News
Stablecoins on shaky ground? US council calls on Congress to enact crypto oversight
Published
2 weeks agoon
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adminThe Financial Services Oversight Council (FSOC) is urging Congress to pass legislation that establishes a comprehensive federal framework for regulating stablecoin issuers.
A government organization — established by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 — published a report on Friday, Dec. 6, detailing what it perceives as a growing threat to the U.S. financial system.
Stablecoins, the FSOC says, “continue to represent a potential risk to financial stability because they are acutely vulnerable to runs absent appropriate risk management standards.”
The sector also remains largely concentrated, with a single firm accounting for “around 70 percent of the sector’s total market value,” council stated, referring to Tether (USDT).
Why Tether is problematic
As of 2024, Tether remains the dominant player in the stablecoin space.
While the FSOC report did not mention any company names, it cautioned that the lack of risk management standards with firms involved with stablecoins makes the sector “vulnerable to runs.” And Tether has faced scrutiny for not providing audits to verify that its coin is backed 1:1 by U.S. dollars or other assets.
Critics argue that if Tether does not hold sufficient reserves, it could collapse, causing a major disruption in the crypto market. ng up over 70% of the $204 billion market.
In a Sept. 14 social media post, Cyber Capital founder Justin Bons criticized Tether for its “lack of third-party audits,” calling the stablecoin an “existential threat to crypto.” See below.
Previously, the firm settled charges alleged by the U.S. Commodity Futures Trading Commission in 2021 for making “untrue or misleading statements” about the reserves backing its stablecoin.
Stablecoins have also faced heightened scrutiny since the collapse of TerraUSD (UST). Once a prominent stablecoin, UST lost its dollar peg in May 2022, triggering a catastrophic death spiral that wiped out over $40 billion in value from the crypto market.
Despite these concerns, stablecoins remain widely used, especially for trading and liquidity.
Specifically, the FSOC warned that if the market dominance expands, its potential failure could “disrupt the crypto-asset market” and trigger “knock-on effects” for the broader financial system.
A few stablecoin issuers are under state-level supervision, but many “operate outside of, or in noncompliance with, a comprehensive federal prudential framework.”
Further, it added that these firms often provide “limited verifiable information” about their reserves and holdings, making it difficult to ensure “effective market discipline.”
Calls for legislative action
The FSOC recommended passing stablecoin regulations to alleviate risks. It urged Congress to develop “a comprehensive federal prudential framework for stablecoin issuers” and provide federal financial regulators with explicit rulemaking authority over the crypto-asset spot market.
“If comprehensive federal legislation is not enacted, Council members remain prepared to consider steps available to them to address risks related to stablecoins,” it added.
This is not the first time the FSOC has pushed for such measures; similar recommendations were made in its 2023 annual report.
Congress is currently reviewing the Clarity for Payment Stablecoins Act, a bill aimed at establishing clear regulations for stablecoin issuers. While the legislation has yet to pass the House, crypto proponents believe it could progress under the incoming Trump administration.
Meanwhile, concerns over stablecoins extend beyond the U.S. On Dec. 4, the Australian Securities and Investments Commission published a consultation paper outlining plans to enhance oversight of the stablecoin sector.
Similarly, Banco Central do Brazil (BCB) has raised concerns about the risks stablecoins pose and has proposed banning withdrawals to self-custody wallets as part of efforts to tighten regulatory oversight.
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Stablecoin Issuer Tether Invests $775,000,000 Into YouTube Rival Rumble
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Stablecoin Issuer Tether Invests $775,000,000 Into YouTube Rival Rumble
Published
6 hours agoon
December 23, 2024By
adminTether, the issuer of the largest stablecoin by market cap, is announcing a $775 million investment into YouTube alternative Rumble.
Rumble says in a press release that it will be using $250 million of the proceeds to support “growth initiatives” and the remaining capital to fund a self-tender offer for up to 70 million of its Class A common stock.
Tether has agreed to acquire 103,333,333 Rumble Class A shares at $7.50. Meanwhile, Rumble chairman and CEO Chris Pavlovski will retain his controlling stake in the company.
Says Pavlovski,
“I truly believe Tether is the perfect partner that can put a rocket pack on the back of Rumble as we prepare for our next phase of growth.”
