30th May

You can read last week's “This week in crypto” here.

Major US banks are cautiously exploring expansion into cryptocurrencies, spurred by more favourable regulatory signals under President Donald Trump's administration, which has pledged to promote crypto adoption. Despite ongoing hesitations around evolving regulations and anti-money laundering rules, banks like JPMorgan Chase, Bank of America, Morgan Stanley, and Charles Schwab are examining limited engagements such as spot trading, custody partnerships, and issuing stablecoins.

However, top figures like JPMorgan CEO Jamie Dimon remain sceptical, citing concerns about misuse and volatility in the crypto ecosystem. Regulators such as the Office of the Comptroller of the Currency and the SEC have rolled back previous restrictions, boosting confidence for banks to initiate pilot projects and strategic partnerships. Still, banking leaders stress the need for clearer and consistent guidelines across all oversight bodies before fully committing to digital assets.

In a related development, major US financial institutions, including Bank of America, JPMorgan Chase, Citigroup, and Wells Fargo, are reportedly collaborating on creating a "digital dollar" through a stablecoin tied to the US dollar. This move coincides with the US Treasury's decision to cease penny production by 2026 due to high manufacturing costs. The new stablecoin would operate through existing transaction networks like Zelle and The Clearing House, aiming to establish a more regulated and secure digital payment system.

On May 28, 2025, Pakistan's Minister of Crypto and Blockchain, Bilal Bin Saqib, announced the country's plan to establish a national Bitcoin reserve. The government intends to hold Bitcoin in a national wallet without plans to sell the assets, signalling a long-term commitment to digital currency. This initiative is part of a broader strategy that includes allocating 2,000 megawatts of electricity to support Bitcoin mining and artificial intelligence data centres.

The establishment of a national Bitcoin reserve positions Pakistan as a proactive player in the global cryptocurrency landscape. It reflects a growing trend among nations to integrate digital assets into their financial systems, potentially influencing economic policies and international trade dynamics.

In addition to the reserve, the government has allocated 2,000 megawatts of surplus electricity for Bitcoin mining and AI data centres. This move is part of a broader strategy to leverage Pakistan's energy resources for technological advancement and economic growth. The PCC, led by Finance Minister Muhammad Aurangzeb and CEO Bilal Bin Saqib, is working closely with international partners, including Binance co-founder Changpeng Zhao, who serves as a strategic adviser.

India is poised to release a discussion paper in June 2025, proposing potential policy frameworks for crypto assets. This move comes as digital currencies gain broader acceptance globally, influenced by the supportive stance of the US administration towards cryptocurrencies. The Indian government aims to approach the matter prudently without making any hasty decisions, according to sources familiar with the development.

The discussion paper is expected to draw from the synthesis paper prepared by the International Monetary Fund (IMF) and the Financial Stability Board (FSB), while seeking opinions on practices being adopted by various jurisdictions. This structured approach reflects a significant policy shift in light of the changing international outlook, most notably the US turnaround on digital currencies.

India's crypto industry has been lobbying the government for tax reductions to revive domestic trading, which has declined due to high taxation introduced in 2022—a 30% capital gains tax and a 1% transaction levy. More than 90% of Indian crypto trading has since shifted overseas. The industry's renewed optimism follows US President Donald Trump's support for digital currencies, which has seemingly softened New Delhi's stance.

While the Reserve Bank of India remains cautious, its tone has moderated under new leadership. Despite a lack of tax relief in recent budget announcements, industry leaders remain hopeful about future regulation and public perception changes, especially among affluent young Indians increasingly drawn to crypto investments.

In a significant move, Tether, the issuer of the leading stablecoin USDT, has acquired a 70% stake in Adecoagro, a prominent Latin American agriculture and energy firm. This acquisition aims to integrate stablecoins into commodity trading, reflecting a strategic shift towards real-world use cases for stablecoins in global trade. By embedding stablecoins into the commodity sector, Tether seeks to streamline transactions and enhance efficiency in the trading of agricultural and energy products.

This development underscores the growing influence of stablecoins beyond the realm of digital assets, highlighting their potential to revolutionise traditional industries. The integration of stablecoins into commodity trading could lead to increased transparency, reduced transaction costs, and faster settlement times, benefiting both producers and consumers.

Tether's investment also signals a broader trend of stablecoin issuers seeking to diversify their portfolios and establish a foothold in various sectors of the global economy. As regulatory frameworks for stablecoins continue to evolve, such strategic investments may pave the way for wider adoption and acceptance of digital currencies in mainstream financial activities.

However, this move also raises questions about the regulatory oversight of stablecoins and their role in traditional markets. As stablecoin issuers like Tether expand their reach, regulators may need to reassess existing frameworks to ensure consumer protection, financial stability, and compliance with anti-money laundering standards.

This week in crypto, in the US, major banks are cautiously exploring cryptocurrency services, including the potential launch of a joint stablecoin, amid evolving regulatory landscapes. Pakistan announced the establishment of its first government-led Strategic Bitcoin Reserve, signalling a long-term commitment to digital assets. India is preparing to release a discussion paper in June 2025, proposing potential policy frameworks for crypto assets, reflecting a shift influenced by global trends. Meanwhile, Tether acquired a 70% stake in Latin American agriculture and energy firm Adecoagro, aiming to integrate stablecoins into commodity trading and expand their real-world applications. These developments underscore the accelerating integration of cryptocurrencies into mainstream finance and governance.

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