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US Treasury Secretary Janet Yellen Urges Congress To Pass Crypto Legislation

In a recent statement before the House of Representatives, US Treasury Department Secretary Janet Yellen emphasized the need for Congress to pass legislation that provides clarity and regulation in the crypto markets. 

Secretary Yellen Calls For Action ‘Digital Asset Risks’ 

During the Financial Committee hearing, Yellen highlighted the “risks” associated with digital assets and called for measures to address potential vulnerabilities and non-compliance with applicable laws and regulations.

Yellen specifically mentioned concerns related to runs on crypto-asset platforms, stablecoins, and the “proliferation” of platforms acting outside regulatory boundaries. 

The Treasury Secretary stressed the importance of enforcing existing rules and regulations while urging Congress to enact legislation specifically targeting stablecoins and “non-securities” crypto assets in the spot market.

Notably, Taylor Barr, head of policy at the blockchain trade association Chamber of Digital Commerce, pointed out that the bipartisan FIT for the 21st Century Act, led by Representative French Hill, aligns with Yellen’s call for market structure and regulation.

Hill, a proponent of the legislative environment for crypto, previously highlighted the progress made in the House of Representatives. He emphasized passing the first comprehensive regulatory framework for digital assets and the prudent approach to stablecoins. 

Furthermore, Hill believes that these initiatives address significant “regulatory gaps” and contribute to the crypto industry’s growth.

Pro-Crypto Stance And Legislative Initiatives Align

Barr also commended the Clarity for Payment Stablecoins Act proposed by the Chairman of the US Financial Committee, Patrick McHenry. 

This act aims to establish consistent oversight and consumer protection for payment stablecoins, incorporating successful state-level regulations and striking a balance between innovation and regulatory certainty.

McHenry, who has been vocal about the importance of the US leading the financial system of the future, has already emphasized the bipartisan progress on legislation to address the regulatory challenges posed by digital assets. 

McHenry called for the “completion of the job,” highlighting the Clarity for Payment Stablecoin Act as a crucial step towards establishing a federal framework for stablecoins.

Overall, the convergence of Secretary Yellen’s call for regulation, Representative Hill’s legislative initiatives, and Chairman McHenry’s pro-crypto stance reflect a growing momentum toward establishing a comprehensive regulatory framework for the crypto industry. 

However, it remains to be seen how Secretary Yellen’s proposed regulatory enforcement ideas and proposals will strike a balance between fostering innovation, as emphasized by McHenry and Hill while ensuring the growth of nascent technology. 

As discussions on crypto legislation continue, the industry eagerly anticipates the outcome, seeking a regulatory environment that provides clarity and consumer protection and positions the United States at the forefront of digital asset innovation.

Crypto

Featured image from Shutterstock, chart from TradingView.com 

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Solana Unveils Token Extensions As SOL Bounces Back, Surging 5%

The Solana Foundation, a non-profit organization dedicated to decentralization, adoption, and security on the Solana network, has launched token extensions.  

Solana Token Extensions Gains Traction

According to a January 24 announcement, token extensions provide developers, enterprises, financial institutions, and Solana-native development teams with a comprehensive suite of turnkey solutions for advanced token functionality. Anatoly Yakovenko, co-founder of Solana and CEO of Solana Labs, commented on the launch, stating: 

Token extensions build on the characteristics that make Solana the ideal destination for developers. Solana is the first network to offer this level of integrated developer and user experience in a single token program. We’re already seeing the potential to build using token extensions via deployments from some of the most recognizable names in crypto.

Industry giants Paxos and GMO-Z.com Trust Company Inc. (GMO Trust) are leading the way in adopting token extensions. As announced by the Solana Foundation, these companies are “leveraging the benefits” of token extensions to issue stablecoins on the Solana blockchain. 

As previously reported, Paxos, a regulated blockchain and tokenization infrastructure platform, expanded its stablecoin issuance to the network in December. Similarly, GMO Trust announced the launch of the first regulated Japanese yen stablecoin and their own US dollar stablecoin on the Solana network. 

New Standards For Blockchain Compliance? 

Sheraz Shere, Head of Payments at the Solana Foundation, emphasized the appeal of the Solana network for enterprise-grade companies entering the web3 space. Shere stated: 

Companies like Visa, Worldpay, Stripe, Google, and Shopify have already seen the performance advantages inherent to the Solana network and have launched solutions and applications that are only possible on Solana. With token extensions, we are expanding what is possible for enterprise adoption of blockchain by natively enabling features that matter to large regulated enterprises.

