As stablecoins continue to gain worldwide momentum, the International Monetary Fund (IMF) has called for global cooperation to avert potential macro financial stability risks related to the rapidly growing sector and to turn the industry “into a force for good.”

Stablecoins To Foster Innovation, Financial Inclusion

On Thursday, the IMF released a 56-page report discussing the growing influence of stablecoins, their potential use cases in mainstream financial markets, and the risks associated with the sector’s varying oversight.

Amid the sector’s rapid growth, the organization highlighted that the two largest stablecoins, USDT and USDC, have tripled their market capitalization since 2023, reaching a combined $260 billion. Meanwhile, their trading volume has increased by around 90% to $23 trillion in 2024, with Asia surpassing North America in stablecoin activity volume.

The IMF noted two major potential benefits from stablecoins. First, they could enable faster and cheaper cross-border payments, especially for remittances, which can cost 20% of the amount being sent and face some delays.

However, “being a single source of information, blockchains can greatly simplify the processes linked with cross-border payments and reduce costs,” the Fund’s economists explained in a blog post.

Second, stablecoins could expand financial access, driving innovation by increasing competition with established payment service providers, therefore, making retail digital payments more accessible to underserved customers.

They could facilitate digital payments in areas where it is costly or not profitable for banks to serve customers. Many developing countries are already leapfrogging traditional banking with the expansion of mobile phones and different forms of digital and tokenized money.

Notably, competition with already established providers could lower costs and lead to enhanced product diversity, “leveraging synergies between digital payments and other digital services.”

IMF Warns Of Fragmented Oversight

Despite their potential benefits, stablecoins also carry significant risks, the IMF explained, including de-pegging and collapsing if the underlying assets lose value or if users lose confidence in the ability to cash out. Per the report, this could also trigger fire sales of the reserve assets and disrupt financial markets.

Stablecoins could also accelerate a “currency substitution” dynamic, where individuals and companies abandon their national currency in favor of a foreign one, like US dollars or euros, due to instability or high inflation.

The organization noted that the dynamic decreases a country’s central bank’s ability to control its monetary policy and serve as the lender of last resort, damaging the financial sovereignty of affected nations.

In addition, the potential to reduce cross-border frictions and make faster and cheaper transactions could be undermined by a lack of interoperability if various networks are unable to connect or are restricted by different regulations and other hurdles.

“Stablecoin regulation is in its infancy, so the ability to mitigate these risks remains uneven across countries,” the organization affirmed, noting that “the IMF and the Financial Stability Board have issued recommendations to safeguard against currency substitution, maintain capital flow controls, address fiscal risks, ensure clear legal treatment and robust regulation, implement financial integrity standards, and strengthen global cooperation.”

As reported by Bitcoinist, the FSB vowed in October to address the evolving threats from private finance and the growing use of stablecoins, promising to increase the global watchdog’s policy response and overhaul its surveillance system to make it more flexible and quicker.

Nonetheless, major jurisdictions have taken different stances in key areas, as the IMF detailed, which could result in the exploitation of gaps between jurisdictions and issuers to locate where oversight is weaker.

All this underscores the need for strong international cooperation to mitigate macrofinancial and spillover risks (…). Tokenization and stablecoins are here to stay. But their future adoption and the outlook for this technology are still mostly unknown.

The organization concluded that “improving the existing global financial infrastructure might be easier than replacing it. Achieving the best possible balance will require close cooperation among policymakers, regulators, and the private sector.”

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• The new legislation builds on the Digital Asset Basic Act by adding detailed rules for stablecoin oversight.
• The framework outlines how global stablecoins like USDT and USDC will be treated in Korea.
• Officials warn delays could leave Korea behind other regions that tightened rules in 2025.

South Korea is taking a major step toward formalising how won-based stablecoins will be issued and supervised, after lawmakers settled a long-running dispute over who should control the process.

A closed-door meeting brought clarity to the core question of authority, with policymakers agreeing that banks should lead the effort while still allowing tech firms to participate.

The move comes at a time when crypto adoption is rising among people aged 20 to 50, and when global players continue to dominate stablecoin markets.

With a December deadline approaching, officials want to finalise a structure that supports innovation but keeps monetary stability at the centre of regulation.

Consortium model defines the role of banks and tech firms

A Dec. 1 report by Maeli Business Newspaper said lawmakers agreed on a consortium model where banks maintain majority control of stablecoin-issuing entities.

Tech companies will still be able to participate, but financial institutions will take the lead to reduce systemic risks.

