Gm!
Welcome to the July Deal Flow Digest, your snapshot of every crypto / web3 funding round we tracked last month, plus some macro context shaping July’s term sheets.
At the bottom, be sure to check out the sheet below with ALL the deals, and the recent hackathon/demo day results (in the links).
Stablecoins. as a Trojan horse for fiscal dominance
The U.S. government has a debt problem. All governments do, but America is outsized, and growing fast. With over $34 trillion on the books…and roughly $6 trillion of it rolling over every few months via short-term Treasury bills….someone needs to keep buying.
But the usual suspects are fading. Overseas demand is drying up. Countries like China are steadily unwinding their Treasury holdings, now sitting at multi-year lows. Meanwhile, Washington just passed another “One Big Beautiful Bill,” and as Lynn Alden puts it, nothing stops this train. The message? More spending is coming.
So how do you square soaring issuance with shrinking demand?
Simple: grow your way out. Inflate asset prices, stimulate financial markets, and…find new buyers for all that debt.
And that’s exactly what’s happening.
Pull out all the stops? Grow the asset base, loosen banking rules (e.g. supplementary leverage ratio, amongst others), loosen investor accreditation rules, sprinkle a dash of “crypto in your 401(k)”.... And the biggest lever: push stablecoins into the mainstream. The goal isn’t so subtle.
Combined, Tether and Circle would be the 18th-largest holder of US debt—trailing South Korea but surpassing Germany. If we take a closer look at the 2024 calendar year, Tether was the 7th largest buyer of US treasuries behind the UK and Singapore, while the largest sellers were China and Japan.
When dollars go onchain as stablecoins, every stablecoin is backed by government paper. Voilà: each stablecoin minted becomes a new buyer of U.S. Treasuries.
The GENIUS Act changes the game
Signed in July, the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act does three things:
Requires 1-for-1 reserves in “U.S. dollars or short-term Treasuries.”
Mandates monthly reserve disclosures for transparency.
Lets banks issue their own stablecoins.
Issuers must keep every token fully reserved in cash or short-dated Treasury notes and report those reserves each month. That single requirement: one token, one government dollar behind it, turns stablecoins into a permanent bid for U.S. debt.
Treasury Secretary Scott Bessent now projects a $3.7 trillion stablecoin market by 2030—a 15× move from today’s ~250B market.. At that size, fully-reserved issuers would be forced to park well over $3 trillion into Treasuries, enough to cover roughly half of today’s entire bill stock and materially suppress front-end yields.
Now imagine a tiny edit down the road: drop the word “short-dated.” Today the statute specifies “short-term” Treasuries. Remove that one adjective in a future amendment and Bessent could nudge issuers to buy 2-year notes next month, 10-years the month after, fine-tuning yields at Treasury’s will. Suddenly the Treasury can nudge issuers to shop anywhere along the curve, easing pressure wherever yields look jumpy, all without the Fed firing a shot. That’s not regulation; that’s yield curve control by design.
That is fiscal dominance with a fintech veneer.
Why Washington loves this flywheel
What a phase shift.
Crypto may still be polarizing in Washington…but stablecoins? They’re the bipartisan darling. Pump “crypto” so we can pump “stablecoins” aka Washington’s stealth solution to structural debt demand.
2 tweets from yesterday 30-July-25:
Why? Stablecoin economics are brutally simple:
A user wires a dollar to the issuer.
The issuer mints a stablecoin (digital dollar) into the user’s wallet.
The issuer parks the dollar in a Treasury and keeps the yield.
No interest paid to holders. No FDIC insurance required. Just clean, recurring revenue off government debt. It’s simple, ultra-profitable, and the perfect vehicle for Washington’s needs.
This model has made Tether the most profitable company in the world per employee, and Circle the hottest IPO of the year. Stablecoin issuers are already among the top 20 holders of U.S. Treasuries…and that’s before the banks get involved in a major way.
Now that the GENIUS Act opens the door, you can bet JPMorgan, Citi, and fintechs are spinning up their own stablecoins. And they are. At scale, this becomes a privatized form of yield curve control, driven not by the Fed, but by market-based demand for on-chain dollars.
