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Asset Manager Van Eck Says Stablecoins Should Be Treated as Investment Funds, Not Banks

Asset Manager Van Eck Says Stablecoins Should Be Treated as Investment Funds, Not Banks

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Stablecoins should be treated like investment products, not banks, Jan van Eck, the CEO of the investment firm VanEck, wrote in a Barron’s op-ed on Wednesday.

“They don’t lend money, so I don’t understand why there is a push to regulate them like banks. Bank regulation may in fact imply some sort of government guarantee,” he wrote.

Van Eck’s broadside followed just two weeks after the U.S. Undersecretary for Domestic Finance, Nellie Liang, testified before Congress that stablecoins “are bank-like products…as well as an investment-like product, which is why there was a regulatory gap.” A group of regulators called the President’s Working Group for Financial Markets published a report last year recommending that stablecoins fall under the same regulations as banks.

In her testimony, Liang said that technology companies without bank licensing should not offer stablecoins.

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Van Eck criticized the Working Group report for not seeing the similarities between stablecoins and money market funds.

“Despite the similarity that stablecoins have with money market funds, the PWG suggested that stablecoin issuers be “insured depository institutions.” Stablecoins invest in securities; they don’t lend like banks do,” van Eck wrote.

He made two recommendations for a potential, stablecoin regulatory framework.

First, he suggested that the SEC oversee stablecoins for a four-year trial period similar to how it considers investment funds under the Investment Company Act of 1940.

Secondly, van Eck recommended not forcing tax withholdings on stablecoins in the future. This measure would give stablecoins an opportunity to prove their value in the U.S. “Most stablecoins currently don’t pay dividends,” he wrote. “We need, however, to imagine a day when stablecoins pay interest and plan technologically and regulatorily for that day.”

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Jerald David, the president of asset management firm Arca supports van Eck’s first proposal, saying that “stablecoins on the market today resemble more of a ‘40 Act product than a bank,”

“Adding a wrapper, and creating a Blockchain Transferred Fund would allow for a U.S. dollar proxy that would be welcomed by the banks and large scale financial institutions,” David said.

24-hour performance

Smart Contract Token Market Soars To $332 Billion; Defi Value Reaches High Not Seen Since FTX Collapse

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Smart Contract Token Market Soars To $332 Billion; Defi Value Reaches High Not Seen Since FTX Collapse

The smart contract token economy rose 5.6% against the U.S. dollar on Thursday, reaching $332 billion. Additionally, the value locked in decentralized finance (defi) increased to nearly $50 billion, a record high not seen since the collapse of FTX.

Smart Contract Economy and Defi TVL Bounces Back

On Thursday, Feb. 2, 2023, the top smart contract platform coin economy increased to $332.86 billion, a rise of 5.6% in the last 24 hours. Currently, roughly $20.44 billion in global trading volume is paired with smart contract tokens. Of the top ten smart contract crypto assets by market capitalization, polygon (MATIC) led in 24-hour gains, rising 12% in the last day. Aptos (APT) followed with the second-largest increase, jumping 10.4% higher on Thursday.

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Polkadot (DOT), chainlink (LINK), and solana (SOL) all experienced notable gains in the last day, jumping 6% to 7.1% higher. Smart contract coins outside the top ten that saw significant increases include near protocol (NEAR), which rose 11.4%, and fantom (FTM), which jumped 17.5% on Thursday. Parsiq (PRQ) was the largest gainer with a 27.7% increase, while counterparty (XCP) was the biggest smart contract token loser, shedding 9.9% on Thursday.

The value locked in decentralized finance (defi) has also risen and is near the $50 billion range, at approximately $49.48 billion. Lido Protocol leads the defi pack, as its total value locked (TVL) today represents 17.32% of the $49 billion on Thursday.

Lido’s TVL increased by 5.79%, and the second-largest defi protocol, Makerdao, jumped 2.97% in 24 hours. Rocket Pool experienced one of the biggest defi protocol increases in the last day with a 7.38% rise. According to defillama.com statistics, the top 20 defi protocol TVLs have all seen double-digit increases in the last 30 days.

