A Busy Week in Crypto: Stablecoin Legislation, Institutional Interest, and Ethereum’s Challenges
Updated: February 7, 2025, 6:07 PM UTC
Published: February 7, 2025, 4:59 PM UTC
This week has proven to be eventful in the world of cryptocurrency, featuring significant product launches, discussions surrounding Ethereum’s future, advancements in stablecoin legislation, and notable Congressional hearings focusing on the trend of ‘debanking.’
New Stablecoin Legislation Prospects
A critical development occurred as Senate leadership participated in a high-profile press conference led by David Sacks, the Crypto and AI Czar. During this event, Senator Bill Hagerty of Tennessee introduced a new stablecoin bill aimed at establishing an oversight regime for stablecoin issuance. This proposal seeks to build upon a previous bill that successfully navigated the House last year but stalled in the Senate. With the Republican Party now holding the majority in the Senate, there is an enhanced likelihood that this new proposal will pass, as it garners support across party lines. CoinDesk’s Jesse Hamilton provided extensive coverage on this significant legislative movement.
Congressional Hearings on Debanking
In a related topic, the Senate held hearings to explore the coordinated policies employed by institutions such as the Federal Deposit Insurance Corporation (FDIC) that have led to the denial of financial services to cryptocurrency companies. Nathan McCauley, CEO of Anchorage Digital—an institutional custody provider—offered testimony based on his experiences. Additionally, Joe Lubin, founder of Consensys, revealed that his company had faced debanking issues on two separate occasions. These testimonies underscore the challenges that crypto companies face in navigating traditional financial systems, as highlighted in reports by Ian Allison.
Ondo Finance Launches New Tokenization Blockchain
In other news, Ondo Finance has officially launched a novel blockchain designed for tokenization, with hopes of capturing emerging institutional interest in real-world assets (RWAs). Notably, World Liberty Financial—backed by former President Donald Trump—immediately acquired $470,000 worth of ONDO, the governance token of the platform. This investment suggests a strong belief in the potential of Ondo’s offerings. This story was covered by Kris Sandor and Helene Braun in their reporting.
Ethereum’s Challenges Amidst Competition
Ethereum, the second-largest cryptocurrency by market capitalization, is facing hurdles, according to JPMorgan analysts who have indicated that ether has underperformed relative to competitors such as Solana. Analysts attribute this underperformance to Ethereum’s struggle to find a compelling narrative akin to Bitcoin’s reputation as ‘digital gold.’ Despite the challenges, Ethereum’s development team has made progress with the implementation of the Pectra upgrade and continues to enjoy robust support from its community, including endorsements from notable figures like Eric Trump, as detailed by Will Canny and Margaux Nijkerk.
Bitcoin and Gold: A Complementary Relationship
Interestingly, while Bitcoin has often been referred to as ‘digital gold,’ it appears that traditional gold is also influencing the performance of cryptocurrencies. The precious metal has recently experienced a significant price increase, leading to a rise in gold-backed cryptocurrencies such as PAXG and XAUT, which have outperformed even Bitcoin throughout the year. Francisco Rodrigues explored the dynamics of this interplay between gold and cryptocurrencies in his coverage.
A Significant Privacy Case Update
In a critical moment for internet privacy, Alexey Pertsev, a developer associated with Tornado Cash—an Ethereum mixing protocol—was released from jail pending an appeal of his previous conviction. Pertsev had been sentenced last year to 64 months in prison, and his release marks a significant moment in ongoing discussions about privacy in the cryptocurrency space.
Conclusion
As the week wraps up, significant movements in legislation, advancements in technology, and evolving narratives around key cryptocurrencies paint a complex picture of the current landscape. Stakeholders in the cryptocurrency industry are closely monitoring these developments, which hold profound implications for the future of digital finance.
Happy weekend to all!
Benjamin Schiller
Managing Editor for Features and Opinion at CoinDesk
Previously Editor-in-Chief at BREAKER Magazine, and a staff writer at Fast Company. Holding some ETH, BTC, and LINK.
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