Crypto Biz: Digital Assets Boost US Dollar Exposure

A growing number of cryptocurrency firms are looking to benefit from the increasing interest in United States dollar-denominated digital assets. Recently, Tether, the issuer of the well-known Tether (USDT) stablecoin, introduced a synthetic dollar that is backed by gold and tied to the U.S. dollar. This development followed closely on the heels of Assymetry’s release of its synthetic dollar, afUSD, which boasts an elastic supply that varies with market conditions.

The emergence of new tokens that replicate the U.S. dollar is noticeable, particularly since the launch of Ethena’s synthetic dollar, USDe, in February 2024. Ethena’s protocol has managed to accumulate over $3.4 billion in total locked assets within just four months. This significant volume illustrates the strong global demand for dollar-pegged cryptocurrencies and has particularly rattled existing stablecoin competitors.

There has been a significant uptick in the scale of tokenized funds that provide exposure to U.S. Treasurys. Highlighting this trend, BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) recently reported over $462.7 million in assets by mid-June. Similarly, Franklin Templeton’s OnChain U.S. Government Money Fund (FOBXX) held $357.6 million in assets. Altogether, about $1.5 billion worth of U.S. Treasurys has been tokenized, with most of this activity occurring in recent months.

As traditional finance increasingly integrates with blockchain technology, there are additional developments noteworthy in the crypto sector. This week’s focus includes Hashdex’s submission for a hybrid spot Bitcoin (BTC) and Ether (ETH) exchange-traded fund (ETF), Coinbase’s new pre-launch market feature, Ripple’s ongoing regulatory struggles in the U.S., and the exit of more stablecoins from the European market.

In line with these developments, Hashdex has filed with the SEC to create a combined spot Bitcoin and Ether ETF, which will trade on the Nasdaq exchange. This ETF plans to follow the Nasdaq Crypto US Settlement Price Index and will consist of approximately 70.54% Bitcoin and 29.46% Ether. Custodianship of the ETF assets will be shared between Coinbase and BitGo. Hashdex still needs to secure SEC approval through an S-1 application.

Coinbase International is rolling out a new pre-launch market feature, designed to let users trade futures of tokens and coins that are not yet listed on the exchange. This innovative service offers early trading opportunities, permitting users to engage with upcoming tokens ahead of their official market debut. The feature, which will be accessible to both institutional investors and retail traders, sets initial margin caps at 50% and a notional position limit of $50,000 per token.

In regulatory news, the SEC has pushed back against Ripple’s plea for a reduced penalty in their ongoing lawsuit. Ripple proposed a penalty of no more than $10 million, referencing the SEC’s settlement with Terraform Labs as a benchmark. The SEC contended that applying a similar financial ratio from Terraform’s case would imply a penalty of $102.6 million for Ripple instead. The SEC is seeking nearly $2 billion from Ripple, which includes prejudgment interest, civil penalties, and disgorgement fees.

On the regulatory front in Europe, the digital asset platform Uphold has declared it will delist six stablecoins by July 1 due to the forthcoming Markets in Crypto-Assets (MiCA) regulation by the European Union. This delisting trend is becoming common as cryptocurrency platforms adjust their operations to meet the new regulatory standards. Users holding USDT, Dai (DAI), Frax (FRAX), Gemini dollar (GUSD), Pax dollar (USDP), and TrueUSD (TUSD) on Uphold must convert these assets to a different cryptocurrency by June 28, or they will be automatically converted to USD Coin (USDC).

Reflecting on the crypto sector’s progress, more than $100 billion has been raised for cryptocurrency startups since May 2014. Despite the industry’s volatility, marked by frequent highs and lows, the general trend points to raised ceilings and floors, highlighting robust investor interest and the sector’s ongoing maturation.

