In The Stables: Paxos Error Highlights Fragility in Issuance Systems
Key Insights
Introduction
Welcome to In The Stables, a weekly briefing on the most important developments shaping the global stablecoin ecosystem. Each week we give timely coverage of regulatory shifts, market structure updates, and protocol-level activity, alongside curated data on supply dynamics, usage trends, and more.
Let’s get into it.
In The News
Oct. 19, 2025 | Chinese Regulators Halt Tech Giants’ Stablecoin Plans in Hong Kong
Chinese regulators instructed major tech firms, including Ant Group and JD.com, to suspend their plans to issue stablecoins in Hong Kong amid concerns that privately issued currencies could compete with the state-backed e-CNY and pose financial stability risks. The move follows Hong Kong’s new stablecoin licensing regime, which had attracted interest from over 70 firms seeking to launch yuan-pegged tokens under the city’s regulatory framework.
Oct. 15, 2025 | Paxos Accidentally Mints $300 Trillion in PYUSD Before Burning Tokens
Paxos mistakenly minted 300 trillion PayPal USD (PYUSD) tokens on Ethereum before burning them less than 30 minutes later. Paxos confirmed there was no security breach and that all customer funds remain safe, though the event highlighted risks in stablecoin issuance infrastructure, as the unintended mint briefly exceeded the total global money supply.
Oct. 15, 2025 | Erebor Becomes Second Federally Chartered Crypto Bank
The Office of the Comptroller of the Currency granted a conditional federal charter to Erebor, making it the second crypto-focused bank in the United States. The approval positions Erebor to compete directly in the expanding U.S. stablecoin market under the GENIUS Act, with plans to offer deposit, lending, and payment services once full authorization is complete.
Oct. 15, 2025 | Solana Gains Omnichain Access to USDT0 and XAUt0 via Legacy Mesh
Solana integrated with LayerZero’s Legacy Mesh to enable support for Tether’s USDT0 and XAUt0 stablecoins. The deployment links Solana to over $175 billion in native USDT liquidity across multiple blockchains, allowing stablecoins to move between networks without wrapped tokens.
Oct. 16, 2025 | Coinbase Introduces Stablecoin Payments Platform for Businesses
Coinbase announced Coinbase Business, an all-in-one financial platform for small and medium-sized firms to manage crypto payments, assets, and accounting. The service allows businesses to send and receive stablecoin payments, earn yield on USDC balances, and integrate directly with accounting software solutions like QuickBooks.
In The Data
The total stablecoin market cap rose 0.8% WoW to $308.8 billion, marking a modest continuation of capital inflows into the sector. The gains were led by USDT, which added $1.9 billion (+1.07% WOW) to reach a new high of $182.6 billion in circulating supply. USDC also climbed slightly, rising 0.58% WoW to $76.3 billion.
The most notable change came from USDS, which saw its market cap surge 15.4% WoW to $5.3 billion, the largest percentage increase among major stablecoins. In contrast, USDe declined 8.9% to $11.4 billion, as capital rotated out of the token.
PYUSD continued its steady ascent, rising 4.0% on the week to $2.7 billion. The move was enough to overtake USD1 in circulating supply, making PYUSD the sixth-largest stablecoin by market cap.
Stablecoin active addresses declined 6.4% WoW to 3.9 million, reversing last week’s gains and marking the largest single-week drop since early August. The pullback was broad-based, with most major networks reporting lower activity. BNB Chain saw the steepest decline among top chains, down 12.8% WoW to 997,400 addresses, while Tron fell 5% to 880,300. Solana and Ethereum also saw declines of 4.9% and 1.2%, respectively.
The only major networks to record increases were Celo and Polygon PoS. Celo rose 7.2% WoW to 695,800 active addresses, buoyed by steady usage in stablecoin remittance applications. Polygon PoS increased 6.5% WoW to 362,900 addresses, extending a multi-week uptrend.
The decline in aggregate usage was most pronounced in long-tail networks, where the “Others” category dropped 22% WoW to 449,900 active addresses.
Stablecoin transaction volume rose sharply this week, increasing 18.6% WoW to an average of $138.0 billion per day. The growth was accompanied by an 11.1% increase in the number of transactions, which climbed to 52.3 million per day. This divergence between transaction count and volume pushed the average transaction size up 6.7% WoW to $2,637, reversing last week’s decline and approaching month-to-date highs.
On a monthly basis, both metrics are trending upward. October’s monthly average transaction volume is up 20.7% compared to September, while the number of transactions is up 22.8% MoM. The higher average transaction size suggests that institutional and high-value transfers are continuing to drive aggregate volume, even as retail activity expands.
The concurrent rise in both transaction count and volume signals broadening stablecoin utility across payments, remittances, and DeFi settlement layers. However, the disproportionate increase in transaction size may also indicate growing concentration in large-scale transfers.
Good Reads
Closing Summary
Thanks for reading this week’s edition of In The Stables.
If you’d like to stay current on the latest developments in the stablecoin ecosystem, including regulatory shifts, market structure updates, and protocol-level activity, you can subscribe to the newsletter directly on LinkedIn or get In The Stables delivered directly to your inbox by subscribing here.
For deeper insights and expert research on stablecoins and the broader crypto landscape, visit us at Messari.io.
And finally, we’d love to hear from you. If you have feedback, topic suggestions, or just want to share how you’re using the newsletter, please don’t hesitate to reach out to our team. Your input helps us keep In The Stables as valuable and relevant as possible.
See you next week.
bitcoin analyst @Scout Bitcoin
3dIs daily dieing?