The goal is to create a Korean-style stablecoin framework that mirrors the safeguards of traditional finance, with clear rules governing reserves, issuance, and supervision.

The model was designed to align with the Bank of Korea’s concerns about protecting the money supply.

It also provides a common structure for private companies, reducing the risk of fragmented products entering the market without consistent stability mechanisms.

By setting shared standards early, policymakers hope to shape a domestic stablecoin ecosystem that can support innovation without compromising financial security.

Government faces Dec. 10 deadline for its proposal

Senior Democratic Party lawmaker Kang Joon-hyun said the government must submit its proposal by Dec. 10. If it misses the deadline, lawmakers will move ahead with their own version of the bill.

The aim is to pass the legislation during the National Assembly’s January extraordinary session, after consultation with the ruling People Power Party and the president’s office.

This new act expands on the Digital Asset Basic Act passed earlier this year.

That earlier law established licensing rules for issuers, requirements for reserve protection, and compliance obligations for virtual asset service providers.

The upcoming bill fills in the remaining regulatory gaps by specifying how stablecoins should be managed when they operate like traditional financial instruments.

It also provides clearer guidance for US-based stablecoins such as USDT and USDC, which have become increasingly influential in Korea’s growing digital asset market.

Push to match progress in global markets

Officials warn that delays could leave Korean companies trailing behind their global competitors.

The US, EU, and Japan strengthened their stablecoin rules in 2025, creating a more defined landscape for exchanges and financial institutions.

Korean regulators want to avoid losing momentum, especially as domestic interest in crypto continues to rise.

The updated framework aims to reduce uncertainty for developers, financial firms, and exchanges.

By bringing digital assets closer to mainstream financial oversight, authorities hope to support responsible growth and give consumers access to well-regulated products.

The focus is on keeping the domestic market aligned with international standards while maintaining space for private-sector innovation.

Lawmakers discuss wider reforms on security and markets

The meeting also covered planned updates to financial security and capital-market rules.

After recent hacking incidents at major financial companies, officials intend to revise the Electronic Financial Transactions Act.

Proposed changes include tougher penalties and stronger enforcement following cyber breaches.

Lawmakers are also working with opposition parties on a set of capital-market reforms.

These include rules that would require mandatory tender offers in certain corporate situations.

They also plan to update share-allocation standards so that everyday investors have fairer access to offerings.

The goal is to improve transparency and strengthen market integrity as Korea reshapes its financial regulatory environment.

The post South Korea moves to tighten stablecoin rules with a bank-led model appeared first on CoinJournal.

• Lookonchain reported $436.5 million in USDC moved to Kraken.
• Project revenue fell to $27.3 million in November.
• Wallets still held over $855 million in stablecoins and $211 million in SOL.

Pump.fun’s internal fund activity has drawn intense scrutiny after pseudonymous co-founder Sapijiju challenged claims that the project cashed out more than $436 million in stablecoins.

The discussion began when blockchain analytics platform Lookonchain reported that wallets linked to the Solana memecoin launchpad had transferred large amounts of USDC to the crypto exchange Kraken.

The activity raised fears of selling pressure and uncertainty about how the project handled its reserves.

The story quickly spread across X, where users analysed the movement of funds, debated the project’s finances, and questioned the clarity of the explanations offered.

USDC flows tied to internal management

In an X post, Sapijiju said the transfers were part of Pump.fun’s treasury management process and were not sales.

The post said the USDC originated from the PUMP token’s initial coin offering and was moved between internal wallets to support the company’s runway and reinvestment plans.

The post also stated that Pump.fun had never worked with Circle.

Treasury management typically involves reorganising wallets, allocating capital, and preparing budgets, and does not always indicate selling or liquidation.

Lookonchain’s report said the transfers to Kraken had reached $436.5 million in USDC since mid-October.

The timing drew more attention because Pump.fun’s monthly revenue had fallen to $27.3 million in November, its first drop below $40 million since July, according to DefiLlama.

Despite the concerns, data from DefiLlama, Arkham, and Lookonchain showed that the Pump.fun-tagged wallet still held more than $855 million in stablecoins and $211 million in Solana SOL, which traded at $136.43.

Analysts and community respond

Nansen research analyst Nicolai Sondergaard interpreted the reported transfers as a sign that more selling could follow.

In contrast, EmberCN suggested the activity reflected institutional private placements of the PUMP token rather than active dumping.

The competing interpretations led to a broader review of the token’s performance and project structure.

