Stablecoin Surge Unleashed: Wyoming Launches First State-Backed Digital Dollar

In a week where traditional finance and crypto continue their intricate dance, we're witnessing nothing short of a paradigm shift. A $2 trillion bank quietly doubles its Bitcoin exposure while Basel Committee regulators—once crypto's most formidable skeptics—reconsider their stance on the $3 trillion digital asset class. Meanwhile, Wyoming launches the first state-backed stablecoin across seven blockchains as Chainlink channels millions in enterprise revenue on-chain.

The institutional crypto narrative isn't just evolving—it's accelerating.

In today's issue, we unpack the regulatory pivot at the Fed, track the DeFi reset that's transforming yield strategies, and reveal why Jackson Hole might matter more for Bitcoin than for bonds.

As always, feel free to send us feedback at [email protected].

Wall Street’s crypto courtship is no longer a rumor—it’s a quarterly ritual, and the regulators are finally RSVP’ing.

A $2 trillion bank is now doubling its Bitcoin $BTC.X ( ▲ 0.63% ) exposure every quarter, while the Basel Committee—guardian of $144 trillion in global capital—reconsiders its once-draconian stance on digital assets. “We stand at a crossroads,” Federal Reserve Vice Chair Michelle Bowman declared at the Wyoming Blockchain Symposium, urging regulators to “seize the opportunity to shape the future” or risk irrelevance. Her call for a “principled approach” is echoed by the SEC’s recent pivot: Chair Paul Atkins now concedes not all tokens are securities, hinting at a more nuanced regulatory regime.

On the ground, states like Wyoming are racing ahead, launching the first state-backed stablecoin (FRNT), fully collateralized and live across seven blockchains. Meanwhile, institutional infrastructure is quietly transforming. Chainlink’s new LINK $LINK.X ( ▲ 1.5% ) Reserve channels $1 million per week in enterprise revenue on-chain, with major players—JPMorgan, SWIFT, UBS—now relying on its data and tokenization rails. “The biggest focus for the industry today is how do we bridge trillions of dollars sitting in TradFi to the on-chain world,” says Chainlink’s Johan.

Institutions now account for 75% of Coinbase’s trading volume, according to David Duong, with Digital Asset Treasury companies amassing 2 million ETH $ETH.X ( ▲ 0.12% ) in just two months. The professionalization of staking and the SEC’s softened stance on yield are opening new doors for compliant participation.

DeFi’s next act is less about wild yields and more about building the financial backbone for a digital-first world.

After a period of exuberant experimentation, DeFi protocols are settling into their role as the plumbing for global capital flows. $16–17 billion in crypto lending—down from the 2022 peak—signals a market that’s maturing, not retreating. “DeFi went from less than $100 million to $200 billion in, like, what, three years? Crazy speed,” notes Sergey Nazarov of Chainlink, underscoring the sector’s breakneck ascent and the inevitability of institutional liquidity.

Stablecoins are the new kingmakers. USDC’s $3 billion surge in a single week and projections of a 5–10x market cap expansion over five years point to a future where dollar-backed tokens are the default settlement layer. Circle and Stripe are now launching their own EVM-compatible chains, while Wyoming’s FRNT stablecoin—live on seven blockchains—hints at a coming wave of state and corporate entrants. “Most merchants don’t know how to deal with crypto. They just want real US dollars. That’s why Stripe is probably my pick,” says Phantom’s Brandon Millman, highlighting the battle for distribution.

Yield, meanwhile, is evolving. With Aave $AAVE.X ( ▲ 1.79% ) utilization rates at 95% and looping strategies less lucrative, protocols are pivoting to real-world assets and structured products. Digital asset treasuries have quietly accumulated over 2 million ETH in two months, while institutional flows now account for 75% of Coinbase’s volume. “Retail has incrementally started stepping in... I believe that’s going to happen starting in September. Probably a big part of it, the big catalyst will be rate cuts,” observes Coinbase’s David Duong.

Regulatory winds are shifting, too. U.S. policymakers are moving from adversarial to collaborative, with new legislation and state-backed stablecoins on the horizon. The next phase will be defined by those who can deliver security, interoperability, and user-centric design—at scale.

The DeFi reset isn’t a retreat; it’s a recalibration. As stablecoins become the rails and yield strategies mature, the winners will be those who can bridge capital, compliance, and code.

Crypto’s speculative engine is shifting gears, as meme coin mania gives way to a new wave of prediction market innovation.

