USDC

September 20 2026

Circle becomes Chelsea FC’s principal shirt sponsor to build USDC brand recognition

BlockWest News Team Crypto Equities, Equities & Markets Chelsea FC, Circle, cryptocurrency sponsorship, stablecoin marketing, USDC

Circle’s partnership with Chelsea FC to feature USDC branding on matchday shirts reveals how stablecoin issuers must build brand recognition through channels outside blockchain technology. The deal underscores a core business reality: Circle’s revenue depends on growing the USDC money supply, since it captures nearly all its income from interest earned on reserve assets that users never see.

Circle announced an agreement with Chelsea FC on August 28 for USDC branding as the club’s principal front-of-shirt sponsor for the 2026/27 season across men’s, women’s, and academy teams.
At the end of June, $73.3 billion of USDC was outstanding; Circle reported $668 million in reserve income for the second quarter out of $701 million in total revenue and reserve income.
The sponsorship serves to build consumer familiarity with the USDC name rather than drive immediate adoption, leveraging football’s emotional engagement where product features cannot.

$73.3B USDC outstanding as of June 30, 2026, representing the reserve base Circle earns yield on.
95% of Circle’s Q2 revenue derived from reserve income rather than transaction fees or other services.
Aug 28 Date Circle announced the Chelsea FC sponsorship deal for the 2026/27 season.
2026/27 Season when gambling companies are removed from Premier League front-of-shirt positions under a voluntary agreement.

Circle announced a partnership with Chelsea FC on August 28 for USDC branding to appear as the club’s primary front-of-shirt sponsor across men’s, women’s, and academy teams for the 2026/27 season, according to CryptoSlate. The deal places a stablecoin designed to maintain a fixed dollar value at the center of one of football’s most recognizable brands, an unusual pairing that reflects how Circle’s business fundamentally depends on growing the circulation of USDC rather than selling a product with inherent excitement or utility.

Reserve Income Accounts For Nearly All Of Circle’s Reported Revenue

USDC is engineered to track the US dollar by backing each token with cash and cash-equivalent assets held largely in US Treasury securities and Treasury-backed lending instruments. According to Circle’s second-quarter 2026 results, the company reported $668 million in reserve income for the period, compared with $701 million in total revenue and reserve income combined, meaning reserve earnings accounted for roughly 95 percent of reported revenue.

Circle’s terms explicitly state that USDC token holders receive no interest and maintain no claim on returns generated from the reserves.

At the end of June, $73.3 billion of USDC was outstanding. A larger money supply translates directly to a larger pool of interest-bearing assets that Circle can deploy, making growth in USDC circulation essential to the company’s financial model. Football sponsorship addresses a challenge stablecoins face that other financial products do not: the product itself generates no emotional or narrative appeal, making traditional advertising difficult.

Building Brand Recognition Where Product Features Cannot

USDC offers stability but not excitement. It promises to remain worth approximately what it is worth today, generating no victory parade or moment of triumph. Bitcoin captured markets through the promise of scarcity; cryptocurrency exchanges compete on trading features and market access. Stablecoins by design offer none of these narratives, leaving marketing primarily dependent on familiarity and trust.

Football shirts create recognition without requiring understanding. A Chelsea supporter watching matches every weekend will encounter the USDC name repeatedly across broadcast coverage, stadium imagery, and social media without needing to understand how Treasury reserves function or how digital currency redemption works. When that same person later encounters USDC in a financial application alongside competing stablecoin options, name recognition alone influences choice. Circle does not require these supporters to open cryptocurrency wallets immediately or become customers on matchday; the goal is simply that the four letters stop looking unfamiliar.

This approach mirrors how traditional sponsors use football to attach themselves to emotionally invested audiences rather than convince those audiences to care about their core product.

