Tether is making moves to boost its new U.S.-facing stablecoin, the U.K. central bank rethinks its stablecoin plans, and Coinbase (NASDAQ: COIN) and BVNK have left each other at the acquisition altar.
Nearly a year ago, Tether announced it had made a $775 million strategic investment in right-wing video-sharing platform Rumble (NASDAQ: RUM), which has allies in the Republican Party and the current White House administration.
This October, Tether announced that it would use Rumble as a platform for distributing USAT, Tether’s new U.S.-focused stablecoin (set to debut before year’s end). USAT is being issued by Tether America, a joint venture of Tether and digital asset custodian Anchorage Digital, allowing Tether to keep the focus of its primary token, USDT, outside the United States.
This week, Tether and Rumble made a flurry of major announcements, including Tether’s pledge to spend $100 million advertising on Rumble over the next two years. This commitment aims to boost the use of Rumble’s new digital wallet, expand Rumble creator monetization, and encourage new creators to join the platform (and use USAT).
The ad bucks couldn’t come at a better time, as Rumble’s latest earnings report shows it losing $16.3 million in the three months ending September 30, which is better than Q2’s $30.2 million loss but extends the company’s longstanding inability to post a profit. Rumble’s monthly average users totaled 47 million in Q3, down from 51 million in Q2, which the company blamed on “a slowdown of news and political commentary outside of a U.S. election cycle.”
That ad buy was small potatoes compared to the announcement that Rumble was acquiring former block reward miner turned AI/high-performance computing (HPC) infrastructure company Northern Data AG (ETR: NB2.MU). The ‘business combination agreement’ will see Rumble submit a voluntary public exchange offer to Northern Data shareholders.
This $767 million all-stock acquisition/combination is being made possible by “Tether’s support,” specifically, a $610 million loan. Tether holds a 48% stake in Rumble and owns a controlling stake in Northern Data. You can’t help but notice that this deal bears a striking resemblance to the incestuous ‘circular economy’ of the AI developer/AI chipmaker sector that has come under much criticism of late.
And the similarities don’t stop there. The same day Rumble announced its Northern Data deal, Rumble also announced that it had signed a deal with Tether in which the latter will buy “up to $150 million of GPU services over a two-year period” after Rumble absorbs the Northern Data infrastructure.
Rumble says its new GPU fleet will “enable Tether to supercharge its AI models and agents, ensuring both computational sovereignty and long-term cost efficiency. By leveraging Rumble’s library and Northern Data’s GPU clusters to train AI models and co-create tools that empower content creators worldwide, Tether’s AI products are aimed at being insulated from censorship or access restrictions.” (Although, given Rumble creators’ reputation for generating misinformation, Tether’s AI products might end up insulated from reality.)
Northern Data has traveled a rocky road with authorities, mirroring Tether’s own experience, at least, until Donald Trump returned to the White House and hired Tether ally Howard Lutnick as his new Commerce Secretary. Lutnick founded Cantor Fitzgerald (NASDAQ: ZCFITX), the Wall Street financial services firm that not only claims to custody Tether’s $100+ billion in U.S. Treasury bills but also holds a “convertible bond” of unknown size with Tether.
Northern Data’s offices were raided by German authorities in September as part of a probe into whether the company engaged in “large-scale” value-added tax fraud and money laundering at its former Sweden-based BTC mining operations.
The suspicion is that Northern Data illegally claimed a tax break on a 2023 purchase of 10,000 Nvidia (NASDAQ: NVDA) chips, the company claimed would be used for AI (which qualified for Swedish tax incentives) but were actually used for mining (which didn’t qualify).
Rumble’s bid for Northern Data was initially floated in August, prior to the raids, so the deal is being done at a slight discount to Northern Data’s then-share price. Tether and Rumble have also agreed to fund up to $200 million of Northern Data’s tax liabilities.
As part of its mining-to-AI pivot, Northern Data announced on November 3 that it had completed the divestiture of its Peak Mining unit for $50 million upfront and up to $150 million in additional payments. The top-ups will be based on profit-sharing from Northern Data’s Corpus Christi, Texas mining operations.
