Morgan Stanley Considers Crypto Trading, Quantum Attacks On Solana & More

Welcome back!

This is J264G and this week I’ve got these titbits for you:

• Crypto Proliferation: E-TRADE considers adding cryptocurrency trading.

• Quantum Attacks: How will zero-day quantum attacks affect Solana?

• Growing Momentum: Stablecoin volumes now rival those of Fedwire.

In December, Ray Dalio suggested that Bitcoin is “hard money”, insinuating that it possesses qualities such as scarcity, durability, and resistance to inflation, making it a reliable store of value compared to traditional fiat currencies.

This ties in with Bloomberg’s latest reporting that BlackRock’s iShares Bitcoin Trust ETF (IBIT) broke industry records in 2024, amassing over $50 billion in assets within 11 months — making it the most successful ETF debut to date.

And now, the 119th Congress, the most pro-crypto in history, has been sworn in — 2025 is shaping up to be a pivotal year for crypto.

Now, let’s jump right into this week’s newsletter!

Click on any underlined heading/hyperlink to learn more.

Spotlight

The Stablecoin Misconception

The initial benefits of stablecoins are widely misunderstood.

Conventional wisdom suggests that stablecoins will primarily disrupt merchant payment services for online and brick-and-mortar retail. 

While this might hold true in the long term, it’s far from today’s reality. Most consumers don’t hold USDT or USDC for everyday transactions, and most merchants lack the infrastructure to accept, hold, and process stablecoins.

Even merchants wanting to adopt stablecoin rails are often locked into long-term contracts and rely on legacy software and hardware that tie them to an established payments network consisting of Visa, Mastercard, PayPal, FIS, Stripe, Adyen, and more. This network is well-oiled and effective, making it prohibitively expensive and difficult to disrupt. Moreover, as stablecoin markets mature and stablecoin providers’ yield from U.S. Treasury holdings diminish, the cost of the stablecoin economy may rise, potentially matching the 1.5% in fees of the payment incumbents.

In short, stablecoins are unlikely to be the silver bullet merchants are hoping for to significantly lower transaction fees. Again, while stablecoins may eventually transform merchant payments, the process will be slower and more incremental than initially expected.

Having said that, stablecoins are uniquely positioned to disrupt cross-border transactions and foreign exchange (FX). 

For decades, incumbents in these sectors have faced criticism for their extremely slow, high-cost services. This has created ample attack vectors for new entrants, which especially benefit from the fact that cross-border transaction and FX incumbents lack a tightly-knit and protective ecosystem such as Visa, Mastercard & Co — leaving them more exposed, vulnerable, and ripe for disruption by stablecoins and their underlying rails.

Consequently, we’ll increasingly see legacy financial institutions and fintechs leveraging stablecoins for cross-border transactions and FX. Simply put: The focus will be on prioritising enterprise (B2B) over consumer (B2C) use cases.

As B2B business models typically involve larger values, recurring contracts, and longer customer lifecycles, they more often than not result in higher revenue per customer — which could be the key to driving crypto adoption and bringing stablecoins into the mainstream.

Charts Of The Week

News Bites

𝕏 Money: Linda Yaccarino has announced that 𝕏 will launch its payment system, 𝕏 Money, in 2025. While details remain under wraps, the @XMoney profile has been live on 𝕏 since January 2024. Regardless, it will be intriguing to see if the 𝕏 payment system integrates crypto rails in any way at all.

Quantum Attacks: Recently, Google’s Willow quantum chip sparked concerns about potential blockchain vulnerabilities. Now, discussions are emerging on how quantum zero-day attacks might affect Solana — dive into the details below to learn more.

Crypto Proliferation: E-TRADE, a subsidiary of Morgan Stanley, is considering adding cryptocurrency trading to its offerings. Morgan Stanley acquired E-TRADE for $13 billion in 2020, bringing 5+ million customer accounts under its umbrella.

Growing Momentum: Stablecoin monthly volumes have reached levels comparable to Fedwire — a real-time gross settlement (RTGS) system operated by the Federal Reserve, used for high-value, time-critical transfers between financial institutions in the United States.

Swiss Bitcoin: A proposal has been initiated to require the Swiss National Bank (SNB) to hold Bitcoin as part of its reserves alongside gold. The initiative has 18 months to collect 100,000 signatures for a public referendum.

EU Regulation: The MiCA (Markets in Crypto-Assets) regulation is now officially in effect in the EU, applying to crypto-asset issuers and service providers. Learn more about the regulation’s goal to foster innovation and protect consumers here.

Caught In 4K

Bitcoin 🤝 Solana

Weekly Take

Keks & Giggles

And that's a wrap!

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Talk soon!

J264G

_{DISCLAIMER
None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research. Lastly, please be advised that we discuss products and services from our partners from which our team members may hold tokens/equity.}