Regulatory Oversight And Competitive Positioning In Football Finance

Chelsea is not Circle’s only crypto partner. The club renewed its partnership with BingX, a cryptocurrency exchange serving as training-kit sponsor for the 2026/27 season. The two partnerships place different financial products on different pieces of apparel: one entity promotes trading capability while the other promotes a stablecoin designed to sit at one dollar. Both rely on the same mechanism: the Chelsea badge makes the financial company feel familiar, something neither could easily accomplish through blockchain messaging alone.

The timing aligns with a shift in Premier League advertising standards. Premier League clubs agreed under a voluntary arrangement to remove gambling companies from front-of-matchday shirts beginning with the 2026/27 season, freeing premium advertising real estate at exactly the moment financial and crypto companies compete for global visibility. The UK Financial Conduct Authority flagged the broader question in a July freedom-of-information response, identifying 18 arrangements involving 13 clubs and financial providers without FCA authorization, though the FCA noted this did not automatically indicate illegality and found no evidence of breaches in most cases reviewed. Circle’s sponsorship announcement explicitly states the partnership is not an invitation to buy, hold, or trade crypto, but rather an invitation to recognize the name.

Someone who encounters USDC through football sponsorship still needs to independently research where to purchase it, who holds it, what fees apply, and what protections exist in their jurisdiction.

Making A Stablecoin Forgettable By Making It Everywhere

Circle’s objective for this partnership is not to generate passion for USDC among football supporters. The goal is to make USDC boring enough that it becomes ubiquitous. If someone encounters USDC in a financial application two years from now and reacts the same way they react to Visa, Mastercard, or PayPal—with simple recognition rather than analysis—Circle has succeeded. They will not think about the yields on short-term Treasuries or how reserve assets are redeemed. They will recognize four letters.

What Chelsea offers that a blockchain cannot offer is cultural familiarity. USDC already possesses the technical capability to maintain its dollar peg across networks and applications. Circle’s transparency page shows how the company manages the reserve base that generates the revenue sponsorships like this one are designed to grow. The sponsorship accelerates adoption by shifting the association from a technical feature set to a brand presence, embedding USDC into the fabric of how people encounter financial products.

The BlockWest read. Circle’s business model depends on reserve growth, not on transaction volume or trading fees. The Chelsea deal reveals that for stablecoin issuers, building distribution and consumer trust matters more than technological differentiation. As USDC competes against other dollar-pegged tokens, this sponsorship is a bet that casual recognition converts to preference when users later choose between dollar stablecoins, a dynamic that plays out far from the pitch.

The true test of the partnership’s effectiveness emerges over the next two years as USDC market share is tracked against competing stablecoins and as the FCA’s regulatory position on financial sponsorships in football becomes clearer. Circle has signaled no additional major sports partnerships, leaving open whether the Chelsea deal represents a one-off marketing experiment or the first of a wider strategy to embed USDC branding into global consumer consciousness.

September 12 2026

Digital stablecoins simplify money transfers but face obstacles when it comes time to make purchases

BlockWest News Team DeFi & Web3, Policy, Regulation & Enforcement cryptocurrency, international money transfers, remittances, Stablecoins, USDC

Stablecoins can reduce remittance costs, but the total expense depends on conversion fees and exchange rates that extend well beyond blockchain confirmation times. Recipients’ ability to actually spend or convert the money matters more than transfer speed alone.

Bank of Italy research on $200 USDC transfers found Italy-to-Brazil costs of 2.70% versus 2.21% for the reverse route, showing directional variation.
Recipients can retain stablecoin balances in dollars rather than converting immediately, gaining control over timing and currency exposure.
Total payment cost includes exchange-rate margins, local withdrawal fees, and conversion services that blockchain fees alone do not capture.

2.70% Total cost for USDC transfers from Italy to Brazil on $200
2.21% Total cost for USDC transfers from Brazil to Italy on $200
$72 Annual savings from reducing all-in remittance cost from 5% to 2%
July 2024 Publication date of Bank of Italy research examining stablecoin transfer costs

Stablecoins have attracted attention as a tool for reducing the cost of international money transfers, but their actual utility depends on a chain of transactions that extends far beyond the speed of blockchain settlement. While a stablecoin token can move across networks in seconds, recipients still face the practical work of converting it to usable local currency, accessing cash, or maintaining balances in a digital wallet. A Bank of Italy study published in July examined $200 transfers of USDC across routes between Italy and five partner countries, revealing how the convenience of fast token movement masks a more complex cost picture.

