Latest news with #Stablecoins
Reuters
4 hours ago
- Business
- Reuters
Explainer: What is tokenization and is it crypto's next big thing?
NEW YORK, July 23 (Reuters) - Tokenization has long been a buzzword for crypto enthusiasts, who have been arguing for years that blockchain-based assets will change the underlying infrastructure of financial markets. The technology is seen as rapidly increasing in coming years, especially in the U.S., helped by the passage of three new bills. President Donald Trump's administration has eased regulation of the broader crypto industry, paving the way for a boom in the valuation of companies in the sector and the rapid growth of crypto-related securities. However, the growth of the market for tokenized assets has been far slower than expected in recent years, with many projects still in their infancy or not yet live. The term "tokenization" is used in a variety of ways. But it generally refers to the process of turning financial assets - such as bank deposits, stocks, bonds, funds and even real estate - into crypto assets. This means creating a record on digital ledger blockchain that represents the original asset. These blockchain-based assets, or "tokens", can be held in crypto wallets and traded on blockchain, just like cryptocurrencies. Stablecoins can be seen as an example of tokenization. They are a type of cryptocurrency designed to maintain a constant value by being pegged to a real-world currency, typically the U.S. dollar. The issuer holds one U.S. dollar in reserve for every dollar-pegged crypto token it creates. Stablecoins are blockchain-based tokens acting as a proxy for an asset that already exists outside the blockchain. They allow people to move money across borders without interacting with the banking system. While critics say that this makes them useful for criminals who want to avoid banks' anti-money laundering checks, stablecoin issuers say that they are a lifeline for people in countries without a developed payments system. Yes and no. Stablecoins have grown in recent years, with the market estimated to be worth about $256 billion, according to crypto data provider CoinMarketCap, and expected to touch $2 trillion by 2028, according to Standard Chartered. But banks have talked for years about creating tokenized versions of other types of assets, which they say will make trading more efficient, faster and cheaper, and those "tokens" have struggled to gain traction. While there have been individual issuances, there is not a liquid secondary market for these kinds of assets. One impediment to trading traditional assets via blockchain is that banks are working on their own private networks, making it difficult to trade across platforms. Some proponents of the crypto industry have said tokenization can improve liquidity in the financial system. Illiquid assets like real estate could be traded more easily if they are broken up into small digital tokens. It is also expected to improve access to asset classes that are typically out of reach of smaller investors by creating a cheaper entry point. Some major global banks, including Bank of America and Citi have said they could explore launching tokenized assets, including stablecoins. Asset manager BlackRock is also doubling down on the tokenization boom, and has highlighted its ambition of becoming the largest cryptocurrency manager in the world by 2030. Coinbase, the largest U.S. crypto exchange, is seeking permission from the SEC to offer "tokenized equities" to its customers. Since stablecoins themselves are tokens and seen as one of the biggest drivers of the growth of tokenization, the new stablecoin law will end up boosting the proliferation of tokenization, experts say. The new market structure bill, known as the Clarity Act, is expected to establish a clear framework that could enable stablecoins and other crypto tokens to become more widely used. Some analysts say the hype around tokenization might be premature and caution that the rapidly growing crypto ecosystem could experience near-term turbulence due to the potential risks of a big decline in prices. European Central Bank President Christine Lagarde has warned stablecoins pose risks for monetary policy and financial stability. Some critics of the industry warn the frenzy around the new technology could introduce new systemic risks, especially in the absence of stringent regulation. They also say there is no reason why blockchain should be any more efficient than the electronic ledgers and trading systems already used in financial markets. Buyers of third-party tokens, which are issued by unaffiliated third parties - such as crypto exchange Kraken - that have custody of securities, could be exposed to counterparty risks, and regulators are sounding notes of caution. Earlier in July, Hester Peirce, a commissioner at the U.S. Securities and Exchange Commission who has frequently spoken positively about cryptocurrency, said tokenized securities would not be able to circumvent existing securities laws. More than half of the world's U.S. dollar stablecoins are issued by a single company, Tether, which says it manages $160 billion in reserves, but has not undergone a financial audit.
