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Stablecoins have assembled their very own agentic AI Avengers, Circle (NASDAQ: CRCL) can’t shake its OUSD hangover, and Tether can’t stop buying things.
- PayPal ignores Stripe takeover bid, bringing native PYUSD to Polygon
- x402 Foundation launches to further agentic AI payments
- Circle can’t shake shadow of new rival Open USD
- Tether buying anything not nailed down
- Thailand eyes dodgy USDT transactions, U.S. freezes more Iranian USDT
- Is ruble-backed A7A5 stablecoin really as popular as it claims?
The digital payments world got a jolt early Wednesday as Reuters broke the story that payment processor Stripe had teamed up with private equity group Advent International on a $53.4 billion bid to acquire rival PayPal (NASDAQ: PYPL).
While that sum represents a more-than-one-quarter premium to PayPal’s Tuesday closing price, it’s also a significant discount to the company’s previous valuations. PayPal has given up ground to a growing number of competitors in recent years, as more and more payments move online. But there’s as yet no sign that PayPal is even open to the offer, although the company’s board will reportedly discuss it later this month.
Advent has a history of taking stakes in payment firms, including Worldpay, Vantiv, and Nexi, and both Stripe and PayPal are stablecoin-friendly outfits. In March, Stripe officially launched its Layer-1 stablecoin payment network (Tempo) following its $1.1 billion acquisition of stablecoin infrastructure firm Bridge in 2024, while PayPal’s dollar-backed PYUSD token (issued by Paxos) has been around since 2023.
But PYUSD’s market cap has fallen from its all-time high of $4.2 billion in April to just $2.85 billion as of Wednesday. PYUSD accounted for just $2.4 billion of the total $1.78 trillion in stablecoin transaction volume reported last month.
PayPal has been trying to reverse PYUSD’s downward trend, making the token available to customers in 70 markets, roughly one-third of the markets in which PayPal operates. And last week saw the announcement that PYUSD was now being issued natively on the Polygon network, which settles over $2.5 billion in daily stablecoin volume.
Polygon says PYUSD is being made available via its Open Money Stack (OMS), which allows merchants to incorporate stablecoin payments “through a single integration, with regulated payins, payouts, and compliance built in.”
Polygon Labs CEO Marc Boiron didn’t mince words, saying any stablecoin “is only as useful as the places it can go and what it can do when it gets there … When a federally regulated stablecoin is available on infrastructure that already moves money at scale, businesses stop asking whether stablecoin payments are ready and start asking what they can build with them.”
Paxos chief revenue officer Peter Jonas celebrated PYUSD’s arrival on “one of the most active networks for stablecoin payments,” adding that businesses using OMS can now settle transactions in PYUSD “with confidence in the compliance and regulatory oversight that serious money requires.”
Agentic AI-focused x402 Foundation launches
Serious money includes stablecoin-based agentic AI payments, which got a major boost this week via the launch of the x402 Foundation, an organization comprised of 40 major blockchain/tradfi firms that support the x402 internet-native payment protocol.
The Foundation, operating under the neutral governance of the Linux Foundation, “will allow developers, financial institutions, cloud providers and other community members to collaboratively shape the protocol’s development.” x402 “embeds secure payment capabilities directly into web interactions, allowing AI agents, APIs, and applications to process financial transactions as easily as they exchange data.”
The Foundation says the protocol has handled 75.4 million transactions worth $24.2 million in the past 30 days, reflecting the micropayment nature of many agentic AI transactions that would be unprofitable for traditional payment firms.
While x402 was developed by the Coinbase (NASDAQ: COIN) digital asset exchange, the protocol supports “multiple payment types, from traditional cards to stablecoins, without vendor lock-in.”
Accordingly, the Foundation’s initial members are a who’s who of both tradfi and blockchain stars, divided into three membership tiers. Some of the ‘premier members’ include American Express (NASDAQ: APX), USDC-issuer Circle, Google (NASDAQ: GOOGL), Mastercard (NASDAQ: MA), RLUSD-issuer Ripple, Shopify (NASDAQ: SHOP), Stripe, and Visa (NASDAQ: V). ‘General members’ include Fireblocks, LayerZero Labs, Polygon Labs, the Trump-linked USD1-issuer World Liberty Financial, and zerohash. ‘Associate members’ include the BSV Association, Cardano Foundation, and OMA3.
