8th August

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

Several global central banks—including the European Central Bank, the Bank of England, and the Bank for International Settlements—have escalated their warnings about the rapid growth of stablecoins and their potential threat to monetary sovereignty and financial stability. Authorities have raised caution not only about peg deviations—many of which occurred during 2022 and 2023—but also about large-scale stablecoin adoption potentially undermining national currencies. As the supply of private stablecoins could swell to $2 trillion by 2028, this change could mean enhanced US dollarisation and weaker control over domestic monetary policy.

The concern centres on stablecoins gaining prominence through Dollar-pegged tokens like Tether and Circle, particularly in jurisdictions with weaker banking infrastructures. Regulators argue that if citizens transfer substantial economic activity into stablecoin systems, central banks could lose essential command over interest rates and liquidity management—even more so during economic stress periods. Although stablecoins offer a semblance of stability and modern payment convenience, their widespread use challenges the core architecture of traditional finance.

In response, central banks are accelerating research and development of public or hybrid digital currencies—such as the digital euro, digital pound, or tokenised central bank liabilities—that can preserve sovereignty while enabling modern payment systems. These efforts aim to ensure monetary systems remain resilient and responsive in a digital economy.

Going forward, it's likely that national and international regulators will increase scrutiny of stablecoin issuers, insist on rigorous reserve audits, and consider tighter licensing frameworks. We may soon see new rules defining what constitutes an “acceptable” stablecoin while promoting public or regulated alternatives.

In a bid to reinforce its digital finance mandate, the UK Financial Conduct Authority has appointed Anurag Bajaj—former global head of banks and fintechs at Standard Chartered—as a senior adviser to its Payments and Digital Finance Division. With nearly two decades of experience across the US, Europe, and Asia, Bajaj brings deep knowledge of payment infrastructure and regulatory engagement.

Bajaj’s remit includes advising on emerging models such as tokenised deposits, cryptoasset issuance, and regulated stablecoin infrastructure, all of which are central to the UK’s ambition to become a global fintech cluster. His appointment reflects the FCA’s intent to strengthen expertise and provide clearer guidance for innovators and incumbents exploring blockchain-based services.

The move comes shortly after the FCA lifted its ban on retail access to crypto exchange-traded notes (ETNs), signifying a broader acceptance of mature crypto investment products. Now, with enhanced leadership, the FCA appears poised to balance access and protection through smarter regulation that fosters innovation while mitigating risk.

With Bajaj on board, London’s regulators will likely engage more actively with both domestic and global stakeholders, ensuring that the UK’s crypto framework aligns with broader financial stability goals—though industry voices warn that the pace of reform must keep up with international developments.

This week, Alchemy Pay, a prominent provider of crypto payment infrastructure, unveiled plans to develop Alchemy Chain, a blockchain designed to support stablecoin transactions. The chain will roll out in the fourth quarter of 2025 and aims to enable seamless exchanges between global assets like USDT, USDC, EURC, and MBRL. Alchemy Pay also intends to issue its own native stablecoin to expand the ecosystem further.

The introduction of a dedicated settlement chain for stablecoins addresses growing demand for faster, more efficient payments in both traditional finance and DeFi contexts. By building out infrastructure tailored to major stablecoins, Alchemy Pay aims to reduce friction, lower settlement times, and achieve interoperability across disparate networks.

Strategically, Alchemy Chain might become a backbone for merchants, remittance services, and financial apps that rely heavily on stablecoins for cross-border operations. It also may attract liquidity providers and custodial institutions needing a secure, compliant settlement layer with broad token compatibility.

The chain’s launch will be watched closely, since success could make it a reference layer for stablecoin activity—especially if it integrates public blockchain audit tools, enterprise-grade privacy options, and regulatory visibility through built-in compliance modules.

Ride-hailing in Abu Dhabi entered a new era this week as taxis began accepting AE Coin stablecoin as a form of payment—a first for any city globally. Passengers can now pay for cab fares using crypto directly via mobile wallets, thanks to a collaboration between transport and fin-tech authorities.

This real-world application demonstrates how crypto is expanding from online ecosystems into everyday services. AE Coin’s use in public transit reflects growing consumer confidence and institutional willingness to support stable value digital currencies in physical commerce.

The deployment also signals wider support from Abu Dhabi’s regulators, whose licensing of over 650 crypto entities—including exchanges and wallet providers—has created an enabling environment for such innovation. It shows how a pro-tech jurisdiction can adopt digital asset use cases without compromising regulatory control.

If successful, the taxi payment pilot could catalyse broader uptake across hospitality, retail and public transport in the region—offering visitors and residents a seamless digital alternative to conventional money that’s generally not as flexible across borders.

This week’s crypto developments paint a picture of accelerated adoption, deeper regulatory engagement, and broader real-world integration. From central banks ramping up concerns about the growing influence of stablecoins, to the FCA strengthening its leadership with high-level fintech expertise, the regulatory environment is clearly evolving.

On the infrastructure side, Alchemy Pay’s announcement of a purpose-built stablecoin blockchain adds to the momentum behind efficient, global crypto payments. Meanwhile, Abu Dhabi’s move to accept crypto for taxi fares demonstrates how digital assets are moving from speculative instruments to practical payment tools.

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