Time of India
a day ago
- Business
- Time of India
Elon Musk's SpaceX moves BTC worth $153 million as Bitcoin hits all-time high, what makes it 'important'
Elon Musk 's space exploration company SpaceX reportedly recently made a rare move as Bitcoin touched all-time high. According to a report in Cryptobriefing, a wallet tied to Elon Musk's SpaceX moved more than 1,300 Bitcoin (BTC) worth approximately $153 million to a new address. According to Arkham Intelligence data, the company moved Bitcoin in June end. The report claims it to be the first on-chain activity from the wallet in three years. The SpaceX-labeled wallet is said to still hold over 6,900 BTC, valued at around $810 million at current market prices. The reason for SpaceX's recent move is unclear, but it may involve reorganizing its storage infrastructure rather than preparing to sell off assets. As of mid-2025, Tesla and SpaceX collectively held about $2 billion in Bitcoin, according to Arkham. Tesla's Q1 earnings report indicates it currently holds approximately 11,509 BTC. The companies purchased their Bitcoin at an average price of around $32,000 per unit and have maintained these long-term positions, with unrealized profits nearing $1.5 billion. Bitcoin recently hit a new all-time high above $122,800, leading a Satoshi-era whale to sell 80,000 BTC. At the time of reporting, Bitcoin was trading above $117,000, per CoinGecko data. Donald Trump signs Stablecoin law, GENIUS Act by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Top 15 Most Beautiful Women in the World Undo President Donald Trump recently signed the GENIUS Act. The bill is said to be a huge win for the crypto industry that has been lobbying for a regulatory framework to gain greater legitimacy. The GENIUS Act bill was passed in the House of Representatives by a vote of 308 to 122 on Thursday, after Senate approval. The bill bans yields or interest payments on regulated Stablecoins, which Deutsche Bank said is leading to a rise in Ether prices. Analysts believe that investors are moving into the world's second biggest cryptocurrency Ether as an alternative for yield generation in decentralized finance. "It has been a long-awaited moment for Ethereum, and although it's too early to be fully convinced of a longer term trend shift, the confluence of factors are playing into its favor," said Luke Nolan, senior research associate at CoinShares. Stablecoins are designed to maintain a constant value, usually a 1:1 U.S. dollar peg, and their use has exploded, mainly by crypto traders moving funds between tokens. Some large Wall Street banks such as Bank of America too have reportedly been working on launching their own Stablecoins. AI Masterclass for Students. Upskill Young Ones Today!– Join Now
ABC News
2 days ago
- Business
- ABC News
What's behind Donald Trump's latest crypto adventure?
