Mastercard Expands Digital Asset Use With Stablecoin Integration Coinbase Launches Bitcoin Yield Fund With 4% to 8% Annual Returns Tether Gold Reaches $770 Million Market Cap Amid Global Gold Demand Surge

Mastercard has announced a significant expansion into the digital asset space with a new global initiative that enables the use of stablecoins across its payment network. This move is part of a broader strategy to integrate cryptocurrencies into everyday transactions. The company has partnered with Circle and Nuvei to allow merchants to settle transactions in stablecoins such as USDC. Additionally, Paxos is involved in supporting other tokens like USDP. This initiative aims to make digital assets more accessible and usable in the real world.

As part of this expansion, Mastercard will launch the “OKX Card,” a debit product developed in partnership with the exchange OKX. This card will connect crypto trading and Web3 wallets to everyday spending, allowing crypto holders to use their digital assets anywhere Mastercard is accepted. This development bridges the gap between the digital and physical worlds, making cryptocurrencies more practical for daily use.

Coinbase Asset Management is set to launch a new Bitcoin Yield Fund starting May 1. This fund is designed to provide institutional investors with a way to earn passive income from their bitcoin holdings. The fund targets net returns of 4% to 8% annually and will initially be available to non-U.S. institutional investors. The yield will come from bitcoin basis trading, with potential future strategies involving lending and derivatives. Abu Dhabi-based Aspen Digital is one of the launch partners for this fund.

Basis trading involves profiting from the difference between spot and futures prices, but it carries risks. If bitcoin’s price suddenly spikes, the short futures position can require rapid margin increases to avoid liquidation. Additionally, as more investors crowd into the trade, spreads shrink, pulling down potential returns. This has already been observed, with futures short interest on the Chicago Mercantile Exchange dropping from $14.2 billion in late 2024 to $8.4 billion in recent months.

Tether’s gold-backed stablecoin, Tether Gold (XAUT), has reached a market cap of $770 million. The company reported its first independent attestation under El Salvador’s financial regulations, highlighting the token's physical backing. Each XAUT token is backed by one troy ounce of LBMA-certified gold, with a total of more than 7.7 tons locked in a secure vault in Switzerland. Strict verification and periodic audits ensure the token's physical backing.

The timing of this announcement coincides with a global surge in gold demand. Central banks, particularly from BRICS countries, accumulated over 1,000 metric tons of gold last year. Investors are also piling in, seeking refuge from economic uncertainty and heightened geopolitical risks. This increased demand for gold reflects a broader trend of investors turning to precious metals as a safe haven during times of economic instability.