On August 10, 2025, the Kaspa Ecosystem Foundation (KEF) released a research paper titled "An Economical Analysis of Stable Coin: M1, M2, M3 or M4?", which explores stablecoins and real-world assets (RWA) through the Modern Monetary Theory (MMT). 

The paper seeks to address a question that is still debated amongst economists: To what extent can stablecoins be classified as money? "As it notes, "From a macroeconomic perspective, money is commonly defined as a medium of exchange, as a unit of account, and as a store of value." 

Monetary assets are generally classified as M1, M2, M3, or M4 assets, with the definitions evolving. 

In 1944, the U.S. Federal Reserve Board defined M1 money as: 1) physical cash held by the public, and 2) demand deposit accounts at commercial banks. Later in 1971, the Fed broadened the definition of M2 to include forms of money used as short-term stores of value, like savings accounts and money market instruments. Eventually, the classification system grew to include M0 to M4, and was based on the liquidity and rate-adjusted discount rate (RADR). RADR, also known as risk-adjusted discount rate, adjusts the base discount rate, usually by the weighted average cost of capital (WACC) or risk-free rate, to reflect the risk associated with the asset. (RADR = Base Rate + Risk Premium.) This idea is the simple principle: higher risk, higher return. 

The classification framework describes the asset's purpose and capacity within the financial system. Cash remains the most widely used and recognized form of money, classified as M0 for its high liquidity and low risk. However, physical cash is limited by its form, and inflation erodes its ability to preserve wealth.

The KEF paper cites a McKinsey study projecting the stablecoin transaction volume to grow from $230B in 2025 to$2T over the next three years. Meanwhile, stablecoin-issuer Circle (NYSE: CRCL) has seen its stock price rise by more than 200% since going public. This surge in adoption raises a key question: Where do stablecoins belong on the RADR scale—M0, M1, M2, M3, or M4?

M0: Stablecoins could not be classified as an M0 asset because a Central Bank does not issue them. The United States just passed the Anti-CBDC Surveillance State Act, prohibiting the usage of Central Bank Digital Currencies (CBDCs). Currently, the most popular stablecoins are issued by public companies, Circle and Tether. 

M1: The International Monetary Fund (IMF) and European Central Bank (ECB) describe stablecoins as deposit-like instruments. China already uses M1-class stablecoins in platforms like Alipay and WeChat, where users can make payments and earn modest interest, with funds held by Ant Group and Tencent.

M2: This category covers time deposits that earn interest over a fixed term. Stablecoins qualify here when staked or lent to earn a predictable yield.

M3: Stablecoins can be viewed as demandable debt instruments issued by private entities, whose issuance and collateral reuse expand liquidity much like M3 assets such as Treasuries, marketable securities, and commercial paper.

M4: Stablecoins could also resemble M4 assets—tokenized bundles of financial instruments, such as a money market account of U.S. dollars and low-risk bonds. Stablecoins differ from managed funds in that users derive benefit from utility, not from returns. 

The paper summarizes this view:

"The novelty of stablecoin relies on its combining feature of the liquidity and immediacy of M0, the transaction volume typical of M1, the yield-bearing properties of M2, the marketable nature of M3, and potentially even the asset securitization features associated with M4. This hybrid profile positions stablecoin as a multi-dimensional money."

It also stresses that not all stablecoins are created equal, and that their characteristics vary significantly across issuers and structures.

The authors close with a reminder that monetary policy must adapt to meet the challenges and opportunities of new asset classes:

"For governments and regulatory authorities, a nuanced comprehension of stablecoins will be critical for fostering innovation, enhancing monetary policy, and reshaping the architecture of the global financial system."

The Wizard Speaks on Quantum Computers

The XXIM podcast recently featured Dr. Shai Wyborski, a PhD in quantum cryptography from the Hebrew University of Jerusalem, to discuss a big question: do quantum computers threaten Bitcoin? The answer, of course, is: yes, they do.

Dr. Wyborski has spent much of his academic career focused on post-quantum cryptography, with roughly 60% of his doctoral thesis centered on migrating Bitcoin to a post-quantum world. His perspective is clear: if we woke up twenty years from now and scalable quantum computers were in every garage, all pre-quantum Bitcoin would be vulnerable.