Amid all the noise about Epstein and ankles late last week, Donald Trump quietly started a revolution within the global monetary and payments system. The announcement didn't go entirely unnoticed, but with the anger and fury bubbling through American society right now, it didn't quite get the exposure it deserved. It's called the "Guiding and Establishing National Innovation for US Stablecoins Act", an innocuous-sounding bill that condenses down into a neat little acronym. "The GENIUS Act, they named it after me," Trump announced in a rare moment of levity and without the faintest hint of irony. Widely touted as a means to provide credibility for the crypto industry, and the US president's family business exposures, the move will have far-reaching impacts on the global financial system and the US economy. Most of the attention in the lead up to the bill's passing has focused on the president's personal exposure to cryptocurrencies. And for good reason. Five years ago, towards the end of his first term in office, Trump denounced Bitcoin and cryptocurrencies as "a scam". But in the lead up to last year's election, he announced a lighter touch to crypto regulation. New regulators with a more benign attitude to the industry would replace those who brought the likes of Sam Bankman-Fried — the FTX tycoon now serving a 25-year jail sentence — to justice after one of the biggest financial collapses in history. That pledge saw huge amounts of donations flow in from crypto industry devotees. And, in the aftermath of the election, the president and his wife launched their own meme coins — raising an estimated $US2.7 billion — along with the launch of World Liberty Financial, a cryptocurrency firm run by his sons and other business associates. While the potential conflicts of interest are disturbing, the bill could reshape the way global finance and trade flows operate. Stablecoins haven't always lived up to their name. Occasionally, they've been anything but. When the cryptocurrency industry was collapsing in on itself three years ago, a stablecoin called UST — which had little real asset backing — suddenly was de-pegged from the US dollar, resulting in the collapse of two big cryptocurrencies, Terra and Luna. Investors lost tens of billions of US dollars. But the concept has survived and stablecoins, unlike many other crypto applications, have a useful purpose. They can transfer money in an instant and at minimal cost with none of those annoying transfer fees. Stablecoins are named as such because they are pegged to a fiat currency, usually the US dollar. Unlike other cryptocurrencies like Bitcoin, the price doesn't change or, at least, shouldn't. To be truly stable, however, they must be backed by assets that can be readily exchanged into US dollars, assets like US Treasury bills and US government bonds, essentially US government debt. For years, they were mostly used in countries with unstable currencies like Turkey. But that's now changing. During the past year, stablecoin transactions have exceeded $US33 trillion, far exceeding that of PayPal and even Visa, a trend that is in its infancy. That sudden lift in transactions and the rise of stablecoins has begun to shift the market for US government debt. Tether, the biggest stablecoin, last year emerged as the seventh biggest buyer of US Treasuries and between them, stablecoins now collectively hold $US128 billion in US Treasuries, which is more than sovereign holders like Germany, Saudi Arabia, and South Korea. This shift is occurring at the same time as the US dollar is losing its lustre and questions are being raised about America's role as the global reserve currency. While there is no obvious interloper, another currency to take its place as the global reserve, confidence in America is faltering, as this graph shows, hit by rising levels of US debt and increasingly erratic politics. China, once the world's biggest owner of US Treasuries and bonds, has been selling down US government debt, and instead building its store of gold. That has kept US Treasury officials awake at night. Less demand for US government debt flows directly through to higher interest rates. That's because investors would demand higher yields, or interest rates, to purchase the bonds for the greater risk they hold. With the interest bill on its $US37 trillion debt already topping $US1 trillion a year, that's something the US can ill-afford. US Treasury Secretary Scott Bessent is praying that he's found the answer. Just as foreign governments and their central banks have been backing out of US dollars and US government debt, stablecoins may just fill the breach. Continued demand for US government debt is vital for America's future, something Bessent's boss, Donald Trump, has failed to grasp. The US president believes the rest of the world is "ripping us off" because the US runs a trade deficit. The real problem is that Americans spend more than they save. And the only way to finance that, is to ensure there is strong demand for US government debt. Bessent is hoping stablecoin demand for American government debt will pull borrowing costs lower. He has some serious heft backing him on that. Investment banks Citigroup and Standard Chartered both believe that stablecoin use will grow exponentially within the next few years. Even major US retail chains and banks have begun exploring stablecoins to drive down the excessive fees charged by credit card companies. That sounds like an easy fix for the Treasury Secretary. But as The Economist newspaper points out, if the money is merely being switched from one set of domestic buyers to another, the pain relief will be short-lived. It also points out that, should the world become hooked on stablecoin use, foreign demand to back US dollar stablecoins will also lift demand for US dollars. That, in turn, will push the US dollar higher, thereby giving Americans more buying power for their imported goods. That would undermine any efforts from Trump to tariff his way to a trade surplus. For all the optimism that blockchain technology finally may deliver some useful applications, questions remain. While Circle — another stablecoin and smaller rival to Tether — is independently audited, its bigger competitor is not. It doesn't disclose where its reserves are held or exactly what they comprise and particularly whether it holds volatile assets such as Bitcoin that may undermine its ability to balance its liabilities. To date, it has weathered some almighty crypto storms. But should it falter, it would seriously damage the credibility of the emerging industry and derail any solution, however short-term, that Scott Bessent may hold in store for US government debt demand. The shift in sentiment towards cryptocurrencies, particularly since Donald Trump surged to power earlier this year, has been nothing short of spectacular. Bitcoin is trading at records and most keen watchers expect it to keep rising. It is estimated the president reaped $US320 million from sales of one of his meme coins, while a foreign government wealth fund invested $US2 billion in another. A third has sold at least $550 million in tokens. But not everyone is a winner in the crypto sphere. Those who invested in $Trump, the president's meme coin, and his wife's coin $Melania, have suffered massive losses ever since the Inauguration Day spike.
