Digital asset firm New Frontier Labs has partnered with BitGo Bank & Trust National Association to issue and provide custodial services for the FYUSD stablecoin, a dollar-pegged token aimed at institutional investors in Asia.
BitGo’s announcement said FYUSD is compliant with the GENIUS Act stablecoin regulatory framework. The regulations include 1:1 backing with cash deposits held by a custodian or short-term US government debt instruments, anti-money laundering (AML) requirements and Know-Your-Customer (KYC) checks.
The company also developed “Fypher,” a suite of stablecoin infrastructure tools that provides a “programmable settlement” layer for the FYUSD token that allows it to be used by autonomous AI agents for commercial transactions.
US Treasury Secretary Scott Bessent has touted stablecoins to preserve US dollar dominance by reducing settlement times, transaction costs and democratizing access to US dollars for individuals without access to traditional banking infrastructure.
The total market capitalization of stablecoins is over $295 billion at the time of this writing, according to RWA.XYZ, down from the peak of over $300 billion recorded in December.
Stablecoin issuer Tether, the issuer of the USDT dollar-pegged token, is on track for the steepest monthly drop in USDT circulating supply since the collapse of the FTX crypto exchange in 2022. At the time of writing, circulating supply was 183.64 billion USDT, CoinMarketCap data showed.
By market capitalization, USDT is still the biggest stablecoin in the world, but according to Artemis statistics, its circulating supply has decreased by $1.5 billion so far in February. After a $1.2 billion decline in January, it appears that this month will see a ramp up in user redemptions.
Redemptions of stablecoins may indicate a more general downturn in the cryptocurrency market when investors sell off their holdings and transfer them off chain, possibly into other assets.
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