The Federal Reserve has no immediate plans to launch a central bank digital currency (CBDC) to digitize the dollar, so Wyoming is pioneering its own stablecoin.

The Wyoming state token could be launched as soon as Q1 25, according to CNBC. While the stablecoin will utilize the Solana network, Wyoming  has yet to select the partners that will provide the exchange and wallet services.

Once the framework is established, Wyoming consumers will be able to use the tokens to pay for everyday purchases. The state also plans to invest the stablecoins’ reserves in instruments like treasury bonds, with any returns being used to fund the state’s public schools.

“It’s no surprise that Wyoming is looking to leverage the Solana blockchain for their stablecoin, as it’s currently the fastest blockchain,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research “Once the Firedancer upgrade happens on the Solana blockchain, there will likely be a significant shift of development with payment providers and other financial institutions. After Custodia Bank was denied from the highest level, Wyoming isn’t giving up, and it’s very encouraging to see innovation thrive in this state.” 

Nimble and Entrepreneurial

Wyoming-based Custodia Bank, which provides custody services for crypto and digital assets, sued the Federal Reserve of Kansas City in an attempt to gain access to a master account and membership with the Fed. Although the lawsuit was dismissed in March, the bank said it would continue to resist the Federal Reserve’s “strong-arm tactics.”

While the stablecoin launch is not in opposition to the Federal Reserve, the Fed has delayed the introduction of a CBDC due to concerns about consumer privacy and security. According to Wyoming Governor Mark, the Wyoming state token could serve as a model for the Fed’s digital dollar.

“It is clear to me is that digital assets are going to have a future,” Gordon told CNBC. “The United States has to address this issue. Washington’s being a little bit stodgy, which is why Wyoming, being a nimble and entrepreneurial state, can make a difference.”

Akin to Switzerland

Amid the uncertainty surrounding the crypto industry, many regulators have shown greater support for stablecoins, which are less volatile than many cryptocurrencies. A successful launch of the Wyoming state token could have widespread ramifications.

“Wyoming has been the leading state in crypto acceptance, and it is attempting to maintain that lead,” Hugentobler said. “Their stance on crypto is akin to that of Switzerland—they fully support it and they have passed roughly 30 laws to help push innovation while still protecting consumers.”

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Ripple unveiled its website for the highly anticipated launch of its Ripple USD (RLUSD) stablecoin.

The stablecoin, first announced in April, offers potential for instant payouts, simple fiat-to-stablecoin conversions, and cross-border applications. RLUSD is designed to track the U.S. dollar one-to-one and will be issued on the XRP Ledger and Ethereum blockchains.

RLUSD will compete in a market dominated by Tether’s USDT, which has a market capitalization of over $114 billion, and Circle’s USD Coin, which has nearly a $34 billion market cap. The increasingly crowded stablecoin market even includes a stablecoin from payments giant PayPal.

“Stablecoins have proved to have a solid product market fit,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “XRP’s blockchain doesn’t offer the speeds like those found on other blockchains like Solana. However, their TPS (transactions per second) are significantly higher than that of Ethereum, which is the primary chain that USDC & USDT operate on.”

Enterprise Grade

Though other coins have a strong head start, Ripple believes there is room for RLUSD in a market expected to hit $2.8 trillion by 2028. The company claims its stablecoin is unique because it’s designed to be “enterprise-grade” from the start—RLUSD was built with financial institutions and business payments in mind.

RLUSD will be fully backed by U.S. dollar deposits, short-term U.S. government treasuries, and other cash equivalents. Ripple announced its intentions to be fully transparent about the composition of its reserves and stated it would provide monthly statements detailing its assets.

Regulatory Uncertainty

Ripple  has also designed its offering with compliance in mind, working to build its portfolio of licenses for the stablecoin. Unfortunately, RLUSD hasn’t received regulatory approval yet, and it’s not unclear when that will occur.

Regulatory uncertainty around crypto and digital assets has been a common theme over the past few years. Lawmakers have promised new crypto regulations will be forthcoming, including rules specifically governing stablecoins.

“Despite a number of legal challenges, Ripple is determined to press on and gain market share in the dominating stablecoin market,” Hugentobler said. “Ripple appears to be doing all the right things, yet they have continued to take flack, debatably for the entire industry. Once the regulatory challenges end, Ripple’s conglomerate and wide-ranging product suite will continue to be a leader in industry innovation and standards.”