Crypto Insight
4 days ago
- Business
- Crypto Insight
From Bank to Broker to Crypto: Infrastructure Playbooks for Regulated Companies Entering Digital Assets
The EU's MiCA framework is creating a predictable environment for crypto services. Stablecoins are being used for payments, settlements, and cross-border operations. Tokenized assets are being tested by banks and asset managers. As a result, banks, brokers, and fintech platforms are planning to launch crypto services. This can include custody, trading, or stablecoin rails. But these companies work under strict rules. They need infrastructure that meets high standards for uptime, access control, compliance, and reporting. A simple API or SDK is not enough. What they need is a full infrastructure strategy. This article outlines how regulated companies can add crypto services without increasing their risk. Why regulated companies are moving into crypto There are several reasons why traditional financial companies are building crypto services now: MiCA gives legal clarity in the EU Stablecoins like USDC are becoming tools for fast payments Clients are asking for access to crypto products Tokenized assets are gaining interest from institutions The goals are different from startups. Regulated firms need long-term infrastructure that can handle audits, reporting, and operations at scale. Common entry points for crypto integration Regulated companies usually begin their crypto journey by focusing on one or two specific services, depending on their market and compliance readiness. One common starting point is custody. Firms that offer custody focus on secure wallet infrastructure, enabling users to deposit and withdraw assets safely. This creates a foundation for other services, such as staking or tokenized investments. Some companies prioritize trading access. These platforms allow users to buy and sell cryptocurrencies but avoid handling custody by keeping the assets off-chain or locked within internal systems. This limits their exposure to custody-related risks while still meeting customer demand. Another growing use case is stablecoin integration. Payment firms and cross-border platforms are using assets like USDC or EURC to provide faster and more cost-effective alternatives to traditional rails like SWIFT or SEPA. Others are entering crypto through tokenized asset offerings, where banks and brokers begin experimenting with digital versions of bonds or private equity instruments. Each approach requires a tailored infrastructure stack and a different level of compliance maturity. But all of them depend on having reliable custody, transaction logic, and audit controls from the beginning. Core infrastructure requirements When a regulated company adds crypto to its platform, the infrastructure must meet the same operational and legal standards as any other financial system. Custody systems should be built on secure methods like MPC or HSM, and must include fine-grained control over who can initiate and approve transactions. Access needs to be managed by role, with multi-level approvals and detailed permissions. Logging and audit trails must be available in real time. Every transaction, user action, or system change needs to be tracked and stored securely, with full export capabilities for regulators or internal teams. Uptime is also critical. Crypto services should match the reliability of traditional trading or banking infrastructure, which means deploying redundancy, health checks, and fallback systems to minimize service interruptions. Beyond the backend, companies also need tools for real-time monitoring. Dashboards that track delays, performance, or anomalies help operations teams respond quickly. And when working with infrastructure vendors, transparency is essential. Regulated companies need visibility into how the platform works, what its performance history looks like, and how it supports ongoing compliance. Compliance is a technical requirement Many crypto compliance rules are enforced through software. Regulated companies must understand the infrastructure requirements behind these rules. Travel Rule When users send crypto to external wallets, the system needs to detect when to apply the Travel Rule. This means adding metadata, identifying the receiving service, and preventing non-compliant transfers. MiCA enforcement MiCA asks for clear control over custody, user asset management, and risk policies. These controls must be built into the infrastructure. Manual policies are not enough. Regional requirements Some regions require local data storage or restrict where wallets can be accessed from. This must be supported in system design and