Summary The UAE has enacted one of the world’s most comprehensive digital-asset frameworks, placing crypto, DeFi, and tokenization under central bank supervision and reinforcing the country’s position as a leading global crypto hub. Tether has rapidly expanded its gold reserves to 116 tonnes, placing it among the world’s top central bank-level holders. It also prepares a fully U.S.-regulated stablecoin (USAT) amid a highly competitive and evolving U.S. stablecoin landscape. Texas's $5 million allocation to a bitcoin ETF marks an early move toward the first state-level bitcoin reserve in the U.S., occurring alongside a broader trend of global public entities gradually increasing BTC exposure even as short-term market selling persists. UAE Enacts Sweeping Central Bank Law to Regulate Crypto and DeFi The United Arab Emirates has introduced one of the world’s most comprehensive national frameworks for digital assets, bringing crypto, DeFi and blockchain services fully under the supervision of the Central Bank of the UAE (CBUAE). The newly enacted Federal Decree Law No. 6 of 2025 replaces the country’s previous banking framework and requires all crypto and blockchain businesses operating in or from the UAE to obtain a CBUAE license, regardless of the technology used. The law integrates digital assets, decentralized finance, stablecoins, tokenized real-world assets, exchanges, wallets, and infrastructure into traditional financial regulation while aiming to position the UAE as a global hub for financial innovation. It introduces 60-day licensing decisions, risk-based capital rules, enhanced Shari’ah governance, and a one-year grace period (until September 2026) for existing firms to become compliant. New licensable categories include virtual asset payments, open finance, and digital wallets. Key Take The UAE has introduced one of the first fully unified national frameworks that explicitly brings DeFi under central-bank oversight, going one step further than current regimes in other jurisdictions like Europe or the U.S., where DeFi is still not covered in regulation or only indirectly addressed. The UAE has established itself as a leading global crypto hub. Dubai and Abu Dhabi, in particular, are hotspots, with free zones like the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market ((ADGM)) fostering innovation through dedicated regulators such as the Virtual Assets Regulatory Authority (VARA). Compared to other crypto hubs such as Hong Kong and Singapore, UAE emphasizes innovation and competitiveness through its free-zone frameworks, creating a more flexible environment for Web3, tokenization, and DeFi experimentation. Tether Becomes a Major Global Gold Buyer Tether ( USDT-USD ) has significantly accelerated its gold accumulation, emerging as one of the largest purchasers of the metal in recent months. According to a new analysis from investment bank Jefferies, the company acquired 26 tonnes of gold in Q3 2025, lifting its total holdings to around 116 tonnes, roughly $9 billion, a level that only central bank gold reserves could compare, and would place Tether among the top 30 gold-holding central banks worldwide. While part of this stash backs Tether’s tokenized gold product XAUT ( XAUT-USD ), the total market cap of XAUT is only $1.6 billion, which translates into around 12 tons of gold. The majority of the gold sits within the firm’s broader reserve portfolio, where precious metals now make up roughly 7% of assets. Tether has been expressing a growing preference for “safe” real-world assets, allocating the company's profits into Bitcoin ( BTC-USD ), gold, and land. Beyond bullion, Tether has also been expanding into commodity-linked investments, including a reported $100 million commitment to mining royalties through Elemental Altus. Key Take USDT allocates a growing share of its reserve assets to hard assets like gold and Bitcoin, which now make up over 12% of total reserves. However, this approach contrasts sharply with the framework outlined in the U.S. Stablecoin Act, which would require stablecoins operating in the U.S. to be backed exclusively by U.S. Treasuries or similarly cash-equivalent instruments. Tether is developing a new U.S.-regulated stablecoin, USAT, led by Bo Hines, the former White House digital-assets advisor and current CEO of Tether U.S. The token will be issued through Anchorage Digital, a U.S.-regulated crypto bank, with its reserves custodied by Cantor Fitzgerald. The U.S. stablecoin market is poised to become intensely competitive, with established regulated players like Circle, payment leaders such as PayPal ( PYPL ) with PYUSD, and a growing number of licensed financial institutions all exploring or preparing to issue compliant stablecoins. Texas Takes Initial Step Toward State-Level Bitcoin Reserve Texas has taken a first step toward creating a state-managed bitcoin reserve by allocating $5 million to BlackRock’s [[IBIT]] bitcoin ETF, with the funding coming from state-appropriated money. While this is not yet a direct bitcoin holding, Texas is finalizing the structure, custody arrangements, and procurement process for its planned Texas Strategic Bitcoin Reserve. Several U.S. states have previously gained indirect crypto exposure through pension-fund investments, but none have yet established their own government-held bitcoin reserves. Texas may become the first to do so, with New Hampshire and Arizona also working on the same efforts at different stages of development. At the federal level, the current U.S. government’s bitcoin reserve comes entirely from seized assets, acquired through law enforcement actions. Following the Strategic Bitcoin Reserve Executive Order signed by President Trump earlier this year, seized bitcoins will not be sold and will be treated as long-term store-of-value assets, and in the meantime, federal officials are evaluating what a budget-neutral accumulation framework could look like. Key Take With Bitcoin dipping below $90,000, public entities around the world appear to be buying pullbacks. El Salvador recently added roughly $100 million in BTC to its holdings, while Texas deployed $5 million into a bitcoin ETF. Recent activity shows a growing number of global public entities increasing their Bitcoin exposure. The Czech National Bank approved and executed a $1 million digital-asset pilot purchase in late October 2025, including BTC and a USD stablecoin. Luxembourg’s sovereign wealth fund confirmed its 1% Bitcoin allocation in 2025 as part of a completed strategic rebalancing. In the Middle East, the Abu Dhabi Investment Council tripled its holdings in BlackRock’s IBIT ETF during Q3 2025, accumulating nearly 8 million shares ($518 million) ahead of the recent market volatility. As noted last week, current market selling is largely driven by retail ETF outflows, long-term holders taking profit, and four-year cycle believers reducing exposure. However, the backdrop also shows a steady base of long-term bidders from both public companies and government-linked entities. Public companies treating Bitcoin as a treasury asset can accumulate more decisively and at scale, while state institutions and sovereign bodies tend to move more gradually due to public-funding constraints, procedural requirements, and political considerations. Weekly Market Chart: Deleveraging Hits Ethena’s USDe Ethena’s USDe ( ENA-USD ), the synthetic stablecoin that earns yield from perpetual funding rates, has seen its total value locked (TVL) fall nearly 50%, from $14.8 billion in October to $7.6 billion. USDe’s yield, now around 5.1% APY, has declined from earlier double-digit levels as perpetual funding rates compressed alongside waning leverage demand. The TVL contraction appears primarily tied to the deleveraging of looping strategies across DeFi protocols such as Aave ( AAVE-USD ), where traders had used staked USDe (sUSDe) as collateral to borrow USDC, re-enter positions, and amplify exposure up to 10x. As yields fell below USDC borrowing rates (5.4%), many of these trades turned unprofitable, triggering widespread unwinds. Source: The Block Disclaimer: The information provided herein does not constitute investment advice, financial advice, trading advice, or any other sort of advice, and should not be treated as such. All content set out below is for informational purposes only. Original Post Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.