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Luxury sports cars and cryptocurrency naturally share a market among wealthy, status-conscious individuals. Ferrari is capitalizing on that connection by announcing it will accept bitcoin and other cryptocurrencies at its European dealerships starting this month.

The Italian automaker began accepting bitcoin and crypto payments at its U.S. dealers last year. But Europe, the Middle East, and Africa remain its largest market, with more than 1,500 cars sold there in Q1 2024, compared to just under 1,000 in the Americas. Ferrari plans to expand the bitcoin payment option to all of its dealers worldwide by the end of this year.

In Europe, as in the U.S., Ferrari is partnering with bitcoin payments processor BitPay to process the payments. In addition to providing technical expertise, BitPay helps insulate the carmaker’s dealers from crypto pricing uncertainty. When a customer buys a Ferrari using bitcoin, BitPay instantly converts it to traditional fiat currency to eliminate any volatility.

The expansion into Europe indicates that Ferrari views the U.S. bitcoin payment initiative as a success. Enrico Galliera, Chief Marketing and Commercial Officer at Ferrari, mentioned last year that the order books were full into 2025.

Galliera also said at the time that the company’s decision to accept crypto was influenced by Ferrari’s dealers, as well as potential purchasers. “Some are young investors who have built their fortunes around cryptocurrencies,” he said. “Some others are more traditional investors who want to diversify their portfolios.”

Crypto and Luxury Brands

Ferrari isn’t the first luxury brand to embrace crypto. Gucci, TAG Heuer, and Balenciaga have all announced they would accept cryptocurrency payments.

It’s also not the first luxury carmaker to explore this area. Tesla, one of Ferrari’s rivals, announced in 2021 that it would start accepting bitcoin as payment for its electric cars and even invested more than $2 billion worth of bitcoin to facilitate the payments.

However, Tesla reversed that decision within a few months, citing concerns about the climate impact of energy-intensive bitcoin mining. This past May, Tesla announced that it would start accepting the less popular dogecoin for Tesla-related merchandise, although not for purchasing its cars. On the other hand, consumers are able to buy a Ferrari with dogecoin.

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Japan is expected to lift regulations that prevent limited partners, or institutional investors, from investing in crypto and digital assets.

To gauge the crypto readiness of Japanese financial institutions, Nomura recently surveyed 547 investment managers. The survey found that 54% of Japanese limited partners plan to invest in digital assets within the next three years. The main reason cited was portfolio diversification, but institutional investors also show interest in digital assets due to their low correlation with other asset types and their potential as a hedge against inflation.

“The report doesn’t indicate the assets under management the financial institutions have, but given Nomura’s size and market positioning, the survey results are meaningful,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “It’s a significant shift in sentiment that over half of the institutions plan to invest in digital assets, and that has changed just over the past few years.”

ETF Enthusiasm

U.S. institutional investors made a substantial impact on the crypto market after the launch of 11 bitcoin exchange-traded funds in January. These ETFs are managed by some of the largest financial institutions in the world, including BlackRock, Fidelity, and Grayscale.

Since the launch, many large banks and hedge funds have taken an estimated $3.5 billion stake in bitcoin ETFs, including Wells Fargo, JPMorgan, and Morgan Stanley.

“The U.S. has the strongest stock market and the most value traded outside of maybe foreign exchange markets,” Hugentobler said. “The launch of the ETFs will continue to increase global awareness and drive inflows over time. It will also spur the creation of additional crypto ETFs based on Solana or Doge, where investors can further diversify and gain access to higher beta investment instruments within the digital asset ecosystem.”

Regulatory Risk

The Nomura report found that ETFs are the preferred vehicle for Japanese institutional investors. Around 53% of respondents said they would invest via ETF, while a smaller percentage (31%) indicated they would invest in digital assets directly.

Although Japanese investment managers are increasingly positive about crypto, they raised a few concerns. Chief among them was the regulatory risk involved with crypto investments. There have been investigations of all the major U.S. crypto exchanges lately, and bitcoin ETFs only received approval after a long legal battle with the U.S. Securities and Exchange Commission.