Circle tweeted its pride at being a ‘premier’ Foundation member out of the gate and hailing the advancement of the “agentic economy.” Given Circle’s close ties to x402 developer Coinbase, USDC has to date been the primary token for agentic AI transactions. Circle has launched several products to take advantage of this head start, including Agent Wallets and an agent marketplace for both agents and their human overseers.
Circle faces downgrades on increased competition
But all is not well in Circleville, particularly since the recent announcement of a new dollar-backed competitor, Open Standard’s OUSD token, and its lengthy list of corporate partners.
It bears noting that some of the corporate partners cited in OUSD’s announcement, including Korean giants Samsung
(NASDAQ: SSNLF) and Dunamu (parent of the Upbit exchange), subsequently claimed to be “perplexed” by their inclusion in this list.
One unidentified Korean corporate official told Chosun Biz that they only learned of their presence on the list from local media, adding that “we only gave a light reply to Open Standard’s inquiry that ‘we will review it if it goes well.’” Another official said, “There were no official consultations, and we do not even know what role we would take” in this alliance of (allegedly) stablecoin-ready firms.
Regardless, some analysts have begun to downgrade Circle’s future prospects based on its new competition. Mizuho Securities slapped an ‘underperform’ tag on Circle and lowered its price target from $85 to $50. Mizuho believes OUSD’s “pass-through model to distributors … could fundamentally alter CRCL’s business model, which relies on retaining a large portion of the treasury yield to drive revenues.”
Circle CEO Jeremy Allaire previously dismissed such concerns, saying his company shares “the majority of its income with its distribution partners.” Allaire also claimed that OUSD’s profit-sharing obligations could starve the new token of funds needed to build out its infrastructure.
JPMorgan Chase (NASDAQ: JPM) analysts took a similarly dim view of Circle’s fortunes based on the ongoing land rush to establish this or that stablecoin as the primary token of this or that platform, which could force issuers like Circle to strike less favorable distribution deals. The current USDC partnership between Coinbase and Circle is due to expire in August, and Coinbase’s support of OUSD could give the exchange additional leverage in renewal negotiations with Circle.
Circle is also holding an “invitation-only gathering” with senior execs from South Korean exchanges, banks, and payment firms to discuss ways to strengthen existing relationships and establish new ones. The ‘Current Seoul’ event will take place on July 23 and looks to build on Allaire’s last trip to Seoul in April.
Tether eyeing little kid’s lemonade stand for possible acquisition
USDC’s primary stablecoin rival, the market-leading USDT issued by Tether, also isn’t resting on its laurels. In fact, Tether has been a dealmaking machine, ranking fourth on CryptoRank’s list of investors in the first half of 2026.
Tether booked 16 deals in H1, only two behind the Andreessen Horowitz (a16z) (NASDAQ: ZADIHX) venture capital group. (Coinbase Ventures led the chart with 32 deals, although Tether was the lead investor in four deals versus just one for Coinbase.)
Some of Tether’s investments include:
- A $20 million stake in Argentine digital bank Ualá, which also has a presence in Mexico and Colombia. The deal was struck in March but only reported this week (via Bloomberg).
- A $20 million stake in Brazil’s Mercado Bitcoin platform, which Tether announced last week.
- An investment of unknown size in LemFi, a cross-border remittance firm with over one million customers in Africa and Asia.
- An 8.2% stake in Antalpha, a Bitmain-linked group that offers BTC-backed loans and equipment financing to block reward miners.
- An unquantified role in the $134 million private placement by Stablecoin Development Corporation (NYSE AMERICAN: SDEV), a digital asset treasury focused on the Sky Protocol’s governance token SKY.
- A strategic investment in Ark Labs, an infrastructure firm for programmable financial applications on BTC.
- A $200 million investment in Whop, the online marketplace that facilitates $3 billion in annual ‘creator’ payments to its over 18 million users.
- A strategic investment in Supreme Liquid Labs, operator of Dreamcash, a mobile interface for Hyperliquid that’s trying to bring real-world asset (RWA) perpetual markets to a larger audience.
- And this week saw Tether lead a $7 million funding round in infrastructure provider Pact Labs, which Tether hopes will help boost adoption of its new U.S.-focused stablecoin USAT for payroll and payments.
Tether also acquired SoftBank Group’s (NASDAQ: SFTBF) stake in Twenty One Capital (NASDAQ: XXI), the BTC treasury firm that launched earlier this year under Tether’s majority control but has seen its share price fall by over 38%.