Lex Cornwall

Lex Cornwall

35 thoughts on “Crypto Biz: Digital Assets Boost US Dollar Exposure

  1. Hashdex applying for a hybrid Bitcoin and Ether ETF? More unnecessary financial products for speculators.

  2. Tethers gold-backed synthetic dollar brings in a new level of stability for investors. Game-changing indeed!

  3. Hashdex’s combined spot Bitcoin and Ether ETF is a forward-thinking move. Cant wait to see it roll out!

  4. Ripples regulatory struggle is a tough one, but it highlights the importance of clear laws in the crypto space. Transparency is key!

  5. Ethena, Tether, and Assymetry launching synthetic dollars shows the competitive edge sharpening in the stablecoin market. Excellent!

  6. Tokenized U.S. Treasurys… seems like these firms are overcomplicating simple investments.

  7. The sheer volume of locked assets in Ethena’s protocol demonstrates huge global demand. A new era for stablecoins!

  8. BlackRock and Franklin Templeton making waves with their tokenized funds. Integration of traditional finance with blockchain FTW!

  9. Traditional finance giants like BlackRock entering the crypto space legitimize it as a serious competitor. Exciting times ahead!

  10. So, Ripple is still fighting with SEC over fines? Makes me question the legitimacy of these crypto firms.

  11. The move towards synthetic dollars shows the crypto market’s maturity. Flexible, stable options are the future!

  12. Ethena hitting $3.4 billion in just four months is astounding. Clearly, the market trusts their protocol! 🌟💼

  13. Uphold’s delisting due to MiCA regulations highlights the importance of compliance in the evolving crypto landscape. Necessary, albeit tough moves. 🌐⚖️

  14. Ripple proposing a $10 million penalty? More like they are trying to bargain their way out of real trouble. ⚖️

  15. The growing interest in dollar-pegged cryptocurrencies is a clear sign of the future. Exciting times ahead! 🚀

  16. I’m really skeptical about these synthetic dollars. Seems like just another way for companies to profit off the hype.

  17. billion raised for crypto startups since 2014 is proof of the industry’s resilience and growing investor interest. 🌟🙌

  18. Ripple’s lawsuit underscores the urgent need for comprehensive crypto regulations. They set critical precedents! ⚖️🔍

  19. Coinbase’s pre-launch market feature is a fantastic innovation. Kudos for making early trading opportunities accessible to everyone!

  20. The surge in tokenized U.S. Treasurys reflects traditional finance embracing blockchain. Truly revolutionary!

  21. Why so many synthetic dollars now? Feels like the market is being flooded with unnecessary tokens.

  22. The integration of traditional finance with blockchain tech is game-changing. BlackRock and Franklin Templeton are just the beginning! 🔗🏅

  23. Assymetry’s elastic afUSD is an intriguing concept. It’s nice to see flexible options that align with market conditions. 🌐💹

  24. Ethena amassing over $3.4 billion in locked assets in just four months is phenomenal. Shows massive confidence in dollar-pegged crypto!

  25. The rise of dollar-pegged synthetic assets showcases the increasing blend of stability and innovation in crypto.

  26. The scale of tokenized funds in U.S. Treasurys is impressive. Shows how far we’ve come in integrating traditional and digital finance. 🔗💹

  27. Exciting innovations from Tether and Assymetry. Crypto keeps getting better and more diverse! 🌍💎

  28. Ethena’s rapid accumulation of locked assets shows strong global demand for stable, dollar-pegged digital currencies. Amazing!

  29. Every new token pegged to the U.S. dollar highlights the growing trust and demand. Very promising for the future!

  30. Ethena’s $3.4 billion locked assets in just four months? That’s a red flag for potential bubbles.

  31. Hashdex’s spot BTC and ETH ETF could be a huge win for crypto investors. Fingers crossed for SEC approval!

  32. The interaction of traditional finance and blockchain tech, such as with BlackRock, is inspiring and can lead to greater financial inclusion.

  33. Just another week of regulatory drama in the crypto world. Are any of these firms trustworthy?

  34. Seeing Coinbase introduce a pre-launch market for tokens is brilliant. Early access for users is a huge plus!

  35. Tether’s synthetic dollar backed by gold is a game changer! This stable evolution is exactly what the market needs. 🪙👑

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