deployment. At Scalable Solutions, we build compliance into the platform. Features like transaction screening, withdrawal checks, and audit logs are not optional add-ons. They are part of the standard architecture. What to build in-house and what to use from vendors Companies that want to offer crypto services need to decide which parts of the infrastructure they will build themselves and which parts they will source from vendors. In most cases, it makes sense to keep control over the user interface, onboarding experience, internal dashboards, and risk or compliance rules that are specific to their business. At the same time, core infrastructure such as key custody, blockchain node access, transaction screening, and monitoring tools can be more efficient and secure when provided by specialized vendors. The key is to work with providers who offer transparency, regulatory readiness, and clear service-level commitments. Systems that don't provide access to logs, lack proper client separation, or operate as black boxes can create serious operational and compliance risks. When choosing a vendor, companies should avoid platforms that: Don't share logs or audit data Use shared infrastructure without strong isolation Have no proof of regulatory readiness Can't meet SLA and uptime requirements Lessons from the field What didn't work A European broker launched a crypto service using a basic white-label backend. The system gave internal staff access to wallets without proper role separation. When regulators asked for logs, the company couldn't provide them. The service was shut down after a few months. What worked A payment platform added USDC payouts using vendor-based custody and compliance modules. They kept control over AML policy logic and used modular infrastructure. The service launched quickly and passed a regulatory audit within six months. Conclusion For regulated companies, crypto is no longer out of reach. But it must be added with the same care as any other financial service. The infrastructure must support controlled key management, transaction screening, role-based access, logging and audit tools and regional deployment strategies – all in one, simply manageable source. Source:
Yahoo
5 days ago
- Business
- Yahoo
Crypto for Advisors: Crypto Week: What Does it Mean for Advisors?
Happy Crypto Week! In today's Crypto for Advisors newsletter, Beth Haddock of Warburton Advisers provides a mid-year check-in on the advancements in the crypto industry and what this means for advisors. Then, Chris Jenkins of Pocket Networks Foundation answers questions about regulatory changes for investors in Ask an Expert. – Unknown block type "divider", specify a component for it in the ` option Crypto Week: What Does it Mean for Advisors? Now well into the second half of 2025, crypto's trajectory is clear: it's evolving from excitement into core financial infrastructure. Stablecoins are gaining legitimacy, regulators are actively engaging with the industry, and persistent cybersecurity threats persist. These shifts require advisors to reassess strategies, educate clients, and prepare for a more structured and scrutinized market. Crypto Week captured the momentum and underscored a key message: financial professionals must understand the role of crypto in the broader system and decide how to engage responsibly. Three developments stand out. 1. Stablecoins: From Fringe to Financial Infrastructure Stablecoins are moving firmly into the financial mainstream. This week's anticipated vote on the proposed GENIUS Act, coupled with prior statements from the SEC, Federal Reserve, and FDIC, signals a turning point. The Act outlines a regulatory regime governing reserves, redemption rights, and public disclosures, bringing long-awaited clarity to compliant issuance. Institutional adoption is accelerating. Major banks are developing stablecoin or tokenized alternatives. Corporate treasurers are piloting stablecoins for payments and working capital management. Cross-border payments — historically a pain point — with stablecoins can be faster, cheaper, and more transparent. For advisors, this represents a fundamental shift in financial infrastructure. Exposure to regulated stablecoins could soon be as routine as managing money market allocations. As infrastructure shifts, liquidity strategies and treasury operations will evolve. Stablecoins are no longer fringe — they're becoming foundational. 