The crypto industry is facing growing pressure from regulatory scrutiny, with Congressional hearings on debanking and movement on stablecoin legislation.
The past week was marked by significant developments in the crypto space, including high-profile Congressional hearings on debanking, movement on stablecoin legislation, and important product launches.
Stablecoin Legislation Gains Momentum
Senator Hagerty of Tennessee introduced a new stablecoin bill that outlines an oversight regime for stablecoin issuance. This proposal builds on a bill that passed the House last year but fell in the Senate. With Republicans now in control, it is more likely to pass this year. CoinDesk’s Jesse Hamilton reported on the news.
Stablecoins are a type of cryptocurrency designed to maintain a stable value relative to a fiat currency, such as the US dollar.
As their popularity grows, governments and regulatory bodies are taking steps to establish clear guidelines for their use.
In 2020, the US Securities and Exchange Commission (SEC) issued guidance on how to determine whether a stablecoin is a security or not.
The European Union has also proposed regulations for stablecoins, aiming to ensure investor protection and market stability.
The Senate also held hearings on the coordinated policy of institutions like the FDIC to deny financial services to crypto companies during the Biden years (aka debanking). Nathan McCauley, CEO of Anchorage Digital, testified and shared his experience with CoinDesk. Consensys founder Joe Lubin revealed that his company had been debanked twice.
Debanking is the process of closing an individual's bank account, often due to suspicious activity or non-compliance with regulatory requirements.
This can be initiated by a financial institution itself or forced upon customers due to government regulations.
Debanking disproportionately affects vulnerable populations, including immigrants and minority groups, who may rely on banking services for essential transactions.
According to a 2020 study, over 1.5 million Americans were debanked between 2017 and 2019, highlighting the need for greater transparency and accountability in this process.
New Blockchain Launches
Ondo Finance introduced a new tokenization blockchain in preparation for an expected wave of institutional interest in RWAs. Trump-backed World Liberty Financial immediately bought $470,000 worth of ONDO, the platform’s governance token. Meanwhile, Berachain debuted a mainnet and a 79 million-strong airdrop. At the time of writing, BERA’s market cap was already over $800 million.
Blockchain technology was first launched in 2008 by an individual or group using the pseudonym Satoshi Nakamoto.
The launch marked the beginning of a new era in technology, revolutionizing the way data is stored and transactions are made.
Initially designed for Bitcoin, blockchain's potential extended far beyond digital currency.
Its decentralized nature, security, and transparency made it an attractive solution for various industries, including finance, healthcare, and supply chain management.
Ethereum News
News around Ethereum has been less rosy in recent months. JPMorgan attributed ether’s underperformance to competition from rivals like Solana and its lack of a compelling narrative (like bitcoin). However, Ethereum did move forward on its Pectra upgrade, and its cheerleaders run deep, even on Wall Street.
Gold-Backed Cryptos Outperform
Bitcoin is often referred to as ‘digital gold,’ but outside of it, the actual precious metal moves cryptocurrencies too. Gold’s historic run has seen prices outperforming the traditional market, taking gold-backed crypto with it. Tokens like PAXG and XAUT were among the best-performing tokens this year, outperforming even the ‘digital gold’ due to the bullion’s rally.
Internet Privacy Case
In an important case for internet privacy, “Alexey Pertsev, one of the developers of Tornado Cash, an Ethereum mixer, was released from jail pending an appeal.’ He had been sentenced to 64 months inside last year.
- coindesk.com | Weekly Recap: Crypto Debanking in the Spotlight
- yahoo.com | Weekly Recap: Crypto Debanking in the Spotlight