Dr. Wyborski explains quantum computing with a simple analogy. At an abstract level, classical computers can be thought of like machines using pulleys and levers—they manipulate bits (zeros and ones) in predictable ways. Quantum computers, however, introduce a new operation: qubits that can exist in superposition, meaning they're both 0 and 1 at the same time. This allows quantum machines to explore multiple computational paths simultaneously, making them powerful for solving problems that classical computers struggle with. As Dr. Wyborski states: quantum computers can't increase the type of problems that such a computer can do, but we do believe that it increases the set of problems that such a machine can solve quickly."

One breakthrough example is Shor's Algorithm, which efficiently finds the prime factors of an integer. While this may sound niche, it's critical — because factoring and discrete logarithms form the foundation of public-key cryptography, the technology behind signatures and encryption that proves ownership used in most cryptocurrencies. If those signature schemes break, anyone could forge transactions.

Experts estimate that by 2035, scalable quantum computers will likely exist by 2035, posing a realistic threat. To break Bitcoin's security, researchers believe around 2,500 logical qubits would be needed, which translates into millions of physical qubits when accounting for noise, error correction, and algorithm limitations. Progress is steady, but slow.

The straightforward solution is post-quantum signature schemes, which are cryptographic methods designed to withstand quantum attacks. Dr. Wyborski himself worked on a protocol that achieves a 90% accurate blockchain without signatures, pointing toward potential future fixes.

Kaspa, with its high-throughput BlockDAG architecture, could adapt to post-quantum solutions more easily than Bitcoin's slower, linear chain. Its scalability opens the door to integrating more complex or resilient cryptographic schemes without crippling performance.

Dr. Wyborski is now working on a new project, Tectonic.xyz, focused on building post-quantum blockchain solutions. His work highlights the urgent need for future-proofing crypto — before the quantum era arrives.

Kasplex Testnet Updates

We’re eagerly awaiting the launch of the Kasplex L2 — a Layer 2 solution built on top of Kaspa, funded by the Kaspa Ecosystem Foundation (KEF). Once live, Kasplex will bring smart contracts and expanded DeFi capabilities to the Kaspa network.

While we wait, Kasplex has shared an update highlighting recent milestones on their testnet, as of August 12, 2025:

• Over 14 million transactions processed, averaging 5.4 transactions per block

• Over 2.6M blocks generated

• Average block time of just 1 second

• Over 270,000 active wallets

Alongside these technical achievements, Kasplex is undergoing a comprehensive Layer 2 security audit, which is expected to be completed soon. The results will be released to the public once finalized.

We’re excited for the upcoming mainnet launch — you can track the real-time countdown at kas.live. In the meantime, explore their testnet and see the progress firsthand.

The Fed Ends its Crypto Oversight

The Federal Reserve has announced it will sunset its Novel Activities Supervision Program and transition oversight of crypto and fintech-related activities back into its standard supervisory process. Launched in 2023, the program helped the Fed deepen its understanding of these emerging areas. 

As the announcement explains: 

“Since the Board started its program to supervise certain crypto and fintech activities in banks, the Board has strengthened its understanding of those activities, related risks, and bank risk management practices. As a result, the Board is integrating that knowledge and the supervision of those activities back into the standard supervisory process and is rescinding its 2023 supervisory letter creating the program.”

To read the full press release, please see the official release: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20250815a.htm

Igra Labs Testnet Update

Igra Labs has successfully launched its internal rollout, with nine full Igra nodes now live across Europe, proving L2 history from Genesis. During this stage, the team uncovered and stress-tested a rare race condition in Reth under BlockDAG sequencing. With stellar support from Paradigm’s developers, a fix has already been submitted and will undergo about two weeks of internal validation before external operators get access. This milestone marks a significant milestone in Igra Labs’ mission to deliver sub-second finality and robust infrastructure for the Kaspa ecosystem.

Kurncy Wallet Available in the App Stores

Kurncy Wallet has rolled out its v1.1 update on August 13, 2025, now available on both the Apple App Store and Google Play. In partnership with the KaspaCom marketplace, the new release brings a full mobile experience where users can seamlessly buy, sell, and trade KRC20 tokens and KNS domains directly from the app. 

