Monero’s Hashrate Crisis: Qubic’s USDT Conversion Strategy Sparks Blockchain Security Debate
Recent developments in the Monero blockchain have raised significant concerns about the security and stability of mid-cap Proof-of-Work cryptocurrencies. On August 11, 2025, Qubic, a project led by IOTA co-founder Sergey Ivancheglo, allegedly seized majority control of Monero's hashrate. This potential hostile takeover has sparked rumors of a complete blockchain rewrite, with Qubic's 'useful proof-of-work' model aiming to redirect Monero mining power to convert XMR into USDT. The situation highlights vulnerabilities in blockchain networks and could have far-reaching implications for cryptocurrency markets and investor confidence.
Monero Blockchain Faces Potential Hostile Takeover Amid Hashrate Concerns
Rumors of a complete blockchain rewrite have emerged as Qubic, a project led by IOTA co-founder Sergey Ivancheglo, claims to have seized majority control of Monero's hashrate. The alleged takeover, achieved on August 11, 2025, raises questions about the security of mid-cap Proof-of-Work blockchains.
Qubic's strategy hinges on a 'useful proof-of-work' model, redirecting Monero mining power to convert XMR into USDT for token burns and validator rewards. This incentive-driven approach reportedly escalated from under 2% in May to a claimed 51% threshold by August. A six-block reorganization on Monero's chain suggests Qubic's hashrate dominance may be real.
The situation underscores the vulnerability of decentralized networks to economic engineering. While Qubic frames this as an experiment, the implications for Monero's immutability and security posture remain grave. Market watchers now scrutinize whether this marks a paradigm shift in blockchain governance or a temporary stress test.
A Tale of Two Chinas: Crypto Strategy, Ban or Build
Mainland China maintains a strict prohibition on cryptocurrency trading and mining, with authorities intensifying enforcement efforts. The People’s Bank of China (PBoC) underscores financial stability and capital controls as top priorities, citing regulatory challenges posed by cryptocurrencies and stablecoins. Recent crackdowns targeted schemes using Tether (USDT) for illicit cross-border transfers, part of broader measures to curb yuan depreciation and capital outflows.
Hong Kong, in contrast, is emerging as a regulated hub for digital assets, tokenization, and Web3 infrastructure. While Chinese companies are barred from holding cryptocurrencies directly, exposure occurs through offshore subsidiaries or Hong Kong-listed products. Discussions about a yuan-pegged stablecoin remain speculative, with state economists suggesting limited pilots in Shanghai or Hong Kong.
The e-CNY remains central to China's digital finance strategy, reflecting the state's preference for a controlled, centralized approach to digital currency innovation.
$76B Fiat Influx Signals Crypto Market Confidence
The stablecoin market is experiencing unprecedented growth, with $76 billion flowing into USDT and USDC since November 2024. Tether's market capitalization surged from $120 billion to $165 billion, while Circle's USDC nearly doubled from $34 billion to $65 billion. This capital injection reflects mounting investor Optimism as key political and regulatory milestones reshape the landscape.
Regulatory clarity has emerged as a critical catalyst. The GENIUS Act, signed into law by President Trump on July 18, established the first comprehensive framework for payment stablecoins. Financial institutions are now preparing to launch dollar-backed digital assets, signaling mainstream acceptance of crypto infrastructure.
Market analysts interpret these developments as early indicators of a broader bull cycle. The liquidity surge positions stablecoins as fundamental building blocks for crypto's next growth phase, with potential spillover effects across trading pairs and decentralized finance ecosystems.