And they’re not hiding the plan. As Treasury Secretary Scott Bessent said at the GENIUS Act signing:
“Stablecoins represent a revolution in digital finance. The dollar now has an internet-native payment rail that is fast, frictionless, and free of middlemen. This groundbreaking technology will buttress the dollar’s status as the global reserve currency, expand access to the dollar economy for billions across the globe, and lead to a surge in demand for U.S. Treasuries, which back stablecoins. The GENIUS Act provides the fast-growing stablecoin market with the regulatory clarity it needs to grow into a multitrillion-dollar industry. The signing of this bill marks a seminal moment for digital assets and dollar supremacy.”
Fiscal dominance is here, just not the way you pictured it.
Issuers, builders, and the dollar all win
Stablecoins may have started as a crypto-native curiosity, but now, they deliver an unexpected triple-win for America. A rare win-win-win for USA with stablecoins…and it entrenches dollar hegemony in the process. Who wins?
Banks (stablecoin issuers) finally get a digital deposit product with fat margins and tiny overhead.
Developers gain a programmable, globally accessible dollar rail. One that’s built for the internet, composable with DeFi, and natively supports everything from AI-driven payments to low-cost remittances and micropayments..
Treasury officials secure a fresh pool of captive buyers, who are legally required to hold treasuries, bringing persistent, programmatic demand for US Debt without relying on foreign creditors.
What’s more, this alignment isn’t fragile, it’s self-reinforcing.
More demand for stablecoins → more Treasuries purchased by issuers → higher interest revenue → greater issuer profitability & incentives → more investment in ecosystem (developers, integrations, on/off‑ramps) → improved UX & use cases → more adoption → more demand for stablecoins.
It’s a flywheel. And at the center of it is the dollar. Now not just the world’s reserve currency, but its reserve protocol. A self-feeding loop that cements the dollar’s dominance on-chain.
What it means for the broader crypto stack
As trillions of new digital dollars flow onto public ledgers, the crypto stack starts to transform and the sandbox era ends:
DeFi morphs from trading toys to real financial plumbing.
Bitcoin looks sturdier as digital gold in a dollar-stablecoin world.
Smart-contract platforms (ETH, SOL) soak up genuine economic activity, shifting from speculative casinos to execution layers for real economic activity.
Tokenized stocks, bonds, and other real-world assets finally have a compliant cash leg, clearing the path for 24/7 capital markets.
Perhaps reminiscent of eurodollars in the ‘60s, ADRs in the ‘90s, or ETFs in the ‘00s, the liquidity for tokenized assets will start first on the margins and then move toward the center.
Today, you can trade tokenized stocks and bonds onchain. But it’s still early. Full ownership is muddied by offchain wrappers—SPVs, custodians, intermediaries.
The real shift happens as confidence and liquidity grow. Over time, we move toward native, fully onchain financial instruments—accessible globally, 24/7, without gatekeepers. That’s the default future DeFi is building toward.
The takeaway for investors
Stablecoins aren’t just plumbing for crypto traders anymore. They’re morphing into the Treasury’s stealth weapon: a structural, always-on bid for U.S. debt… disguised as financial innovation. A perfect stealth debt-distribution network.
The investment story shifts from “crypto goes up” to “crypto becomes infrastructure.” Perhaps the opportunity lies in the rails, e.g. issuers, custody, base layers…before the flywheel spins at full speed.
Fiscal dominance has “entered the chat,” and stablecoins are the microphone.
Top 11 Crypto Funding Rounds
Strategy | IPO | CeFi | $2.52B | 2025-07-29
Strategy (Nasdaq: MSTR) upsized its Stretch Perpetual Preferred Stock offering from $500M to $2.52B. The firm continues its dual focus: expanding enterprise analytics and acquiring Bitcoin as a long-term treasury asset.
MARA | Post-IPO | Infrastructure | $950M | 2025-07-27
MARA (NASDAQ: MARA), a global leader in digital asset compute, raised $950M in a Post-IPO round to expand operations securing blockchain ledgers and converting stranded energy into economic value.
Mill City Ventures III | Post-IPO | Others | $450M | 2025-07-30
Mill City Ventures III (NASDAQ: MCVT), a non-bank lender and specialty finance firm, raised $450M and launched a new SUI Treasury initiative as part of its digital asset expansion.