2. A New Era of SEC Engagement & Institutional Scaling After years of friction, the SEC has taken a more proactive — but still cautious — approach. Through public roundtables, the agency is engaging stakeholders to better understand digital assets, staking, custody, and DeFi. These are not enforcement forums; they are opportunities to shape policy. Commissioners Peirce and Uyeda have emphasized the importance of collaboration and regulatory clarity. Under its Crypto 2.0 initiative, the SEC's Crypto Taskforce has published guidance on decentralized protocols, exchange-traded products, and custody standards. However, this shift doesn't mean due diligence is easier — it means it matters more. The SEC continues to examine how registrants are managing risk, controls, and disclosures. Growth from players like Robinhood and JPMorgan signals institutional scale, but not necessarily fiduciary alignment. Advisors must anchor diligence in the core duties of loyalty and care. This includes verifying the distinction between tokenized wrappers and underlying assets, understanding conflicts of interest, and assessing whether operations align with regulatory expectations. What appears compliant today could be scrutinized under future SEC leadership or litigation. 3. Security and Responsible Innovation As regulatory frameworks mature with efforts like the GENIUS Act and anticipated market structure reforms, misconduct persists. From AI-generated scams to pump-and-dump schemes, familiar fraud risks have evolved, often targeting less sophisticated investors or exploiting cybersecurity gaps. The SEC and CFTC continue to issue investor alerts, focusing not only on product design but also on marketing practices, cybersecurity, and fraud controls. The bar is rising—and firms that fail to meet it risk reputational damage and enforcement action. This creates a leadership opportunity. Advisors can protect clients by minimizing conflicts, applying rigorous due diligence, and steering capital toward products with real utility, transparent governance, and robust security protocols. This includes evaluating how incentives are structured and whether operational resilience is built into platforms. In today's environment, overlooking cybersecurity, governance, or fraud red flags isn't just careless — it may be seen as enabling misconduct. From Innovation to Trust The second half of 2025 marks a shift from momentum to maturity for the crypto industry. With regulatory clarity improving and institutional adoption rising, the groundwork is being laid for a more resilient and trustworthy financial system. Advisors who stay informed, ask hard questions, and embed client-first principles into their digital asset strategies will lead the transition toward responsible innovation. This isn't just about early adoption — it's about building lasting trust in the next generation of finance. - Unknown block type "divider", specify a component for it in the ` option Ask an Expert Q. Beyond the disbanding of the National Cryptocurrency Enforcement Unit, what changes in enforcement priorities are affecting investors? A. The stablecoin reserve requirements make sure that issuers actually have the assets needed to back the stablecoins being held, and giving stablecoin holders priority recovery in the case of insolvency adds a significant layer of confidence. Q. How should advisors around the world look at US regulatory changes and the effect on their businesses and clients' money? A. There is finally some much-needed clarity emerging around how to approach digital assets for investment. No one wants to operate in a high-risk environment where there is the chance of sudden, unexplained losses. Degens may accept the risk of rug pulling, but institutional investors will not. This opens up digital asset investing to the mainstream. Q. Are there any categories of tokens that benefit more than others with the current administration A. Tokens which fit easily into institutional financial frameworks, and their underlying utility tokens, will benefit strongly from the continuing emergence of institutional adoption. Q. Are the regulatory changes around digital assets helping to guarantee investor safety? A. Frameworks are being established that are similar in nature to the protections offered to consumers in traditional banking, thereby helping to increase investor safety across the board. Privacy tokens may continue to face regulatory headwinds as enforcement agencies seek transparent reporting and accounting features to ensure compliance. - Unknown block type "divider", specify a component for it in the ` option Keep Reading Bitcoin reached a new all-time high of just over $123,000 this week. Ripple applies for Charter Bank License in U.S. U.S. federal agencies provided further clarifications for banks to offer crypto services and custody. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