CoinGecko data showed that PUMP traded at $0.002714, down 32% from its ICO price of $0.004 and almost 70% below its September high of $0.0085.

Currently, PUMP is trading at $0.002738, rising 6.9% in the past 24 hours.

The price movement added more tension to community discussions as users examined whether the treasury actions aligned with the token’s market conditions.

Across X, multiple posts highlighted the divide in sentiment.

Some users argued that the explanation raised more questions, pointing to inconsistencies and asking for clearer communication.

Others dismissed the statement entirely and linked the treasury activity to concerns about token performance and execution.

A separate group of users said Pump.fun had the right to manage its revenue, ICO proceeds, and reserves as it saw fit.

They described treasury movements as common practice after an ICO and said the main issue was whether USDC reserves properly backed the circulating supply.

Treasury structure becomes central issue

As more users examined the fund flows, the debate shifted from selling pressure to the broader structure of Pump.fun’s treasury.

The discussion focused on the scale of reserves, how the project organised its wallets, and whether the team provided enough visibility into its financial management.

The presence of more than $855 million in stablecoins indicated that large amounts of capital remained under project control, but users continued to question the timing, communication, and purpose behind the transfers.

The situation highlighted how treasury management can become a point of market sensitivity, especially when combined with falling revenue, volatile token prices, and community scepticism.

With attention across X still focused on the movements, the conversation has moved toward transparency expectations, reserve backing, and the company’s approach to supporting long-term development.

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• The licence covers 13 cryptocurrencies, including Bitcoin, Ether, USD,C and Tether.
• AMINA reported a 233% increase in Hong Kong trading volumes in early 2025.
• Hong Kong launched new stablecoin rules and approved a Solana ETF this year.

Hong Kong’s push to build a regulated digital asset market is drawing more interest from global financial institutions, and the latest example is Swiss crypto bank AMINA Bank AG securing approval to expand its services in the city.

The bank received a Type 1 licence uplift from the Securities and Futures Commission, which makes it the first international bank allowed to offer regulated crypto trading and custody to institutional clients in Hong Kong.

The move strengthens the city’s position as a regional digital asset hub and highlights rising demand for bank-grade crypto services among professional traders.

AMINA plans to use the approval to provide institutional users with a regulated route into cryptocurrencies at a time when clients are looking for stronger safeguards and clearer rules.

Hong Kong’s compliance standards have often limited the number of foreign institutions able to offer these services, which has left a gap in the market for firms with established banking frameworks.

AMINA’s entry aims to fill that gap while giving clients a regulated platform backed by traditional financial infrastructure.

AMINA expands in a fast growing market

The licence uplift allows AMINA’s Hong Kong subsidiary to offer trading and custody for 13 cryptocurrencies.

These include Bitcoin, Ether, USDC, Tether, and several leading decentralised finance tokens that are widely used across global exchanges.

The approval creates new opportunities for institutional clients looking for a single regulated venue with access to a curated list of major digital assets.

AMINA also reported a sharp rise in market activity.

The bank recorded a 233% increase in trading volume on Hong Kong crypto exchanges in the first half of 2025.

The increase points to stronger engagement from both institutional and retail segments, which are becoming more active as Hong Kong’s regulatory environment evolves.

The bank expects the new approval to support a wider product range.

It plans to expand into private fund management, structured crypto products, derivatives, and tokenised real-world assets.

These additions would place AMINA among the firms offering institutional clients diversified exposure across multiple types of digital assets.

Local players face new global competition

While AMINA is the first international bank to receive this specific licence upgrade, it enters a competitive market.

Hong Kong already hosts regulated local firms such as Tiger Brokers and HashKey, which serve institutional and retail clients under earlier permissions.

AMINA’s approval signals that the market is open to more foreign institutions, which could change competitive dynamics for both global and local providers.

Hong Kong officials have said on multiple occasions that attracting global firms is central to the city’s digital asset strategy.

AMINA’s arrival may encourage more banks and brokerages abroad to consider similar applications as they assess opportunities in Asia’s regulated crypto markets.

Policy changes shape Hong Kong’s crypto framework

AMINA’s approval arrives during a period of rapid policy development in the city.

Hong Kong introduced its new stablecoin rules in August, creating a formal licensing pathway for issuers.

Following this, major regional banks such as HSBC and ICBC indicated they were examining licence applications as part of their digital asset plans.

The city also approved its first Solana exchange-traded fund in late October.

The approval placed Hong Kong ahead of the US in allowing a regulated Solana ETF and added another product to its growing list of crypto-linked investment options.