Curiously, Peak Mining’s purchaser went unspecified, beyond Northern Data’s cryptic reference to “a new owner with the deep experience and capabilities required to maximize its future potential.” However, other reports indicate that the buyer was Elektron Energy LP, which may or may not be yet another Tether-controlled entity. Bloomberg reported that the buyer was “affiliated with Tether,” citing “people familiar with the matter.”
Bank of England looking for stablecoin input
The U.S. under Trump’s second term has made significant progress in legislating/regulating digital assets, including stablecoins, the focus of the GENIUS Act that Trump signed into law this summer. The Treasury Department is currently seeking input from stakeholders on how to implement GENIUS.
America’s stablecoin advances have rattled other nations that have taken a more cautious approach, including England, where the central bank is frantically playing catch-up. On November 5, Bank of England (BoE) deputy governor Sarah Breeden said it was “really important” for the U.S. and U.K. to be on the same page in terms of stablecoin regulation, adding that regulators from both countries “are working together.”
On November 10, the BoE published a consultation paper setting out its “proposed regulatory regime for sterling-denominated systemic stablecoins.” Systemic is defined as stablecoins “that are widely used in payments [retail and corporate] and therefore may pose risks to U.K. financial stability.”
The BoE isn’t seeking input on ‘non-systemic’ stablecoins, which are primarily used as one-half of a trading pair for other tokens. Non-systemic stablecoins will be overseen by the U.K.’s Financial Conduct Authority (FCA), although when non-systemic stablecoins are later recognized as systemic by the BoE, they will ‘transition’ and be jointly regulated by the BoE/FCA.
The BoE proposes to allow systemic stablecoin issuers to hold 60% of their reserves in short-term U.K. government debt. The remaining 40% can be held in unremunerated BoE accounts, “ensuring robust redemption and public confidence, even under stress.”
However, issuers designated to be systemic at launch (or making the aforementioned ‘transition’ from the FCA) “will initially be able to hold up to 95% of backing assets in short-term UK government debt, to support their viability as they grow.”
The BoE will also consider “central bank liquidity arrangements” to provide “a backstop should systemic issuers be unable to monetize their backing assets in private markets.”
The BoE previously established limits on how much value in stablecoins that individuals (up to £20,000 [$26,284] per coin) and businesses (£10 million [$13 million]) could hold, with higher limits allowed for “the largest businesses.” The BoE now says these limits “would be removed once the transition no longer poses risks to the provision of finance to the real economy.” They also won’t apply to stablecoins “used for settling wholesale financial market transactions in the [BoE] and FCA’s Digital Securities Sandbox.”
Mirroring language in GENIUS, the BoE proposes that systemic stablecoin issuers “should not pay interest to coinholders.” However, in America, a major fight is ongoing between banks and digital asset exchanges like Coinbase over whether non-issuers are allowed to offer ‘rewards’ to stablecoin holders.
The BoE doesn’t specifically address non-issuers but notes that “some issuers offer rewards to customers for using their stablecoins. We intend to consider the implication of this in the context of the remuneration policy and more broadly in the future.”
As for ‘non-sterling’ stablecoins issued by non-U.K. entities, the BoE says that if these “reach systemic levels of use in the U.K. … we may defer to non-U.K. authorities where their regulatory and supervisory frameworks deliver outcomes equivalent to our own.”
The U.K.’s HM Treasury recently partnered with the U.S. Treasury Department on a Transatlantic Taskforce to “enhance collaboration on capital markets and digital assets and other innovative financial activities.”
The BoE finds itself in this game of catch-up after years of dismissing the need to take stablecoins seriously. Meanwhile, the European Union adopted its Markets in Crypto Assets (MiCA), which imposes more restrictive rules than America’s, so much so that Tether chose not to pursue a MiCA permit, while the USDC token issued by Tether rival Circle (NASDAQ: CRCL) received its MiCA diploma in July 2024.
At present, the U.K. seems to be tilting toward its former colony (America) rather than the EU. As an anonymous former BoE official told Politico, splitting this difference won’t be easy. “The U.K. is a bit caught. It doesn’t have the luxury of completely creating a bespoke regime. It can do, but essentially, no one’s going to care.”
The BoE is accepting feedback on its proposals until February 10. After getting to the bottom of its suggestion box, the BoE will finalize the Codes of Practice with detailed requirements for systemic stablecoins, likely in the second half of 2026.
