Crypto Biz: Tokenization spikes, SEC delays Bitcoin ETF options, and more

Over $1 billion worth of United States Treasury tokens have been transferred onto public blockchains, with traditional financial institutions increasingly moving their securities online in response to extended high-interest rate conditions.

According to the data collected by and Dune Analytics, the value of tokenized government securities surpassed $1 billion on March 28th. This figure is spread across 17 different products. A significant portion of these assets are built on Ethereum, Polygon, and Stellar networks.

“Paul Wong, Stellar Foundation’s CBDCs and institutions product director, explained to CryptoMoon that the increase in tokenized treasuries on public blockchains such as Stellar is due to an increasing number of asset issuers discovering that using blockchain technology is beneficial for their businesses.”

Franklin Templeton, an investment firm, is one of the businesses converting assets into digital tokens, with approximately $360.1 million in assets and a 33.6% market share. This is accomplished through its Franklin OnChain U.S. Government Money Fund, which was established in 2021 and operates on the Polygon and Stellar blockchain platforms.

Tokenized securities make up the largest category by value on the Stellar network, boasting a market capitalization of more than $430 million as of March’s end. Wong, in his optimistic outlook, predicts an explosive expansion in tokenization during the upcoming years. “Blockchain technology is no longer a novelty; it’s here to stay and will shape our future,” he added.

This week’s Crypto News features several noteworthy developments: PayPal introducing a stablecoin, SushiSwap shifting to a “Labs” structure, and the SEC postponing a ruling on Bitcoin ETFs with options trading.

SEC defers decision on Bitwise, Grayscale Bitcoin ETF options

The decision of the United States securities regulatory body to permit options trading on Bitcoin ETFs listed on the New York Stock Exchange (NYSE) has been postponed. As stated in a filing from April 8, this delay will influence options trading for Bitwise Bitcoin ETF, Grayscale Bitcoin Trust, and any other trust with Bitcoin holdings on the NYSE. Similar action was taken by the SEC towards Nasdaq’s request for options trading on BlackRock’s iShares Bitcoin Trust in March. The SEC has set a new deadline of May 29 to make a decision regarding the proposed rule change on the NYSE.

Crypto Biz: Tokenization spikes, SEC delays Bitcoin ETF options, and more

PayPal stablecoin circulation dropped 38% in March — Paxos

PayPal’s stablecoin, PYUSD, issued in collaboration with PayPal and Paxos, experienced a 39% decrease in circulation during March, amounting to $188.5 million. In contrast, the previous months registered higher circulation levels, with $304 million in February and $301 million in January. Following a period of significant growth at the beginning of 2024, which saw PYUSD‘s market value double within one month by mid-January, there has been a decline in both circulation and market capitalization for this stablecoin. As of March 29, the PYUSD treasury held $14.9 million in US Treasury bonds. The market capitalization of PYUSD has been on a downward trend since late February, dropping from its peak of $312 million on Feb. 26, as per CoinGecko data.

SushiSwap DAO backs transition to “Labs model” in preliminary vote

SushiSwap is gaining support to shift towards a less decentralized structure, called the “Labs model,” based on the results of a recent vote. Over 62% of the voters approved this change in a poll that ended on April 10. The suggested plan involves establishing Sushi Labs, an independent organization responsible for managing the administrative, technical, and operational facets of the Sushi ecosystem. Token holders will continue to determine treasury distributions but won’t have a role in operational decision-making. Furthermore, Sushi Labs would receive 25 million SUSHI tokens (approximately $39 million at current prices) and future airdrops from associated protocols and partnerships. However, the Sushi community has expressed concerns about this development.

Paradigm leads $225 million funding round for new “Solana killer” L1

A venture capital firm specialized in cryptocurrency, Paradigm, has headed a $225 million investment round for a new blockchain network aiming to become a contender in the market alongside Solana and other leading networks. Monad Labs intends to construct a fresh layer-1 smart contract platform that promises faster processing times and reduced expenses compared to Ethereum. As mentioned in an X post on March 14 by Monad, this new L1 will be fully compatible with the Ethereum Virtual Machine and capable of handling up to 10,000 transactions per second. The first quarter of 2024 marked a positive turn for crypto venture capital funding, bringing an end to a two-year downtrend.

Before you go: Smart contracts that can be turned on and off by a multisig mechanism or governance vote are potentially problematic, says Coin Center’s Peter Van Valkenburgh.

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2024-04-13 00:14