Hong Kong tightened rules around self-custody of digital assets in August.

The change focused on improving cybersecurity protections and reducing risks tied to individual key management.

The decision was presented as a safety measure rather than a restriction on user access.

The combination of new rules and rising institutional interest has created an environment that is now attracting more global firms.

AMINA’s regulatory progress adds momentum to Hong Kong’s strategy of balancing strong compliance with market expansion.

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• An attacker withdrew $3 million in USDC from OKX and split it across 19 wallets.
• They opened $26 million in leveraged long positions on POPCAT perpetuals.
• A $20 million buy wall was placed to falsely signal market strength.

A sharp and deliberately executed sequence of trades has exposed a serious vulnerability in decentralised finance infrastructure.

Hyperliquid, a derivatives platform known for its POPCAT-denominated perpetual futures, recorded a loss of $4.9 million after one entity manipulated internal liquidity to set off a cascade of liquidations.

This was not a conventional exploit for profit, but a calculated test of how much stress an automated liquidity provider can endure before it breaks.

It began with the movement of $3 million in USDC, withdrawn from the OKX crypto exchange. The funds were distributed evenly across 19 new wallets, each routing assets into Hyperliquid.

There, the trader opened over $26 million in leveraged long positions tied to HYPE, the perpetual contract priced in POPCAT.

This aggressive positioning was then reinforced with a synthetic buy wall worth around $20 million, placed near the $0.21 price level.

This wall functioned as a temporary illusion of demand strength. Price responded to the signal, rising as participants interpreted the buy wall as structural support.

However, once the wall vanished, that support disappeared, and liquidity thinned.

With no bids to absorb market movement, highly leveraged positions began liquidating en masse. The protocol’s Hyperliquidity Provider vault, built to absorb such events, took the full impact.

A deliberate architecture stress test with real losses

What separates this incident from typical price manipulation is that the initiator made no profit.

The $3 million in initial capital was entirely consumed in the process. This strongly suggests that the goal was not financial gain but architectural disruption.

By introducing false liquidity signals, removing them at a precise point, and triggering liquidation thresholds, the attacker was able to manipulate the internal logic of the vault system.

The vault, designed to balance risk across positions and supply liquidity in volatile moments, was pulled into a liquidation cascade that it could not fully contain.

This raised questions about how automated liquidity mechanisms handle synthetic volatility events, particularly when faced with malicious but structurally informed participants.

The entire sequence unfolded onchain and was flagged by Lookonchain, which traced the trades back to their source and identified the attack’s distinct phases.

Withdrawal freeze sparks questions about platform stability

Shortly after the vault was impacted, Hyperliquid’s withdrawal bridge was temporarily disabled.

A developer associated with the protocol stated that the platform had been paused using a function called “vote emergency lock.”

This mechanism allows contract administrators to halt certain operations during suspected manipulation events or infrastructure risks.

The withdrawal function was re-enabled within roughly an hour. Hyperliquid did not release any official communication linking the freeze directly to the POPCAT trading event.

However, the timing suggested a precautionary action intended to prevent additional outflows or manipulation during a period of platform instability.

This marked one of the largest losses Hyperliquid has suffered from a single coordinated event, highlighting that even in the absence of external code exploits, internal systems can be compromised through precise liquidity attacks.

Community reaction underscores DeFi volatility

Community responses varied from technical analysis to satire. One observer described it as “the costliest research ever,” while another suggested the entire $3 million burn was “performance art.”

Others focused on what the attack revealed about perpetual futures markets with thin liquidity buffers, noting how easily they can be pushed into self-reinforcing failure.

One user described the event as “peak degen warfare,” referring to the high-risk strategy used to exploit predictable vault reactions.

Despite no direct theft, the outcome was functionally equivalent to a targeted denial-of-liquidity assault.

The attacker had no gain, but the protocol suffered a measurable financial hit, and its architecture showed clear signs of stress under pressure.

This incident has become a case study in how decentralised systems can be stressed from within using only publicly available tools and capital.

In this instance, no vulnerability was found in the codebase. Instead, the vulnerability lay in the assumptions that underpinned market structure and risk containment.

Hyperliquid has not announced any changes to its vault mechanics following the attack.

However, the broader DeFi ecosystem is likely to take note of the strategy and review how vaults absorb or reflect risk under coordinated synthetic pressure.

The post Hyperliquid’s $5m wipeout shows how DeFi vaults can collapse from within appeared first on CoinJournal.