Ethereum remains the top chain in decentralized finance today, as its defi protocols dominate the total value locked (TVL) by 59.4%. Ethereum is followed by Tron, Binance Smart Chain (BSC), Arbitrum, and Polygon, respectively, in terms of TVL size on Feb. 2, 2023.

Changes over the past month show that the top ten blockchains in terms of defi TVL have also seen double-digit increases in TVL. The largest increase in the last month was Optimism’s TVL, which increased by 47.41% over the 30-day span. The last time the TVL in defi was this high was in Nov. 2022, just before the crypto exchange FTX collapsed.

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24-hour performance, Aave, Arbitrum, Binance Smart Chain, blockchain rankings, blockchains, bnb, Cardano, crypto economy, crypto market trends, Cryptocurrency, Curve, decentralized finance, DeFi, DeFi protocol competition, Dominance, Double-Digit Gains, Ethereum, Ethereum Dominance, Lido Finance, makerdao, Market Capitalization, market rally, Polygon, Price Increase, smart contract asset performance, Smart Contract Platforms, Solana, Tokens, total value locked, tron, TVL growth, TVL size, uniswap, weekly performance

What do you think about the market performances of smart contract tokens on Feb. 2 and the rise in defi’s TVL? Share your thoughts in the comments sections below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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0.25%

Federal Reserve Raises Benchmark Interest Rate By 0.25%, Disinflationary Process ‘Early,’ Says Powell 

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Federal Reserve Raises Benchmark Interest Rate By 0.25%, Disinflationary Process ‘Early,’ Says Powell 

The U.S. Federal Reserve raised its benchmark federal funds rate by 0.25% on Wednesday after markets priced in near 100% certainty the Federal Open Market Committee (FOMC) would codify the quarter-point increase. The FOMC statement further detailed that ongoing rate increases are anticipated to bring inflation down to the target range of 2%.

FOMC Outlines Expectations for Future Rate Hikes

The central bank of the United States raised the federal funds rate on Wednesday, increasing it by 0.25% to the current range of 4.5% to 4.75%. The FOMC detailed in a statement that indicators show there has been “modest growth in spending and production” and job gains have been “robust in recent months.” However, the committee says that while inflation has dropped, it “remains elevated,” and it believes the conflict in Ukraine is “causing tremendous human and economic hardship.”

“The committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run,” the FOMC statement details. “In support of these goals, the committee decided to raise the target range for the federal funds rate to 4-1/2 to 4-3/4 percent. The committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.”

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The federal funds rate has been increased eight consecutive times and is now at its highest level in about 15 years. The Federal Open Market Committee has stated that “ongoing increases” would be appropriate at every meeting since March. Market analysts and investors have shown conflicting signals over the Fed rate hikes, with some expecting the central bank to soften its stance, and others anticipating that Jerome Powell will continue to raise the benchmark interest rate. The Fed’s rate hike on Wednesday was the smallest since March 2022.

On Wednesday, Powell said that monetary tightening will continue “until the job is done” and added that the “disinflationary process that is now underway is really in its early stages.” The crypto economy appeared unfazed by the Fed’s decision on Wednesday, and prices jumped 0.9% higher after Powell’s comments. Bitcoin (BTC) rose 1.4% and ethereum (ETH) jumped more than 2% higher.

Bitcoin (BTC) prices rose after the FOMC statement on Wednesday.

After sliding during the early morning trading sessions on Wednesday, U.S. stocks regained most of the losses following the Federal Open Market Committee statement. All four U.S. benchmark equity indexes are in the green as Wednesday’s closing bell nears. Precious metals such as gold and silver also saw gains, with gold up 0.79% and silver up 0.72% following the Fed’s statement.

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0.25%, 15 years, benchmark interest rate, Bitcoin, Central Bank, conflicting signals, crypto economy, disinflationary process, early stages, economics, Federal Funds Rate, Federal Reserve, FOMC, FOMC statement, Gains, gold, inflation, Investors, jerome powell, job gains, Losses, March, market analysts, maximum employment, Monetary Policy, Monetary Tightening, Precious Metals, Raise, Restrictive, silver, softer stance, statement, stocks, target range, Trading sessions, Ukraine conflict

What are your thoughts on the Federal Reserve’s decision to raise the benchmark interest rate and how will it affect the economy in the long run? Let us know your thoughts about this subject in the comments section below.