For those reasons, most crypto industry experts believed the SEC wasn’t likely to approve Ethereum ETFs. It was a significant win for the crypto industry when U.S. regulators recently approved the new ETFs—something their Japanese counterparts likely watched closely.

“As more vehicles become available, such as the bitcoin or Ethereum ETFs, awareness will increase and so will the exposure,” Hugentobler said. “It will all, in turn, lead to a higher price floor, which solidifies the space even more and creates a positive demand feedback loop.” 

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Deutsche Bank, the largest financial institution in Germany, announced it will process the deposits and withdrawals for Austrian cryptocurrency broker Bitpanda. The bank will assign Bitpanda customers with international bank account numbers, and Deutsche will process all of the broker’s fiat transfers in real time.

The partnership is an important step in banks’ tenuous adoption of crypto. Deutsche Bank’s leaders said they were cautious about making the move, but Bitpanda’s platform met all the bank’s stringent compliance requirements. Under the new agreement, all crypto transfers will occur on Bitpanda’s platform.

“For some time, banks of all sizes across Europe have been exploring their options with crypto service providers and looking for ways to get their feet wet in the industry,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “Most of the businesses these banks serve have been holding crypto on their balance sheet for years.”

Regulatory Clashes

Though there have been major strides toward mainstream crypto adoption, the industry has also locked horns with regulators lately. The U.S. Securities and Exchange Commission has brought recent actions against most of the major crypto players, including Coinbase and Robinhood. The SEC has long alleged that digital assets are securities and that crypto platforms are unregistered securities exchanges.

Although Bitpanda is a crypto broker, not an exchange, it’s a big win for the platform that Deutsche Bank entered the partnership in the current regulatory environment. The bank’s established systems and reconciliation processes will greatly facilitate transactions for the crypto broker’s 4 million users.

A New Framework

Widespread bank endorsement has long been considered a critical step for crypto adoption, but the risks to financial institutions have outweighed the benefits. That changed after the passage of the Markets in Crypto-Assets regulation in 2023. The new laws governing digital assets were the first of their kind, and they are expected to take effect this year.

“All this has emerged from the MiCA regulation, which has clearly provided a solid regulatory framework and therefore spurred acceptance of crypto across Europe,” Hugentobler said. “This industry has largely been untapped by banks and institutions, so it’s no surprise they’re trying to get involved now and get their share of revenue and fees.“

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Mastercard announced its peer-to-peer crypto ecosystem, which is now available to users in Latin America and Europe. The credit card giant’s platform integrates with the Lirium, Bit2Me, and Mercado Bitcoin exchanges.

Mastercard Crypto Credential gives users readable aliases that replace the long string of letters and numbers that have traditionally defined crypto wallet addresses. The ecosystem also makes payments safer, verifying every user and interaction to make sure the right asset is routed to the right wallet.  

“This pilot has great potential to bring further innovation in the cross-border payment space,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “Mastercard’s platform conducts the KYC processes to verify users, in addition to expanding its optionality of payment types to its customers for those who aren’t looking to convert their crypto to fiat, or who just want faster payments in general.”

Simplifying the Exchange

The often-complex crypto exchange process has been a barrier to entry for many users, and Mastercard’s crypto solution should simplify transactions. There is added risk when digital assets are transferred cross-border, but all transactions on Mastercard Crypto Credential will be conducted in compliance with the Travel Rule, a regulation designed to identify and prevent illegal activity. 

With the launch, users in Argentina, Brazil, Chile, France, Guatemala, Mexico, Panama, Paraguay, Peru, Portugal, Spain, Switzerland, and Uruguay can now transfer multiple assets over disparate blockchains. Mastercard’s platform will initially integrate with the Lulubit wallet through the Lirium platform, and the Foxbit crypto wallet. 

Centralized DeFi

Mastercard Crypto Credential aims to be a centralized global digital asset exchange. While P2P transactions will be the first applications for the platform, the company hopes to expand the platform to support the exchange of NFTs, tickets, and other payment types. 

While that functionality might be welcome to many, it also raises concerns about the growing centralization of digital assets that were designed to be decentralized. The launch is the latest in an increasing trend of large financial institutions investing heavily in crypto-centric initiatives. Still, Mastercard’s global highway of connections could do more to accelerate crypto adoption than hinder it.

