Stablecoins Boost U.S. Treasury Demand, Solana Spot ETFs Gain Traction & More

Welcome back!

This is J264G and today a new chapter in the Great American Experiment begins — wishing my friends in the U.S. nothing but the best.

Here are this week’s titbits: 

• Crypto Retirement: Could 401(k) plans soon gain access to crypto ETFs?

• Solana Spot ETF: Canary Capital joins the ranks of VanEck and 21Shares. 

• Stablecoin Economics: USDT & USDC fuel demand for short-dated treasuries.

Not much of an intro needed this week — the chart below says it all.

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

Click on any underlined heading/hyperlink to learn more.

Spotlight

Convergence

In the past, traditional financial entities, fintechs, and the onchain economy operated in separate realms. But now, legacy institutions and neo-platforms are increasingly adopting crypto — i.e. digital assets and blockchain technology — into their products and services.

Stripe and Robinhood are the canaries in the coal mine. 

Stripe’s acquisition of Bridge strengthens its foothold in the stablecoin and digital payment ecosystem, while Robinhood’s entry into prediction markets is a nod to Polymarket’s success — and that of Kalshi, of course.

This convergence of business models means that competition between traditional finance and crypto platforms is intensifying. 

But why are legacy institutions moving into the crypto spaces? 

There are three compelling reasons: 

• Seamlessly borderless: Unlike traditional financial systems, which face heavy regulatory hurdles when expanding internationally, crypto is inherently borderless. Platforms built on crypto rails can scale internationally without the usual cross-border complexities of time zones, currency exchange, and local regulatory requirements. This global approach is increasingly attractive to traditional finance, which is typically weighed down by operational challenges and sees crypto as a vehicle for easier, more extensive reach.

• Reducing financial overheads: Crypto rails also reduce transaction costs by eliminating intermediaries. Where legacy payment systems are slow and charge hefty fees for processing transactions — credit card fees alone can reach up to 3.5% — crypto transactions are often faster and cheaper. Also, crypto's use of smart contracts enables companies to build innovative, low-cost financial services, empowering them to test and launch new products and services more quickly to drive growth — particularly benefiting those who are unbanked or underbanked.

• Boosting profit margins: Operating on crypto rails also enhances profit margins. With fewer intermediaries and lower transaction costs, companies leveraging crypto rails often see higher margins than legacy institutions. This efficiency enables crypto-focused firms to allocate more funds toward growth and innovation, fueling faster scalability and enabling them to pass cost savings on to customers. For traditional finance and fintechs, this represents an opportunity to become more competitive and dynamic in the face of rising competition.

The success of Stripe and Robinhood’s recent moves will likely inspire a wave of similar crossovers.

Having said that, the convergence of traditional finance and crypto platforms has only just begun to redefine global finance — being early to adopt these hybridised business models will, however, pay off.

Chart Of The Week

Solana surpasses all other blockchains in monthly DEX volume.

News Bites

Stablecoin Economics: The U.S. Department of the Treasury recently shared insights on digital assets, stablecoins, and tokenisation, noting that fiat-backed stablecoins have fueled demand for short-dated treasuries. This trend is largely due to the growth of major stablecoins such as USDT and USDC, which hold a substantial share of their collateral in U.S. Treasuries.

RWA Tokenisation: Libeara, backed by Standard Chartered, and FundBridge Capital are bringing U.S. Treasury investments onchain with the Ultra Fund. The Ultra Fund will initially be deployed on Ethereum, with plans to expand to Solana. 

Solana Spot ETF: Crypto asset manager Canary Capital has filed for a Solana Spot ETF with the SEC, joining the ranks of VanEck and 21Shares.

Crypto Retirement: State Street Global Advisors is working to integrate exchange traded funds into the U.S. retirement system, which could pave the way for 401(k) plans to access crypto ETFs — though this is likely a longer-term prospect.

Anti-Crypto Crusade: The Blockchain Association reports that the SEC’s actions under Gary Gensler’s leadership have cost crypto companies at least $429 million in litigation expenses. 

Network Ponderings: In a recent post, Solana co-founder Anatoly Yakovenko explores whether Solana could significantly reduce hardware requirements for validators without sacrificing high throughput and low latency. 

Infrastructure Boost: Syndica has launched its V2 RPC implementation, offering enhanced real-time dashboards, new rate-limiting control, and the lowest latency and slot-lag among Solana RPC providers. 

Developer Shift: According to Electric Capital, North America has lost its leading share of crypto developers to Asia — with North America’s share falling from 44% in 2015 to 24% in 2024, while Asia’s share rose from 13% to 32%, making it the top region for crypto talent.

Caught In 4K

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.}