: the company won a New York trust charter and now holds bank status at both the federal and state level — a rare double recognition for a stablecoin issuer.

And on the real-world usage side: Hyundai Card moved money via stablecoins in just 7 minutes, a clear demonstration of the speed the technology promises.

The less comfortable side

But not everything is growing: the entire stablecoin market's cap fell for the first time since 2023 — a sign that demand for the instrument doesn't only grow in a straight line, and can reverse too.

The most sobering check came from a regulator: the Bank of Italy ran 200 real USDC transfers across 10 corridors and found the bottleneck isn't the blockchain itself, but converting to and from local currency on both ends of the transfer.

If stablecoins could be spent directly in the real economy, for goods and services, rents, or school fees, without reconversion into local fiat currency, the economic advantages of stablecoin-based transfers would be substantially higher.

What it all adds up to

The gap between "the blockchain's speed is impressive" (as in the Hyundai Card example) and "real savings depend on local infrastructure" (as the Bank of Italy showed) is exactly the gap the industry hasn't closed yet. We've previously covered, in general terms, why crypto that never rises in price is useful at all — and that functional usefulness, not market-cap growth, remains the strongest case for stablecoins, even while the market temporarily shrinks.

Nothing here should be taken as financial advice — just information to consider.