Exchange Rates and Hidden Costs Dwarf Advertised Transfer Fees

The path from euros in a sender’s bank account to reais available for spending in Brazil involves multiple conversion points, each with its own pricing. A sender must fund an exchange, purchase stablecoins, transfer them across the blockchain, and then the recipient must sell those tokens and withdraw proceeds into a local account. The blockchain handles token movement efficiently, but every exchange rate and service along that route carries a cost. Exchange-rate margins and withdrawal fees are often built into quoted prices rather than listed separately, making the true expense invisible until the recipient counts how much local currency actually arrives.

The Bank of Italy data illustrates this with concrete numbers. Italy-to-Brazil transfers cost 2.70% of the $200 amount, or $5.40, while Brazil-to-Italy transfers cost 2.21%, or $4.42. The cheaper direction switches depending on which way money travels because buyers and sellers in each country face different sets of prices and available services. Someone selling USDC in Brazil operates in a different market from someone buying it there, with distinct liquidity, spreads, and redemption options. The same stablecoin route produces meaningfully different outcomes based on direction of payment and local market conditions.

Comparison services like Wise, included in the Bank of Italy analysis, showed 2.20% cost for Italy-to-Brazil transfers and 4.68 percent to 4.89 percent for Brazil-to-Italy, indicating that stablecoin routes can outperform traditional services on some corridors but not universally.

Speed Becomes Irrelevant Without Reliable Conversion Access

A stablecoin can appear in a recipient’s wallet within seconds, but that speed provides no benefit if conversion or withdrawal to spendable local currency requires an additional banking step lasting a day or longer. Recipients who need the funds immediately cannot spend a digital dollar token sitting in a blockchain wallet if their local merchants demand reais. Conversion speed depends entirely on the quality of connection between the exchange holding the token and the domestic payment system where money can actually be used. In markets with well-developed stablecoin infrastructure and fast payment rails, the final conversion step can be painless; in others, recipients face delays that dwarf the blockchain confirmation time.

The standard payment services must meet is not how quickly a blockchain confirms a transaction but whether recipients can use the money for its intended purpose. Recipients in Brazil may have no reason to care which blockchain network carried a token if the proceeds become spendable through an app they already use. Conversely, a technically literate person comfortable holding digital wallets may prefer immediate access to the stablecoin balance itself, choosing to hold dollars and convert when rates suit them. The relevant measure is whether the recipient can perform the action they want next, not whether a public ledger recorded the transfer quickly.

Recipient Choice to Hold Dollars Adds Value Beyond Transfer Fees

Traditional remittance services often require converting the entire transfer amount to local currency immediately, eliminating recipient control over currency exposure. Stablecoins offer an alternative by allowing recipients to convert part of a payment to local currency for immediate expenses while retaining the remainder in dollar form. A household receiving $200 might convert $120 to local currency for the week’s expenses while keeping $80 as a stablecoin balance, protecting that portion against local currency depreciation. This separation of movement and holding decisions gives recipients genuine financial control independent of what the sender prefers or which payment system transfers the funds.

Holding stablecoins introduces its own risks: tokens lack the deposit insurance of bank accounts, depend entirely on issuer reserves and redemption policies, and expose holders to the issuer’s operational security.

Circle, the USDC issuer, operates institutional redemption for large holders while retail users typically buy and sell through exchanges or payment providers. Circle’s EEA redemption policy creates a separate redemption route for eligible European holders, potentially giving households direct access to the issuer even without institutional accounts. For remittance recipients, having redemption rights with an issuer works alongside whatever services they can actually reach, and familiarity with local providers carries economic value. Recipients who know the person behind the counter at a neighborhood exchange can ask for help in real time; relatives using the same app can explain unfamiliar steps. Those relationships save time and reduce errors while sparing senders from becoming unpaid technical support for family members unfamiliar with crypto systems.