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Brazil to treat stablecoins as foreign exchange
On November 7, U.S. Federal Reserve Governor Stephen Miran gave a speech in which he suggested that “the real opportunity in stablecoins is to satiate untapped foreign appetite for dollar assets from savers in jurisdictions where dollar access is limited.” As such, Miran expects “most demand for stablecoins to come from locales unable to access dollar-denominated saving instruments, boosting demand for dollar assets.”
It’s no secret that some Latin American nations have been at the forefront of stablecoin adoption for payments/savings rather than speculation. Argentinians, for example, have embraced Tether’s USDT as a preferred alternative to the peso, the value of which has been fundamentally unsound for decades.
Venezuela suffers from the double whammy of hyperinflation (270% in October, according to the International Monetary Fund) and U.S. economic sanctions against the government of Nicolás Maduro. Last month, the New York Times reported that dollar-denominated stablecoins account for “up to half of the hard currency that enters the Venezuelan economy legally.”
This week, the head of Venezuela’s National Supermarkets and Self-Service Stores (ANSA) claimed digital assets would account for “at least 10% of all payments made at supermarkets” by the first quarter of 2026. At least three prominent supermarket chains have hopped on the digital asset payment bandwagon, and stablecoins’ percentage of overall sales will only grow as more merchants adopt the technology.
In Brazil, the Banco Central do Brasil (BCB) just issued new regulations on digital assets this week, including BCB No. 521, which categorizes “certain activities of virtual asset service providers (VASPs), which will now be treated as foreign exchange and international capital market operations.”
This includes “buying, selling or exchanging virtual assets referenced in fiat currency.” VASPs will be required to report customers involved in these activities, along with “total monthly purchases, sales and exchanges” of stablecoins, both sending and receiving.
The new regulations are set to take effect on February 2, 2026. By May 4, it will be mandatory for VASPs “to provide information to the Central Bank regarding foreign exchange market transactions and foreign capital transactions in Brazil.”
It was only this June that the BCB appeared to be walking back plans to treat stablecoins as forex after negative public feedback. It’s unclear what’s changed since then and why the BCB reverted to the plans initially floated in a consultation paper last December.
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Coinbase, BVNK acquisition talks break down
U.K.-based stablecoin infrastructure provider BVNK is proving harder to land than a date with Sydney Sweeney. On November 11, Fortune broke the news that Coinbase had broken off the talks it was having with BVNK regarding a possible acquisition.
While Fortune reportedly got the scoop straight from Coinbase, no reason was provided for the failed negotiations. A spokesperson for the exchange said only that “after discussing a potential acquisition of BVNK, both parties mutually agreed to not move forward.”
It was only two weeks ago that Coinbase was said to be in “late-stage” talks with BVNK on a deal worth between $2-$2.5 billion.” Those talks were reportedly proceeding on an exclusive basis after BVNK’s talks with Mastercard (NASDAQ: MA) hit the skids.
Mastercard had reportedly moved on to talks with Chicago-based stablecoin/blockchain infrastructure firm Zerohash, although one supposes that news of BVNK being back on the market could complicate those talks.
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Japan okays bank consortium’s stablecoin plan
Closing on a positive note, Japan’s Financial Services Agency (FSA) announced on November 7 that it had approved the application for a yen-denominated stablecoin jointly backed by a consortium of the country’s major banks. The approval was done under the umbrella of the FSA’s Payment Innovation Project and its FinTech Demonstration Hub.
The consortium involves MUFG Bank (NASDAQ: MUFG), Sumitomo Mitsui Banking Corp (NASDAQ: SMFNF), and Mizuho Bank (NASDAQ: MZHOF), while their as-yet ticker-less stablecoin will be issued via MUFG’s Progmat Coin platform.
The consortium’s initial focus will be on corporate payments, with Mitsubishi Corporation and its 240 subsidiary companies on board to facilitate international transfers using the new stablecoin. The FSA said the project, which has been cleared to launch this month, “is expected to improve user convenience and corporate productivity in Japan.” The FSA said it will eventually produce a report on how the launch is going and the lessons learned from the rollout.
The news comes just two weeks after the FSA approved JPYC, the yen-denominated stablecoin issued by the fintech company of the same name.
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Watch: Bringing the Metanet to life with Teranode
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Source: https://coingeek.com/tether-wheels-and-self-deals-boe-open-stablecoin-consultation/