Crypto Firms Introduce Synthetic Dollars Amid Rising Demand; Ripple Faces SEC Challenges
Summary:
The rise of US dollar-linked digital assets is prompting more cryptocurrency firms to develop synthetic dollars. Following Tether's recent launch of a gold-backed synthetic dollar, similar products have gained popularity. Hashdex has submitted an application to SEC for a combined Bitcoin and Ether ETF, while Coinbase International now supports a pre-launch market. The SEC, however, is seeking nearly $2 Billion from Ripple, criticizing its request for a significantly reduced penalty. Uphold will delist six stablecoins by July 1 due to European Union's new MiCA regulation. Over $100 billion has been raised for cryptocurrency startups since May 2014, despite market volatility.
The interest for US dollar-linked digital assets is growing, prompting more cryptocurrency firms to capitalize on this trend. Tether, the company behind the popular Tether (USDT) stablecoin, recently revealed a synthetic dollar backed by gold and pegged to the U.S. dollar. The announcement follows closely on the heels of Assymetry launching its synthetic dollar, afUSD, featuring an elastic supply in accordance with market conditions. The rise of new dollar-mimicking tokens has been significant since the launch of Ethena's synthetic dollar, USDe, in February 2024. The protocol has amassed over $3.4 billion in locked assets over a four-month period, according to DefiLlama. The advent of Ethena's synthetic dollar has disrupted the stablecoin market while highlighting the global market demand for dollar-centric cryptocurrencies. Tokenized funds providing exposure to U.S. Treasurys is also growing, indicative of traditional finance transitioning to blockchain. BlackRock's USD Institutional Digital Liquidity Fund (BUIDL) and Franklin Templeton’s OnChain U.S. Government Money Fund (FOBXX) held $462.7 million and $357.6 million in assets respectively as of June 19. Overall, roughly $1.5 billion worth of U.S. Treasurys has been tokenized, majorly in recent months.
This week's crypto news also reported on Hashdex's SEC filing for a combined Bitcoin (BTC) and Ether (ETH) exchange-traded fund (ETF), Coinbase's pre-launch market, Ripple's regulatory hurdles in the U.S., and more stablecoins exiting Europe. Hashdex has submitted to the SEC an application for an ETF tracking the daily market movements of BTC and ETH in alignment with the Nasdaq Crypto US Settlement Price Index. The composition will be roughly 70.54% Bitcoin and 29.46% Ether. The custodians for the BTC and ETH assets will be Coinbase and BitGo.
Coinbase International now supports a pre-launch market, granting users the ability to trade the futures of yet-to-be-listed tokens and coins. This new feature enables early trading initiatives ahead of the official launch, permitting traders to get familiar with upcoming tokens early on. This functionality is available to institutional investors through Coinbase International and retail traders via Coinbase Advanced.
The SEC has criticized Ripple's request for a reduced penalty in their ongoing lawsuit. The fintech company asked for a substantially reduced penalty of no more than $10 million, referencing SEC's previous settlement with Terraform Labs. The SEC implies a penalty of nearly $102.6 million for Ripple, as based on the company's gross profits and drawing parallels to the Terraform case. The SEC is looking for nearly $2 billion from Ripple, inclusive of $198.2 million in prejudgment interest, $876.3 million in civil penalties, and an additional $876.3 million in disgorgement.
Meanwhile, Uphold, a digital asset platform, announced plans to delist six stablecoins by July 1 due to the upcoming implementation of the Markets in Crypto-Assets (MiCA) regulation by the European Union. The stablecoins slated for delisting are USDT, Dai (DAI), Frax (FRAX), Gemini dollar (GUSD), Pax dollar (USDP), and TrueUSD (TUSD). Users with holdings in the aforementioned stablecoins have until June 28 to convert them; post the deadline, they will be automatically changed to USD Coin (USDC).
As an ending note, more than $100 billion has been garnered for cryptocurrency startups since May 2014, indicating a rising market despite the ongoing volatility. Crypto Biz presents weekly reports on blockchain business and cryptocurrency trends each Thursday.
Published At
6/22/2024 12:00:00 AM
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