All-In Cost Comparison Requires Accounting for Both Directions and Actual Usage

Fee comparisons that show stablecoins as cheaper often exclude the work required from both sender and recipient. New customers must verify identity, fund exchange accounts, and determine which blockchain networks their recipient supports before sending anything. Sending to a wrong address or unsupported network can make recovery impossible depending on who controls the receiving account. Experienced crypto users navigate these steps routinely, while first-time customers need support that advertised transfer prices typically exclude. Conventional remittance services impose different friction: cash collection may require travel and waiting, while account access can depend on documents the recipient lacks.

The relevant financial comparison involves monthly costs accumulated over time. Reducing the all-in cost of a $200 monthly transfer from 5 percent to 2 percent saves $6 per transfer, compounding to $72 annually. That savings comes from the combination of lower fees, better exchange rates, and faster completion, and it matters far more than which payment method delivers it. Comparisons must also account for whether the sender is adding fees on top of a $200 payment or deducting fees from it, which changes the actual amount received. Services that offer both conversion options and token retention allow households to decide how much of a balance to convert while explaining costs before commitment. The payment method that works is the one a household can actually use for what they intend to do with the money.

Payment companies can handle much of the technical work themselves by moving stablecoins between their own accounts and paying out ordinary money through local systems, letting customers choose where to spend while the company handles settlement details. The outcome depends on whether recipients can convert stablecoins to usable local currency at reasonable cost and on timing that matches their cash needs, not on whether blockchain settlement speeds measured in seconds impress technical observers.

September 11 2026

How Circle plans to use $400M to overcome stablecoin obstacles preventing mainstream payments

BlockWest News Team Crypto Equities, DeFi & Web3, Equities & Markets blockchain infrastructure, Circle acquisition, cross-border payments, Stablecoins, USDC

Circle’s $400 million acquisition of Tazapay addresses a fundamental constraint in stablecoin adoption: the ability to convert digital dollars into usable local currency at the point of final delivery. The deal signals that blockchain settlement alone cannot solve cross-border payments without regulated infrastructure connecting stablecoins to banking systems across multiple markets.

Circle will acquire Tazapay for $400 million in Class A stock, adjusted for debt, expenses and cash at closing.
Tazapay processed more than $25 billion in annualized payment volume as of July 31, 2026, with approximately 60 percent involving stablecoins.
The transaction is expected to close in 2027 subject to regulatory approvals, including clearance from Singapore’s Monetary Authority.

$400M Stock consideration for Tazapay acquisition, adjusted for debt and transaction costs
$25B+ Tazapay’s annualized payment volume as of July 31, 2026
100+ Markets where Tazapay supports payout rails and banking connectivity
60% Portion of Tazapay transaction volume involving stablecoins

Circle, the issuer of USDC stablecoin, announced on September 8 that it will acquire Tazapay, a cross-border payments operator, to secure direct control over the infrastructure needed to convert digital dollars into local currency across global markets. The problem Circle is targeting is specific: a stablecoin can settle on a blockchain in seconds but still fail as a payment tool if the recipient cannot convert it into money they can actually spend. Tazapay operates banking and fintech connections across more than 100 markets and works with more than 60 partners to handle currency conversion, local licensing, banking access and fiat delivery. By bringing this last-mile infrastructure inside Circle, the company aims to eliminate the gap between fast onchain settlement and slow or unavailable offchain conversion.

The acquisition reflects a broader shift in how blockchain infrastructure companies are approaching real-world adoption. Early stablecoin proponents envisioned that digital dollars settling on public blockchains would bypass traditional financial intermediaries entirely. In practice, however, the economics and regulatory reality of reaching end-users in different jurisdictions have forced builders to integrate with banking systems rather than replace them. Tazapay’s success in onboarding both crypto-native users and traditional financial institutions suggests that hybrid models combining blockchain efficiency with regulated payout infrastructure may be more viable than purely decentralized alternatives.