“Mastercard is a payments giant, so the development and launch of this product will have positive trickle-down implications,” Hugentobler said.

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Cryptocurrency exchange Uniswap released a statement asserting that the U.S. Securities and Exchange Commission’s legal theories on crypto are “weak and wrong.” The statement came in response to the Wells Notice the SEC filed against the crypto exchange a few weeks ago, indicating it will pursue legal action against Uniswap.

The SEC’s biggest misconception, according to Uniswap, is that all digital tokens are securities, when in fact they should be considered a file format for value. The company accused the SEC of attempting to unilaterally alter the definitions of brokers, exchanges, and investments.

“It’s significant that the SEC has chosen to pursue a case against a protocol like Uniswap,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “In a sense, it’s a battle against decentralized code. They’re overreaching and opening a can of worms that shouldn’t be opened—decentralized protocols operate far differently than a traditional company like Apple or Microsoft.”

Expanding Jurisdiction

The Uniswap Protocol gives users a platform to securely exchange crypto directly with each other. The autonomous software excludes intermediaries, allowing for faster and inexpensive transactions. Uniswap asserted its tokens are a file format just like a PDF, and its protocol is open to anyone with an internet connection.

The SEC views the Uniswap Protocol as an unregistered securities exchange run by Uniswap Labs and considers its UNI tokens an investment contract. Uniswap rebutted that the SEC’s goal is to expand its jurisdiction beyond exchanges to communications technology and seek oversight of all markets.

Security or Commodity

The notice to Uniswap was the latest in a series of Wells Notices and lawsuits the SEC has brought against crypto exchanges. The commission has taken action against many of the major crypto players, including Coinbase, Robinhood, and Binance. All those cases hinged on the assumption that crypto should be considered a security, not a commodity.

“I’d be very surprised if Uniswap doesn’t win this lawsuit,” Hugentobler said. “Instead of enacting punishments, the SEC should work with exchanges to establish a sound regulatory framework for crypto companies. All these companies have tried being as compliant as they can, albeit in a decentralized manner, yet they are still being targeted by the SEC.” 

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The U.S. Securities and Exchange Commission will likely decide the fate of two proposed spot ether (ETH) exchange-traded funds this week, and crypto supporters are bracing for a letdown. The VanEck and ARK Invest ETFs face a May 23 deadline, and some investors worry a denial could lead to a crypto selloff.

If the ETFs aren’t approved, it will likely be due to fraud and security concerns arising from the insufficient regulatory framework around cryptocurrency. Most of the laws regulating securities have been in place for decades and don’t have the bandwidth to address crypto and digital assets.

“Without any cop on the beat, it’s forcing investors to go on their own outside of the investment advisory community because the community can’t help them, because we don’t know what the rules are,” Ric Edelman, head of the Digital Assets Council of Financial Professionals told CNBC. “They’re ending up in scams and frauds.”

Hesitant Acceptance

After the recent bitcoin ETF launch, crypto investors were hoping ether ETFs were next in line. However, the SEC only acquiesced to bitcoin ETFs because it lost a legal battle. Following the reluctant approval, SEC chair Gary Gensler issued a statement cautioning investors about the risks of investing in cryptocurrency.

The SEC aims to take a wait-and-see approach to scrutinize the performance of bitcoin ETFs before approving any other crypto funds. One reason Gensler signed off on bitcoin ETFs is because bitcoin was the only cryptocurrency he considered a commodity, not a security.

Ether is a more complex crypto than bitcoin, so the commission seems almost certain to balk. The SEC is also worried that approving an ether ETF could open the door to a flood of crypto and digital asset funds.

Unlikely Odds

Due to these factors, the crypto community has put the odds of ether ETF approval at 7%. Some experts, however, believe there’s a 30%-35% chance the two ETF applications get the nod.

If denied, ether ETF providers could follow the same route as bitcoin ETF companies and take legal action against the SEC. While they might eventually win, a lengthy court battle could keep ether ETFs off the market for some time. It would also disappoint Grayscale and Bitwise, whose applications are next on the chopping block.

The crypto market has been strong over the past few months, in part due to the bitcoin ETF approval, and ETH holders hope that an SEC denial won’t hinder that resurgence. ETH is currently up over 32% year-to-date.