Token extensions, designed to cater to builders across diverse industries such as stablecoins, real-world assets (RWA), and payments, offer a range of interesting features:

  • Transfer Hooks: Enables token issuers to exert control over token interactions, empowering developers to create intricate and flexible token mechanisms.
  • Transfer Fees: Provides the ability to charge fees for each token transfer, offering sustainable revenue models for different types of tokens built using token extensions.
  • Confidential Transfers: Utilizes zero-knowledge proofs to encrypt the transfer amount while publicly sharing the source, destination, and token type. This ensures compliance while preserving privacy.
  • Permanent Delegate Authority: Grants token issuers absolute authority over their tokens, particularly for those requiring revocation ability, such as licenses or credentials.
  • Non-transferability: Restricts token transfers to the issuer only, making it ideal for unique user identification and credentialing purposes.

Ultimately, with the launch of token extensions, Solana aims to position itself as a force in blockchain development, offering builders the tools to create new applications across various industries. 

Solana

The SOL token experienced a sharp drop of over 28% in the past 30 days, leading to a decline to the $79 level. However, the token has recovered in the past 24 hours with a 5% bounce, leading to a current trading price of $87.

Featured image from Shutterstock, chart from TradingView.com 

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Tether (USDT) Market Cap Reaches New Peak, Edges Toward $84 Billion Mark

Tether USDT has seen its market cap value reach new highs in the month of July. According to a report by on-chain analytics company Into The Block, the world’s largest stablecoin is steadily approaching the key $84 billion mark.

Based on data from DeFiLlama, USDT’s market cap is up by over $480 million since the beginning of July, indicating an increasing level of adoption. Generally, the stablecoin’s total market share value has been on the rise for the majority of 2023, moving from $66.23 billion on January 1 to its current value of $83.80 billion.

In tandem with USDT’s market cap growth, Into The Block also noted the token’s circulating supply is up by almost 30% year to date. Interestingly, USDT’s market growth has also been reflected in its operator’s development. 

Back in May, Tether Holdings Ltd published its quarterly assurance report announcing a net profit of $1.48 billion for Q1 2023, bringing its excess reserve to an all-time high of $2.44 billion. 

Into The Block noted that currently, Tether is well on course to surpass those profit levels in Q2 and Q3 as there is an increase in the amount of USDT being issued.

Tether (USDT) Increasing Stablecoin Dominance In 2023

The general stablecoin market has recorded a major decline in 2023, losing over $12.17 billion since the start of the year. However, during this period,  USDT has been waxing strong, accumulating over about $17 billion in market cap.

According to data from DeFiILama, Tether’s market dominance has grown by about 19% in 2023, as the token now accounts for two-thirds of the stablecoin market. 

While this development is mainly driven by USDT’s impressive performance, there has also been a notable decline in the market shares of some other prominent stablecoins.

 

For example, Circle’s USD Coin (USDC), which ranks as the second-largest stablecoin, has seen its market cap fall by a staggering 40% in 2023, with the current value now set at $26.26 billion.

Meanwhile, Binance USD (BUSD), with a market cap of $3.71 billion, has shed over 77% of its market shares following an embargo on its issuance earlier this year. 

At the time of writing, Tether’s value remains pegged at $1. With a market cap of 83.80 billion, the stablecoin ranks as the third biggest cryptocurrency falling Bitcoin (BTC) and Ethereum (ETH)

Tether

DeFi Stablecoins Gearing Up To Match Centralized Counterparts

In other news, DeFi stablecoins have been rolling out some impressive upgrades as they attempt to close the gap between them and their centralized competitors. In a tweet on Friday, Into The Block highlighted some of these developments.

Firstly, the MakerDAO recently hiked the DAI Savings Rate (DSR) to 3.49%, and there is the possibility of an increase to 8% in the coming weeks. Furthermore, the Frax protocol will be launching FRAX v3 in August as they look to make FRAX a fully algorithmic token, delinking its minting process from the USDC token.

In addition, there is Lybra Finance which lends its stablecoin eUSD to users at an interest rate of 0%. Other DeFi stablecoins with impressive features or upgrades include Curve Finance’s crvUSD and Aave’s GHO.