Tazapay’s Scale and Stablecoin Integration

Tazapay processed more than $25 billion in annualized payment volume as of July 31, 2026, with approximately 60 percent of that volume involving stablecoins, according to Circle’s acquisition announcement. The operator has been a design partner on Circle’s Payments Network, or CPN, since 2025, positioning it as both a strategic partner and a bottleneck to wider adoption. The company maintains separate licensed entities in different jurisdictions, with stablecoin services provided exclusively through Tazapay Canada while its Singapore entity handles other regulated payment activities.

Tazapay’s structure reflects a core challenge in global payments: regulated permissions, bank relationships and payout capability must be built market by market rather than deployed as a single global system.

The volume metrics also reveal why Circle sees acquisition as preferable to continued partnership. At $25 billion in annualized volume with stablecoins representing 60 percent of the mix, Tazapay is routing approximately $15 billion annually through USDC or other stablecoins. That volume represents both a substantial revenue stream and direct evidence of demand for stablecoin-based settlement in institutional and emerging-market corridors. By acquiring Tazapay rather than licensing its services, Circle gains visibility into customer acquisition patterns, margin capture, and the ability to optimize routing decisions across its broader ecosystem.

Circle’s Two-Sided Payment Architecture

Circle’s current CPN documentation describes two operating modes for stablecoin payments. In the self-managed model, originating and beneficiary financial institutions perform their own compliance checks, currency conversion and customer account management while CPN provides coordination and settlement between them. In a managed mode, Circle handles licensing, custody, compliance, treasury and settlement for customers that want stablecoin payments without holding digital assets themselves.

Tazapay could support either pathway after acquisition. Its existing payout routes might expand partner choices for self-managed payments, while its licensed entities and customer relationships could power a more integrated managed service. Circle has not disclosed which integration path it will pursue or whether Tazapay will serve both models, leaving the operational structure of the combined business undefined until the deal closes.

The choice between these models carries implications beyond technical architecture. A self-managed approach preserves optionality and network effects by maintaining Tazapay’s independence as a service provider accessible to competitors’ stablecoins. A managed approach would tightly bind Tazapay’s infrastructure to Circle’s custody and settlement capabilities, creating stronger competitive advantages but potentially limiting Tazapay’s appeal to customers using other stablecoins or digital assets.

Combining USDC with Tazapay’s banking relationships, local payout rails and institutional customers would accelerate worldwide adoption.

Jeremy Allaire, Circle co-founder and CEO

Regulatory Approval and Open Questions at Closing

The acquisition remains subject to customary closing conditions and regulatory approvals, including clearance from Singapore’s Monetary Authority. Circle expects the transaction to close in 2027, with final share count and consideration dependent on the company’s volume-weighted average closing price over the 20 trading days before completion. Circle has not disclosed Tazapay’s revenue, margins, expected contribution to financial results, integration costs or quantified synergies.

The transaction also leaves unresolved a governance question central to CPN’s design. Circle’s documentation states that the network operator does not hold customer funds, manage accounts or become a party to transactions between independent institutions. Acquiring Tazapay would give Circle ownership of a subsidiary that does perform those functions, creating potential tension between Circle’s role as a neutral network coordinator and its interest in directing volume through its own operating company. Circle has not stated whether Tazapay’s payout routes will remain available on equivalent terms to competitors or whether the subsidiary will receive preferential treatment within CPN routing decisions.

Singapore’s regulatory review will likely focus on Tazapay’s compliance practices, money transmission licensing framework, and customer fund segregation standards. The regulator has taken an increasingly rigorous approach to stablecoin and digital payment infrastructure following prior enforcement actions against unregulated operators. Circle’s established compliance relationships and institutional partnerships may ease approval, though the scope of services Tazapay will continue to offer post-acquisition could become a condition of clearance.

