Seeds of Wisdom RV and Economic Updates Thursday Evening 3-27-25
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SENATE BANKING COMMITTEE DELAYS VOTE ON SEC CHAIR NOMINEE
The Senate Banking Committee has reportedly delayed its vote on the nomination of Paul Atkins as the next chair of the U.S. Securities and Exchange Commission
Journalist and host of Crypto in America podcast Eleanor Terrett, shared this development via X. The former FOX Business reporter cited a Senate aide as the source of the news. According to the aide, the committee will “not vote today on Atkins or the other nominees, as is typical practice.”
Instead, nominees will be required to submit written responses to committee questions ahead of a markup vote. A date for that vote has not yet been set.
Atkins’ nomination and the SEC’s shifting stance
Atkins, President Donald Trump’s pick to replace former SEC chair Gary Gensler, faced the Senate’s banking committee on March 27.
Lawmakers also held a confirmation hearing for Jonathan Gould, nominated to lead the Office of the Comptroller of the Currency.
Gensler’s time at the helm of the top securities watchdog in the US is mostly seen as negative and anti-crypto.
His regulation by enforcement action approach that saw SEC sue multiple crypto companies and launched investigations against several is one of the things the commission is looking to drop completely. Indeed, several cryptocurrencies rallied in the wake of the ex-SEC chair’s resignation.
Despite Gensler’s exit, regulation remains a top topic in crypto. Recent moves to withdraw lawsuits and end investigations suggests this is the case.
Facing questions from the banking committee, Atkins says the SEC under his leadership will be keen on regulatory clarity.
“A top priority of my chairmanship will be to work with my fellow commissioners and Congress to provide a firm regulatory foundation for digital assets through a rational, coherent, and principled approach,” he noted in a prepared testimony.
While the report is that the Senate is delaying a vote on his nomination, the anticipation around the crypto ecosystem is that his confirmation is just a matter of ‘when, not if’.
Until then, interim chair Mark Uyeda continues to point the SEC in what industry players say is the right direction
@ Newshounds News™
Source: Crypto News
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JPMORGAN SEES YIELD-BEARING STABLECOINS GROWING FROM 6% TO 50% OF MARKET SHARE
▪️JPMorgan analysts forecast that yield-bearing stablecoins could rise from the current 6% to as much as 50% of the stablecoin market cap in the future.
▪️Yield-bearing stablecoins are attracting investors similarly to traditional money market funds, particularly in today’s high-interest-rate environment, the analysts said.
Yield-bearing stablecoins, including tokenized Treasurys, which offer interest returns similar to traditional financial products, could experience massive growth ahead, according to JPMorgan analysts.
Yield-bearing stablecoins currently make up just 6% of the total stablecoin market cap but could expand significantly, potentially capturing up to 50% of the market unless regulatory changes intervene, JPMorgan analysts led by managing director Nikolaos Panigirtzoglou wrote in a report released Wednesday.
The top five yield-bearing stablecoins — Ethena's USDe, Sky Dollar's USDS, BlackRock's BUIDL, Usual Protocol's USD0 and Ondo Finance's USDY— have seen rapid growth since the U.S. election in November, rising from around $4 billion to over $13 billion in combined market cap, Panigirtzoglou told The Block.
According to analysts, this growth is expected to continue. They added that the U.S. Securities and Exchange Commission's recent approval of Figure Markets' application for a yield-bearing stablecoin, YLDS, which is registered as a security, provides further momentum to this segment.
Traditional stablecoins, such as Tether's USDT and Circle's USDC, do not share reserve yields with their users because doing so would classify these assets as securities, according to the analysts.
Such a classification would also impose additional compliance requirements, hindering their current seamless use as collateral within the crypto ecosystem, they said.
Why yield-bearing stablecoins are on the rise
The JPMorgan analysts identified several factors driving the rapid growth of yield-bearing stablecoins.
First, investors prefer these assets because they offer interest without requiring holders to engage in risky trading or lending activities or give up custody of their assets.
Second, major crypto trading platforms such as Deribit and FalconX now accept tokenized Treasurys as collateral, enabling traders to earn yield on posted collateral.
Additionally, crypto investors are increasingly turning to tokenized Treasurys in decentralized finance (DeFi) to obtain higher yields, as typical DeFi yields have significantly decreased from their peak levels of 2022. Projects like Frax Finance are also adopting tokenized Treasurys as underlying assets, further fueling this growth.
Despite this positive outlook, the JPMorgan analysts noted barriers. Yield-bearing stablecoins are classified as securities, subjecting them to regulatory restrictions that limit their adoption, especially among retail investors. Moreover, traditional non-yield-bearing stablecoins continue to hold a notable liquidity advantage.
With a combined market cap of around $220 billion across multiple blockchains and centralized exchanges, traditional stablecoins offer efficient, fast and low-cost transactions, even at large volumes. In contrast, yield-bearing stablecoins are newer, smaller and comparatively less liquid.
However, "This liquidity disadvantage could potentially be lessened over time as yield-bearing stablecoins gain further traction in the future in crypto derivative trading as source of collateral, in DAO treasuries, liquidity pools, and idle cash with crypto venture funds," according to the analysts.
As a result, over time, yield-bearing stablecoins could attract much of the idle cash currently sitting in traditional stablecoins, the analysts said. While the exact amount of this idle cash is difficult to estimate, it's unlikely to represent the majority of the stablecoin market, according to the analysts.
@ Newshounds News™
Source: The Block
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