KaspaCom Mobile Wallet Coming Soon

KaspaCom is gearing up to launch its new mobile wallet, recently giving the community a sneak peek with a demo transaction shared on X. The wallet will support sending, receiving, and trading Kaspa, KRC20 tokens, NFTs, and KNS domains—all from a sleek, intuitive interface. Early reactions have been overwhelmingly positive, with users excited to bring the full Kaspa experience to mobile.

Kastle Wallet New Website - kastle.cc 

The Kastle Website has a sleek UI. You are able to send and receive KNS domains. Users can mint, transfer, and deploy tokens. Users can connect ot Zealous Swapo, and KaspaCom. The Kastle Wallet documentation states that there is enhanced security with Ledger Integration. View the Kastle Wallet docs here: Kastle Wallet Documentation | Kastle Official Documentation.   

51% Attack Unlikely on Kaspa 

Kaspa Daily recently published an article on X explaining why a 51% attack is far more difficult to achieve on Kaspa. A 51% attack occurs when one group gains majority control of a blockchain’s mining power, allowing them to block transactions or double-spend coins.

This scenario recently played out on the privacy-focused proof-of-work (PoW) network Monero. Qubic, a mining pool led by IoTA co-founder Sergey Ivancheglo, rose rapidly, expanding from less than 2% of the network’s hashrate in May 2025 to surpass 25% by July, ultimately taking control of more than half the total hashrate. According to the article, “mined XMR (Monero) was converted to USDT to buy and burn QUBIC tokens, offering miners significantly higher returns and drawing even more hashpower into its orbit.” While debate remains over whether this was an intentional attack or simply the result of a dominant mining pool, the impact was clear: Monero’s price dropped sharply, and some exchanges halted XMR trading.

Though 51% attacks have been rare in blockchain history, they remain a critical risk. Kaspa Facts highlights several factors that make Kaspa far more resistant:

1. 1. BlockDAG and GHOSTDAG Consensus

2. 2. High Block Rate and Inclusive Mining

3. 3. Economic Security Through ASIC Scarcity

4. 4. Secure Pruning with UTXO Commitments

The article concludes: “While no blockchain can claim absolute immunity, Kaspa’s design significantly raises the cost and complexity of a majority attack, turning what happened to Monero from a worrying possibility into a near-impractical scenario.” 

Check out the full article here: Kaspa Daily on X: "Monero 51% Attack and Why It’s Far Harder to Pull Off on Kaspa" / X. 

Kaspa Facts Releases New Article

Kaspa Facts is in the midst of an in-depth, multi-part series that demystifies how ordering works in the Kaspa protocol. The series covers:

• Part 1: Selecting a Parent

• Part 2: Mergeset Ordering

• Part 3: Classifying Blue/Red Blocks

• Part 4: Work Calculation for Parent Selection

The latest release, part 4, dives into "Kaspa Blue Work" and how it factors into the protocol’s unique ordering mechanism. Each article is accompanied by original graphics that visually clarify these core concepts. The upcoming installment will explore the much-anticipated "magic k parameter" and its role in Kaspa’s design.

Newcomers are encouraged to catch up on the entire series, while long-time followers should check out the newest article, that just dropped this week: Kaspa Blue Work - Ordering pt4 - Learn Kaspa. 

Kaspa Hub Updates

Launched in June 2025, Kaspa Hub is an open-source, community-driven portal that brings together key resources for the Kaspa ecosystem. The site offers technical documentation, block explorers, and a real-time BlockDAG visualizer, along with directories for wallets, exchanges, merchant solutions, developer tools, and more. Their focus is on building simple and robust tools and helping newcomers learn about kaspa.

Kaspa Hub continues to grow, recently updating to version 2.0, which delivers a smoother experience with optimized SEO, updated CSS, improved PWA support, verification badges, faster page loads, refreshed design elements, and a searchable article library. Most recently, a Reviews feature was introduced, allowing users to read and share feedback on Kaspa projects.

Check it out at kaspahub.org . For those interested in building their own version, information is also available on GitHub, at https://t.co/NiohZJ8nDn . Be sure to follow @KaspaHub on X to stay up-to-date with future updates.