Upexi | Undisclosed | DeFi | $200M | 2025-07-10
Upexi raised $200M through equity and Solana-backed convertible notes to double its Solana treasury. The move reflects institutional confidence in blockchain-based treasury strategies.
Satsuma Technology Plc | Post-IPO | Others | $134.32M | 2025-07-23
Satsuma Technology (formerly Tao Alpha) raised $134.32M to build AI agents and infrastructure on Bittensor, marking a UK record for Bitcoin treasury initiatives.
Agora | Private | CeFi | $50M | 2025-07-09
Agora raised $50M to grow AUSD, its white-label stablecoin offering. The firm aims to bring low-cost, USD-backed financial tools to underserved global markets.
RD Technologies | Extended Series A | CeFi | $40M | 2025-07-29
Hong Kong-based RD Technologies raised $40M ahead of the region’s stablecoin licensing rollout. The firm joins HKMA’s stablecoin sandbox, helping shape Web3 financial infrastructure.
Hilbert Group | Post-IPO | Others | $31.21M | 2025-07-14
Hilbert Group, a digital asset investment firm focused on quantitative strategies, raised $31.21M to enhance its algorithmic trading operations.
Distinct Possibility Studios | Undisclosed | Web3 | $30.5M | 2025-07-03
Distinct Possibility Studios raised $30.5M to launch its Web3 FPS title “Reaper Actual” on Steam and Epic. The studio specializes in large-scale multiplayer blockchain-integrated games.
Stable | Seed | Infrastructure | $28M | 2025-07-30
Stable, a Layer 1 blockchain launched by Bitfinex and Tether, raised $28M to expand gas-free USDT payments and stablecoin-native smart contracts.
Bitzero | Undisclosed | Others | $25M | 2025-07-23
Kevin O’Leary-backed Bitzero raised $25M to expand its crypto-powered, environmentally sustainable data center operations.
Click to see all of July’s funding rounds here:
July Crypto VC Fund fundraise Announcements
VCs are continuing to announce their new raises.
2025‑07‑22: Dan Tapiero launches $500 million fund under new 50T brand to back growth‑stage blockchain and Web3 companies. The rebrand reflects his projection that the crypto ecosystem will reach $50 trillion in the next decade.
2025‑07‑10: Propel Venture Partners closes $100 M Fund V to expand investments in technologies reshaping the financial services ecosystem.
2025‑07‑08: Ego Death Capital raises $100 M to finance Bitcoin‑focused startups aimed at Series A software companies generating $1M–$3M revenue, with early portfolio including Roxom, Relai, and Breez.
2025‑07‑03: Ondo Finance and Pantera launch $250 M Ondo Catalyst initiative to accelerate tokenization of real‑world assets and on‑chain capital markets. Pantera Capital leads strategic capital deployment.
As a reminder, if you are interested in learning more about Bankless Ventures Fund II, please fill out this form and we will be in touch!
Hackathons
Upcoming
ETHGlobal NY | Aug 15 - 17
NYC. $225k in prizes.
ETHGlobal New Delhi | Sep 26 - 28
New Delhi. $175k in prizes.
Ongoing
Broker API Hackathon | May - Oct
Virtual. $1M USDT in prizes.
Unite Defi | July 25 - Aug 6
Virtual. $525k in prizes.
World Computer | July 18 - October
Virtual. $300k in prizes
Finished (results in links)
ETHGlobal Cannes | July 4 - 6
Cannes, France. $300k in prizes.
Hacking Paris | July 11 - 13
Paris, France. $150k in prizes.
Demo Days
Upcoming
SUI Demo Pitch Day | Aug 7
Vietnam
Tenity Singapore XRPL Accelerator Cohort VI Demo Day | Aug 14
Singapore
EASY Residency x MVB Demo Day | Aug 15
NYC
That’s a wrap for July!
Thank you and good luck out there!
Ben Lakoff, CFA
https://twitter.com/benlakoff
Fiscal dominance indeed, or at least another avenue to doing so!
https://divistockchronicles.substack.com/p/stablecoins-the-next-evolution-of