After a year of viral launches and dizzying returns, meme coins are showing signs of fatigue. Market cap has slipped 20%—from $85B to $67B—as even dominant launchpads like PumpFun (now holding 80%+ market share and $2B in reserves) struggle to sustain the hype. “People aren’t bored of meme coins—they’re bored of the same game,” says Fish, founder of TokenMill, whose latest launch sold out 20,000 units in under a minute despite offering no rewards. The appetite for novelty is undiminished; the format, less so.

Enter prediction markets. Platforms like Polymarket and Kalshi are posting record volumes, with Polymarket now the world’s largest sportsbook by flow. The sector’s appeal is twofold: transparent odds and the “wisdom of crowds” effect, which, as Parag notes, “spits out the truth and breaks false narratives.” The Robinhood–Kalshi partnership is a watershed, likely to force the hand of incumbents like Binance and Coinbase. Yet, liquidity remains a sticking point—whales still move markets, and UX lags behind the addictive simplicity of meme coin apps.

The broader context is a “gambling supercycle,” as younger investors, squeezed by stagnant wages and asset inflation, chase asymmetric upside through high-risk, high-reward bets. “We’re only in the first inning of media integration,” says analyst John Wang, predicting a future where prediction odds run live on CNN and CNBC.

The next phase of crypto speculation will be defined by platforms that blend meme coin virality with the utility and stickiness of prediction markets—turning fleeting hype into enduring engagement.

The world’s central bankers are gathering at Jackson Hole, but this year, the real action is in the shadows—where fiscal dominance, political pressure, and $7.3 trillion in sidelined cash are rewriting the rules for risk assets.

For over a year, the Fed has held rates at 5.5%, with inflation stubbornly above 3% and the market pricing in an 80%+ chance of a cut in September. Yet, as macro analyst CJ warns, “If the Fed lowers interest rates and the two year and ten year again do not participate and maybe even mortgage rates go up higher, we can have an even bigger issue on our hand… So no matter which way we go, you gotta hold Bitcoin.” The old playbook—rate cuts spark rallies—looks increasingly threadbare as long-term yields decouple from Fed policy, and fiscal deficits, not monetary levers, drive liquidity.

The stakes are amplified by a record $7.3 trillion in U.S. money market funds, much of it institutional “dry powder” poised to rotate into risk assets. David Duong of Coinbase sees a constructive setup: “Once those Fed rate cuts start to happen, they're gonna say, well, money market funds are not gonna pay me what I wanna get paid here… many of the institutions are still probably gonna be in the larger cap names like your Bitcoin, your ETH, maybe your SOL.” But the timing is fraught—political pressure is mounting, Powell’s tenure is ending, and the market is bracing for a regime shift.

Meanwhile, regulatory winds are shifting. Fed Governor Michelle Bowman is urging a technology-forward approach, with Wyoming’s FRNT stablecoin debuting as the first state-backed, multi-chain token. Yet, entrenched opposition in Congress keeps comprehensive crypto legislation elusive.

The macro transmission is breaking down, but for crypto, that’s both risk and runway. As the Fed’s grip loosens and fiscal forces take center stage, digital assets may be poised to claim their place as both risk-on darlings and safe haven outliers.

Zero-knowledge proofs are quietly remapping the boundaries of blockchain scale, privacy, and trust.

Ethereum’s ETH Proofs project now tracks 32+ ZKVMs, benchmarking real-time proving at just $0.01 per block—a cost that’s falling fast. “The only way that we can get to giga gas L1 is by having this diversity of real-time ZKVMs,” says Justin Drake, the Ethereum Foundation’s ZK lead. The vision: 10,000 TPS on L1, 10 million TPS across L2s, and a future where proofs, not re-execution, anchor consensus.

Hardware is the new arms race. GPUs, supercharged by AI demand, currently dominate ZKP proving, but ASICs and bespoke “ZPUs” are on the horizon, promising another 10x efficiency leap. Succinct’s proof token, debuting at a $1.5B FDV, signals that prover networks are moving from public goods to investable infrastructure.

Chainlink, meanwhile, is extending ZKP guarantees to oracles and off-chain data, a move Sergey Nazarov calls “mathematically and technically driven hyperautomation.” The goal: make value as frictionless as information, and bridge the hundreds of trillions in TradFi to on-chain rails. “Doing financial stuff should be as straightforward as browsing the Internet,” adds Chainlink’s Johan.

ZKPs are no longer a science project—they’re the backbone of a new, auditable, and institution-ready blockchain stack. The next wave of adoption will be built on proofs, not promises.

Disclaimer: The information provided in this newsletter is for informational purposes only and should not be considered investment advice. Cryptocurrency investments are speculative and involve significant risk. Please conduct your own research and consult with a financial professional before making any investment decisions.