On top of Rumble’s prioritization of free speech and decentralization, Tether CEO Paolo Ardoino says that the company also intends to look into a crypto payment solution for the YouTube rival.
“Tether’s investment in Rumble reflects our shared values of decentralization, independence, transparency, and the fundamental right to free expression. In today’s world, legacy media has increasingly eroded trust, creating an opportunity for platforms like Rumble to offer a credible, uncensored alternative. This collaboration aligns with our long-standing commitment to empowering technologies that promote freedom and challenge centralized systems, as demonstrated through our recent collaborations and initiatives.
Rumble’s dedication to fostering open communication and innovation makes them an ideal ally as we continue building the infrastructure for a more decentralized, inclusive future. Lastly, beyond our initial shareholder stake, Tether intends to drive towards a meaningful advertising, cloud, and crypto payment solutions relationship with Rumble.”
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blockchain games
Solana L2 Sonic includes TikTok users in airdrop
Published
7 hours agoon
December 23, 2024By
adminSolana GameFi network Sonic will airdrop free tokens to TikTok users for joining its crypto game.
Layer-2 gaming-centric Solana-native network Sonic plans to send SONIC tokens to TikTok users onboarded via its social media blockchain game. The Solana (SOL) Virtual Machine protocol designed its SonicX game directly on TikTok, similar to The Open Network developers behind Telegram mini-games.
The idea revolves around tapping existing web2 audiences for web3 projects, accessing millions of users already on platforms like Telegram and TikTok.
Over 1 billion monthly active users log on to TikTok, with numbers expected to reach more than 2 billion by 2029.
SonicX, the first TikTok App Layer from Sonic SVM, will distribute $SONIC tokens to all eligible TikTok users. Over 2 million users have already joined via a seamless onboarding flow—no external wallet setup or gas fees required.
Sonic on X
Social media-native games became widely popular on TON and Telegram. Projects like Notcoin (NOT) and Hamster Kombat (HMSTR) amassed millions of users in a few short months.
However, the trend appeared shortlived as protocols experienced a sharp drop in activity post-token airdrop. Hamster Kombat lost over 80% of its users right after its cryptocurrency distribution. Crypto giants like Binance and Gate have also released reports detailing a drop in Telegram mini app vitality.
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Bitcoin
Metaplanet makes largest Bitcoin bet, acquires nearly 620 BTC
Published
19 hours agoon
December 23, 2024By
adminTokyo-listed Metaplanet has purchased another 9.5 billion yen ($60.6 million) worth of Bitcoin, pushing its holdings to 1,761.98 BTC.
Metaplanet, a publicly traded Japanese company, has acquired 619.7 Bitcoin as part of its crypto treasury strategy, paying an average of 15,330,073 yen per (BTC), with a total investment of 9.5 billion yen.
According to the company’s latest financial disclosure, Metaplanet’s total Bitcoin holdings now stand at 1,761.98 BTC, with an average purchase price of 11,846,002 yen (~$75,628) per Bitcoin. The company has spent 20.872 billion yen in total on Bitcoin acquisitions, the document reads.
The latest purchase is the largest so far for the Tokyo-headquartered company and comes just days after Metaplanet issued its 5th Series of Ordinary Bonds via private placement with EVO FUND, raising 5 billion yen (approximately $32 million).
The proceeds from this issuance, as disclosed earlier, were allocated specifically for purchasing Bitcoin. These bonds, set to mature in June 2025, carry no interest and allow for early redemption under specific conditions.
Metaplanet buys dip
The company also shared updates on its BTC Yield, a metric used to measure the growth of Bitcoin holdings relative to fully diluted shares. From Oct. 1 to Dec. 23, Metaplanet’s BTC Yield surged to 309.82%, up from 41.7% in the previous quarter.
Bitcoin itself has seen strong performance this year, climbing 120% and outperforming assets like the Nasdaq 100 and S&P 500 indices. However, it has recently pulled back from its all-time high of $108,427, trading at $97,000 after the Federal Reserve indicated only two interest rate cuts in 2025.
Despite the retreat, on-chain metrics indicate that Bitcoin is still undervalued based on its Market Value to Realized Value (MVRV-Z) score, which stands at 2.84 — below the threshold of 3.7 that historically signals an asset is overvalued.
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