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Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

Image Credits: Shutterstock, Pixabay, Wiki Commons

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$3 Billion

Stablecoin Economy Sheds Another $3 Billion In 44 Days

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Stablecoin Economy Sheds Another $3 Billion In 44 Days

The stablecoin economy continues to deplete as more than $3 billion has been erased from the stablecoin market ecosystem over the last 44 days. While statistics show that tether’s market valuation has risen by 2% over the last 30 days, usd coin’s market cap slid by 2.9%, BUSD valuation shed 7.2% over the last month and gemini dollar’s market capitalization slid by 1.5%.

$3 Billion in Dollar-Pegged Tokens Erased in 44 Days as Stablecoin Swaps Represent Nearly 80% of Global Crypto Trade Volume

The overall value of the top stablecoins by market capitalization has shed roughly $3 billion during the last 44 days or since Dec. 15, 2022. At that time, the stablecoin economy was worth $141.07 billion. On that day, stablecoin swaps represented $44.55 billion of the $53.91 billion in global trade volume.

The total market capitalization of the entire stablecoin economy on Jan. 28, 2023.

After losing more than $3 billion, the stablecoin economy is valued at $138.07 billion, and stablecoin trades equate to $46.33 billion of the $58.76 billion in global trades on Jan. 28, 2023. Out of the top ten stablecoin assets, three market capitalizations have lost value during the last 30 days.

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Statistics show that usd coin (USDC) has shed 2.9% in the past month, and BUSD lost the most with a 7.2% reduction in 30 days. The Binance-affiliated and Paxos-managed dollar-pegged token BUSD has seen a significant number of redemptions over the last few months. At the time of writing, BUSD’s overall market cap in U.S. dollar value is $15.8 billion.

Top five stablecoins by market capitalization on Jan. 28, 2023. USDC shed 2.9% and BUSD lost 7.2% over the last 30 days in terms of tokens in circulation.

USDC’s market capitalization on Saturday is around $43 billion. On Dec. 15, 2022, the valuation was around $45 billion. Similarly, gemini dollar’s (GUSD) market cap was around $591 million 44 days ago, and today it is around $571 million. While there were a few stablecoin projects that saw market capitalizations slide, tether, DAI, trueusd (TUSD), and pax dollar (USDP) saw increases.

Tether (USDT) saw a 2% increase in coins in circulation over the last 30 days. Makerdao’s DAI increased by 1%, and trueusd (TUSD) climbed 25.3% higher. Pax dollar (USDP) rose by 5.1% and Tron’s USDD saw a small increase of around 0.6% over the last 30 days. Liquity usd (LUSD) managed to rise by 24.4% over the past month, and Abracadabra’s stablecoin MIM jumped 3.9%.

While tens of billions in stablecoin assets have been removed since last year, they still represent a dominant force in the crypto economy. Since May 2022, three stablecoin assets have remained in the top ten market cap positions: USDT, USDC, and BUSD. Both USDT and USDC have been in the top ten positions for much longer.

Furthermore, the entire stablecoin economy, valued at $138 billion, represents 12.71% of the entire crypto economy’s value of $1 trillion. In trade volume alone on Saturday, Jan. 28, stablecoins equated to 78.85% of all crypto asset trades worldwide on both centralized and decentralized exchange (dex) platforms. That means more than seven out of ten crypto asset trades today, have been swapped with a stablecoin.

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$3 Billion, 30-days, 44 days, Abracadabra, Assets, Binance, BUSD, BUSD decline, Centralized, Circulation, Crypto, crypto economy, Cryptocurrency, DAI, decentralized exchange, decline, Dollar-Pegged, Dominance, Economy, Gemini Dollar, Global, Liquidity, loss, LUSD, makerdao, market, Market Capitalization, market positions, MIM, Pax dollar, Paxos, redemptions, Stablecoin, Stablecoin Economy, Tether, Tether (USDT), Top Ten, trade, tron, trueusd, usd coin, usd coin (USDC), USDD, Value, volume

What does the recent decline in the stablecoin economy signify for the overall cryptocurrency market? Share your thoughts in the comments.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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