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Stand With Crypto, an alliance of 440,000 crypto supporters, announced it will create a political action committee (PAC) to donate to crypto-friendly politicians ahead of the November U.S. elections.

The PAC has identified five initial candidates from both parties that will run for seats in the Senate and House of Representatives. The committee will be entirely supported by contributions from Stand With Crypto’s growing constituency. Once those donations are received, the PAC will distribute the funds directly to its favored candidates to aid in campaign support.

“A uniting movement like this is significant in my opinion,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “From the launch in August of last year to surpassing 400,000 members already, it shows that the broader crypto community is working to support political leaders that will not only enable but encourage innovation in the U.S.”

Bolstering Support

Apart from the PAC, Stand With Crypto has raised over $86 million, which the organization has used to fund informational events and crypto town halls. The group was launched by Coinbase in an effort to bolster crypto support.

Though it has touted itself as a grassroots organization, over half of its donations have come from Coinbase CEO Brian Armstrong. There are still enough enthusiasts in the organization, however, to set the PAC apart. Most of the other digital assets PACs have been dominated by big-name companies.

Many of those same cryptocurrency exchanges have been under extreme scrutiny from legislators, including SEC lawsuits against Coinbase, Binance, Robinhood, and others. Despite regulatory issues, there has been a substantial uptick in the crypto market in the early months of 2024.

Ramping Up

Stand With Crypto hopes to keep the positive trend going, but it may take some time to ramp up. Because the new PAC’s donations will go directly to politicians, donors will have to identify themselves and they will be capped at a $5,000 contribution. Still, those constraints shouldn’t weigh too heavily on the PAC given its rapid growth.

The group has already identified other candidates it plans to support. Stand With Crypto keeps tabs on the legislators that back crypto and ranks them on their crypto friendliness. The organization believes increasing political support is a necessary step to keep America current on cryptocurrency.

“The U.S. has been falling behind the UK and EU on regulatory adoption, and the Stand with Crypto movement is proof we need to catch up,” Hugentobler said. “A sound framework will enable companies to work in confidence and compliance, and help the U.S. continue to be a leader in innovation. “

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Under pressure from the U.S. Securities and Exchange Commission, Robinhood has taken steps to ensure its crypto division isn’t violating securities law. The trading platform recently delisted several tokens, including Polygon, Cardano, and Solana, in response to the government agency’s litigation against other crypto exchanges.

However, these actions weren’t enough to assuage the SEC. Despite the company asserting it made years of “good-faith attempts” to cooperate with the government agency, Robinhood announced it recently received a Wells Notice from the SEC. The notice serves as a preliminary indicator that the agency has gathered enough information to bring an enforcement action against Robinhood and is likely to do so.

The crux of the complaint is the contention that certain digital tokens should be considered securities instead of currencies, an allegation Robinhood has denied.

“We firmly believe that the assets listed on our platform are not securities and we look forward to engaging with the SEC to make clear just how weak any case against Robinhood Crypto would be on both the facts and the law,” wrote Dan Gallagher, Robinhood’s Chief Legal, Compliance and Corporate Affairs Officer, in response to the notice.

Heavy Scrutiny

Crypto exchanges have come under heavy scrutiny from government agencies. The SEC sued Binance and its founder, Changpeng Zhao, on similar securities violations. That lawsuit was one of many legal actions against the company, the latest of which resulted in four months of prison time for Zhao.

The SEC also gained ground in a suit against Coinbase, alleging the crypto exchange engaged in the unregistered selling of securities. The Coinbase and Binance lawsuits spurred Robinhood to make a last-ditch attempt to register with the SEC as a special-purpose broker for digital assets, but this effort proved unsuccessful.

Just Noise

Robinhood is a popular trading platform that boasted 10.9 million monthly active users by the end of 2023. Initially focused on stocks, the company branched out to include a crypto wallet in 2022. While Robinhood has worked hard to avoid government action, the SEC’s efforts may not have a drastic long-term impact on the company.

“The industry will keep experiencing these gut-punches until a regulatory framework is established, but it will survive.” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “In the end, a lot of these notices are just noise. It’s important to remember the bigger picture and consider what is being built behind the scenes.”

After an initial plunge on news of the SEC notice, Robinhood shares are up around 1%.

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