News

Stablecoins on shaky ground? US council calls on Congress to enact crypto oversight

Published

2 weeks ago

December 7, 2024

The 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.

3/17) There has never been an audit of USDT, despite promising to do so since 2015
This means we have to take their word for the vast majority of reserves, as they cannot be independently verified
The first firm to attempt an audit even got fired for being too thorough in 2018! pic.twitter.com/OYfj21HsKJ
— Justin Bons (@Justin_Bons) September 14, 2024

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.

Source link

Bitcoin

Metaplanet makes largest Bitcoin bet, acquires nearly 620 BTC

Published

12 hours ago

December 23, 2024

admin

Tokyo-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.

Source link

Altcoin Season

End of Altcoin Season? Glassnode Co-Founders Warn Alts in Danger of Lagging Behind After Last Week’s Correction

Published

15 hours ago

December 23, 2024

admin

The creators of the crypto analytics firm Glassnode are warning that altcoins could lose all bullish momentum following last week’s market correction.

Jan Happel and Yann Allemann, who go by the handle Negentropic on the social media platform X, tell their 63,400 followers that “altcoin season,” which they say began in late November, could come to an abrupt end after alts witnessed deep pullbacks over the last seven days.

According to the Glassnode co-founders, traders and investors will likely have a risk-off approach on altcoins unless Bitcoin recovers a key psychological price point.

“Is This the End of Altcoin Season?

Bitcoin dominance is surging after dipping below $100,000, while altcoins are losing critical supports. Dominance has risen and resumed its upward trend, signaling a stronger BTC environment.

If BTC stabilizes above $100,00, we might see a pump in altcoins now in accumulation zones. Until then, Bitcoin appears poised to lead, leaving altcoins lagging behind.”

The Bitcoin Dominance (BTC.D) chart tracks how much of the total crypto market cap belongs to BTC. In the current state of the market, a surging BTC.D suggests that altcoins are losing value faster than Bitcoin.

At time of writing, BTC.D is hovering at 59%.

Looking at Bitcoin itself, the Glassnode executives say long-term Bitcoin holders are massively unloading their holdings as other investor cohorts pick up the slack.

“The Board Keeps Shifting.

As BTC continues flowing out of exchanges during this dip, long-term holders are exiting forcefully, while short-term holders step in without hesitation.

Whales quietly accumulate, miners remain neutral, and selling pressure has merely reshuffled the board.

New hands are absorbing the sales.”

At time of writing, Bitcoin is worth $97,246.

Don’t Miss a Beat – Subscribe to get email alerts delivered directly to your inbox

Check Price Action

Follow us on X, Facebook and Telegram

Surf The Daily Hodl Mix

&nbsp

Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

Generated Image: DALLE3

Source link

News

The introduction of Hydra could see Cardano surpass Ethereum with 100,000 TPS

Published

21 hours ago

December 22, 2024

admin

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

Cardano’s Hydra boosts ADA past $1, positioning it as a scalable dApp hub and a potential challenger to Ethereum’s dominance.

Cardano‘s Hydra is the latest scaling solution in Cardano’s ecosystem, and it has seen ADA’s price surge past $1. While ADA’s current rate represents a 65% dip from its peak, ADA holders are 90% bullish.

Compared to Ethereum’s price, ADA is much cheaper, and the developments taking place in its ecosystem could potentially threaten Ethereum’s dominance. Cardano’s Hydra, for instance, can improve Cardano’s scalability, making it a go-to ecosystem for dApp development.

Given Ethereum’s struggles to scale its network, including its move from a PoW to a PoS protocol, Cardano’s Hydra can soon help developers build speedy dApps with high rates of mass adoption.

Cardano’s Hydra on track to elevate ADA to new heights

ADA’s current price at $0.91 is on a bullish trend that has seen ADA surge over 50% in the last 60 days. After ADA’s price languished around the $0.35 zone for months, whale activity is now rising in Cardano’s ecosystem, which has seen market watchers anticipate an additional uptick to $2 in the short term.

According to reports, an influx of over 680 transactions exceeding $1 million was registered on Cardano’s ADA as confidence in ADA’s bull run grew. Cardano’s founder has also confirmed that ADA is primed for higher highs in 2025, especially with the launch of Cardano’s Hydra.

Cardano’s Hydra is set to give developers a unique scaling tool that makes transactions on Cardano cheaper, faster, and more secure. With Ethereum as Cardano’s biggest competition, Cardano Hydra might trigger a migration of developers to Cardano in the near future.

Ethereum’s price drops to below $3,400 amid scalability concerns

Ethereum‘s price has remained sluggish in responding to the bull market even though its recent uptick past $4,000. After surging to a striking distance of $5,000 in 2021, Ethereum’s price plummeted to lows of $1,000 but has recovered amid critical resistance at the $4,000 mark.

Now, Ethereum’s price has been rejected above the $4,000 mark three times, and market watchers are less optimistic that the leading DeFi ecosystem could surge further to $5,000 – $6,00 during this bull run. Some of the obstacles that have hindered a rally on Ethereum’s price include Ethereum’s bloated network, which has registered skyrocketing network fees at peak congestion.

With the advent of scalability solutions such as Cardano’s ADA, Ethereum’s price could experience further sluggish growth. What’s more, mass adoption by institutions will require a lot more liquidity to move Ethereum’s price.

Discover the future of cross-border payments with Remittix

Ethereum’s potential is fast declining this cycle and investors are looking at alternatives. However, competition from the likes of Cardano’s Hydra is concerning for ETH Holders. However, many ETH holders are switching to a new project leading a new ‘PayFi’ movement. For crypto enthusiasts who want to make swift crypto-to-fiat money payments across the globe, Remittix (RTX) is the latest solution that promises to empower businesses and crypto holders worldwide.

Remittix is fast and reliable with a simple design that allows anyone to send crypto to a recipient’s bank account without the recipient ever knowing that the payment started with crypto. The Remittix Pay API also allows businesses to accept crypto payments with a simple merchant account. Remittix is built on Ethereum, and its RTX token is now in its presale. Analysts are predicting this to become a 100x star in 2025.

To learn more about Remittix, visit the Remittix presale and join the Remittix community.

Disclosure: This content is provided by a third party. crypto.news does not endorse any product mentioned on this page. Users must do their own research before taking any actions related to the company.

Source link