Tether’s announcement didn’t specify what it paid to acquire SoftBank’s share, which was worth $891 million at the time of XXI’s debut. Tether now controls over 70% of XXI shares and has voiced plans to three-way merge XXI with minority partner Strike (whose CEO, Jack Mallers, is also XXI’s CEO) and the Tether-linked mining outfit Elektron Energy.
Tether’s investments aren’t limited to its traditional crypto roots, as the company made an undisclosed investment in German tech startup NEURA Robotics and another in Eight Sleep, a firm that uses “advanced artificial intelligence and embedded sensors to deliver personalized sleep insights.”
USDT can’t shake Iran connection, Thailand scrutiny
Tether is clearly keen to diversify its operations and hopefully diminish USDT’s reputation as the discerning criminals’ digital tool of choice. Trouble is, Thailand is complicating these efforts with a renewed focus on USDT’s use in unauthorized activity within the kingdom.
On July 9, the Thansettakij media outlet reported that the Bank of Thailand and the country’s securities regulator are looking to crack down on “high-risk transactions such as gold trading, large-volume banknote exchanges, and unusual digital asset trading.”
The latter involves the authorities using data analytics to investigate USDT transactions with “unusually high trading volumes.” Some of these transactions “were found to be potentially evading disclosure of information or transferring funds through normal systems.”
Stateside, this week saw U.S. Treasury Secretary Scott Bessent tweet that the Office of Foreign Assets Control (OFAC) had “sanctioned multiple [digital] wallets tied to the Central Bank of Iran, resulting in the freeze of over $130 million.”
While Bessent didn’t get into specifics, his tweet followed a tweet by blockchain analyst Specter detailing how USDT stablecoin issuer Tether “has just frozen four TRON wallets holding a total of $131M USDT.” Specter subsequently tweeted that at least one of the wallets was linked to the OFAC-sanctioned Islamic Revolutionary Guard Corps (IRGC) and Iran’s central bank.
OFAC has been aggressively targeting Iran’s USDT holdings since the U.S. launched its military action against the country this spring. These actions included $344 million in USDT frozen in April, and Bessent later claimed that the U.S. had seized ~$1 billion worth of Iran-linked digital assets. TRM Labs recently estimated that Iran had relied on two bogus U.K.-based exchanges to funnel $1 billion worth of USDT on TRON past the authorities trying to enforce U.S. economic sanctions.
Is Russia’s A7A5 inflating its numbers?
Earlier this month, the Wall Street Journal reported that Iran, Russia, North Korea, and other sanctioned nations had conducted $100 billion worth of crypto transactions last year alone. Much of Russia’s sanctions-dodging effort centers on A7A5, a ruble-based stablecoin controlled by the Russian government that launched in January 2025 and reportedly accounted for half of all crypto-based sanctions evasion that year.
However, A7A5 execs’ self-reported claims of massive token turnover—$34.4 billion in the first half of 2026, averaging $205 million per day—are now facing greater scrutiny. TRM Labs analyst Chris Keegan told CoinDesk that A7A5’s daily volume is more like $75 million, and that sum has been shrinking as the year progresses. Keegan believes one-third of A7A5’s observed transaction volume is artificial ‘circular fund movements.’
Elliptic co-founder Tom Robinson said A7A5’s monthly volume was down 90% since January and 96% below its 2025 peak. The decline came courtesy of more aggressive monitoring by Western authorities and April’s still-unattributed hacking of the Kyrgyzstan-based Grinex exchange, where much of A7A5-based token trading occurred.
Grinex was sanctioned by European Union authorities last October. In May, U.K. authorities sanctioned the TRON-linked HTX (formerly Huobi) exchange for facilitating A7A5-related activity that “channeled over $1.5 billion back into the Kremlin’s hands.”
Oleg Ogienko, an exec with the A7 network behind A7A5, told CoinDesk that the analysts’ dramatically lower estimates of the token’s volume don’t take into account its use on decentralized finance (DeFi) platforms. A7A5 claims a market cap of nearly RUB45.3 billion (US$589 million), of which RUB44.7 million resides on TRON (the rest exists as a ‘wrapped’ version on Ethereum).
Robinson said A7A5’s “cherry-picked trading and transaction figures … conceal the obvious trend: that A7A5 is failing in its goal of enabling Russian sanctions evasion.”
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