The deal’s impact will become measurable only after integration: if Circle improves payout coverage and execution while preserving participant choice, Tazapay could strengthen CPN as a broader network; if Circle-owned routes receive preferential treatment, the network could shift toward vertical integration and away from the neutral marketplace model described in current CPN governance documents. Circle’s regulatory approvals from Singapore and the timing of any disclosed integration plan will indicate how aggressively the company intends to combine Tazapay’s infrastructure with USDC and CPN operations.

September 5 2026

Central Bank Investigation Shows Stablecoins Could Be Counted Twice in U.S. Money Supply Measures M1 and M2

BlockWest News Team Central Banks & Monetary Policy, Policy Federal Reserve, monetary policy, money supply, Stablecoins, USDC

The Federal Reserve has identified a fundamental accounting challenge that could distort official US money supply measures if stablecoins are incorporated without proper adjustments. The risk of double-counting the same dollars across multiple monetary aggregates threatens the integrity of data that policymakers and economists rely on for critical decisions.

Federal Reserve staff note from September 4 presents a framework for incorporating regulated payment stablecoins into M1 or M2 monetary aggregates.
Double-counting risk arises when stablecoin reserves held in bank deposits or money market funds are already counted in existing monetary aggregates.
The Fed identified three separate accounting tasks that must be completed before stablecoins can be classified in official money supply measures.

$292.1B Global stablecoin market capitalization across 73 assets as of early September
$74.5B USDC market capitalization, roughly one quarter of total stablecoin market
$23.218T US M2 money supply on seasonally adjusted basis for July 2026
71.826B USDC in circulation according to Circle’s July 31 assurance report

A Federal Reserve staff note released on September 4 outlines how regulated payment stablecoins might eventually be incorporated into M1 or M2, the official measures of the US money supply. Currently, stablecoins are excluded from these measures entirely. The analysis reveals that without careful accounting adjustments, the same dollars could be counted twice: once as stablecoin reserves already captured in the money supply, and again as newly added stablecoin tokens.

The staff note represents independent research by Federal Reserve economists and does not constitute official Federal Reserve policy or recommendations for immediate action.

M1 represents the narrowest measure of US money supply, containing currency and highly liquid balances available for immediate transactions. M2 encompasses M1 plus less liquid savings instruments, including small-denomination time deposits and retail money market funds. The Fed’s framework proposes classifying stablecoins based on their actual economic function rather than treating all stablecoins identically, allowing different tokens to fall into different categories depending on usage patterns and reserve composition.

The stablecoin market has grown substantially, with global market capitalization reaching $292.1 billion across 73 different assets by early September, according to industry tracking data. This growth reflects increasing adoption of stablecoins for payments, remittances, and financial transactions, particularly on blockchain networks. As stablecoin usage expands and regulatory frameworks like the GENIUS Act establish clearer requirements for issuer compliance, policymakers face the question of whether and how to incorporate these digital assets into traditional money supply measures.

Incorporating stablecoins into official monetary aggregates could provide more comprehensive and accurate pictures of the money actually circulating in the US economy. However, the Federal Reserve recognizes that hasty integration without proper accounting adjustments risks undermining the reliability of monetary data that guides interest rate decisions, inflation assessments, and broader macroeconomic policy. The framework demonstrates the Fed’s methodical approach to integrating emerging financial technologies into established statistical systems.

How Reserve Backing Creates Double-Counting Risk

The core accounting problem emerges from how stablecoin issuers back their tokens. Under the GENIUS Act, permitted issuers must maintain at least 1:1 identifiable reserves and publish monthly reserve information. Permitted reserves can include bank deposits, Treasury instruments, and government money market funds. When an issuer receives dollars, deposits them in a bank account or money fund, and issues stablecoins backed by those reserves, the Fed identifies the double-counting trap.

Since bank deposits and money-fund net assets are already captured in M1 or M2, adding the stablecoin tokens at face value as a separate line item would count the same dollars twice. The reserve asset would already be measured in the monetary aggregate, while the stablecoin itself would appear as additional money supply. This overlap only occurs with reserve assets already represented in M1 or M2, and the extent of the problem depends on each issuer’s specific reserve composition.

Treasury securities held outside money market funds would not create this overlap problem since they are not already counted in M1 or M2.

Resolving this accounting challenge requires more than theoretical analysis. Regulators would need detailed reporting from stablecoin issuers about reserve composition, updated monthly or more frequently to capture changes in backing assets. This transparency requirement would allow Federal Reserve statisticians to identify which reserve assets are already captured in existing monetary aggregates and calculate net increments accurately.

USDC Reserve Structure Illustrates Accounting Complexity

Circle’s USDC demonstrates the practical challenges involved. According to Circle’s July 31 assurance report, most USDC reserves are held in the Circle Reserve Fund, an SEC-registered government money market fund that holds cash, short-dated US Treasuries, and overnight US Treasury repurchase agreements. The report also lists Treasury securities held outside the fund and cash at regulated financial institutions. The assurance documented 71.826 billion USDC in circulation backed by reserve assets totaling $71.904 billion in fair value.

Calculating the net addition to M1 or M2 requires more than these aggregate figures. A defensible estimate would need to match reported reserve categories against the exact money-stock components already counted, remove only genuine overlaps, and preserve backing assets existing outside the aggregates. The current available sources leave that net increment unquantified, illustrating why the Fed considers this calculation essential before any classification decision.

Other major stablecoins maintain different reserve structures, adding complexity to any framework that would apply universally across issuers. Some reserve significant percentages in commercial paper or corporate securities rather than government money funds, which would create different accounting outcomes. The Fed’s framework must accommodate these structural variations while ensuring consistent treatment across the stablecoin ecosystem.

Geographic Reach and Usage Patterns Complicate Classification

A second major accounting challenge involves geographic boundaries. Dollar stablecoins issued by US-regulated companies can move globally on public blockchains, yet transaction records typically lack sufficient information to identify what portion circulates within the United States. The GENIUS Act applies to US-regulated issuers without distinguishing domestic from international circulation, so additional reporting mechanisms may be required to isolate US circulation from global activity.

The Fed’s functional classification framework also requires evidence beyond raw transaction counts. A Bank for International Settlements working paper analyzing more than 593 million event logs from 141 million Ethereum transactions in 2025 involving USDT, USDC, and PayPal USD found that roughly one-third of transactions generated multiple transfer events, while nearly 60% of transfer events occurred inside complex transactions combining trading, lending, arbitrage, liquidity provision, and settlement. Treating every emitted event as a standalone payment would exaggerate activity counts and overstate the payment role of stablecoins relative to their actual use in consumer and business transactions.

Distinguishing payment activity from financial engineering and speculation requires sophisticated data analysis that goes beyond public blockchain records. Issuers would likely need to provide additional transaction context and customer categorization data to help regulators understand actual stablecoin usage patterns in the US economy.

Three Accounting Tasks Must Precede Any Integration

The Fed staff framework identifies three distinct accounting challenges that must be resolved before stablecoins can be classified in official monetary aggregates. First, analysts must determine how the tokens function economically through transaction-level analysis and usage patterns. Second, they must consolidate reserve assets already represented in existing aggregates to identify and remove overlaps. Third, they must isolate the circulation relevant to the United States, separating domestic holdings from global activity.

Stablecoins could eventually make M1 or M2 more complete measures of the money supply, but improper adjustments would distort the accuracy of official monetary data that policymakers and economists rely on for critical decisions.

Each task involves methodological decisions that will significantly affect the final count of stablecoin-based money added to official aggregates. The Fed’s deliberative approach reflects the high stakes involved, given the importance of accurate money supply data for Federal Reserve policy decisions and public economic assessment.

The Fed has not announced a timeline for completing this accounting work or a date when stablecoins might be incorporated into official monetary aggregates, leaving open the question of when these three tasks will be formally addressed and what reporting requirements regulators may impose on stablecoin issuers to support the classification effort.