stablecoins

CCData: It is expected that the Federal Reserve's interest rate cuts this year will lead to a total decrease of $1.5625 billion in interest income from stablecoins

ChainCatcher news, according to Cryptonews, the Federal Reserve recently decided to cut interest rates for the first time since March 2020, which is expected to impact the income streams of the five major centralized stablecoins. According to a report released by CCData on September 27, these stablecoins collectively hold nearly $125 billion in U.S. Treasury securities, and for every 50 basis points (bps) cut in interest rates, they could lose about $625 million in interest income. The report indicates that U.S. Treasury securities account for 80.2% of the reserves held by major stablecoins.Data from the Chicago Mercantile Exchange's FedWatch tool shows that the market expects a total interest rate cut of 75 basis points by the end of 2024, including a 50 basis point cut in November and a 25 basis point cut in December. If these predictions come true, stablecoins could face an additional income loss of $937.5 million, bringing the total potential loss from the Federal Reserve's easing policy to $1.5625 billion.Among the affected stablecoins, Tether's USDT holds the largest share of U.S. Treasury-backed reserves, totaling up to $93.2 billion, including U.S. Treasuries and repurchase agreements. Following closely is Circle's USD Coin (USDC), which holds $28.7 billion in U.S. Treasuries through the Circle Reserve Fund. Other stablecoins, such as First Digital USD (FDUSD), PayPal USD (PYUSD), and TrueUSD (TUSD), have smaller Treasury positions of $1.83 billion, $634 million, and $502 million, respectively.Despite these potential financial setbacks, the stablecoin market continues to show resilience. According to CCData, in September, the total market capitalization of stablecoins increased by 1.50%, reaching $172 billion, marking 12 consecutive months of growth.

The Financial Services Agency of Japan has initiated the revision of the fund settlement law, covering areas such as DeFi, cashless payments, and financial technology

ChainCatcher News, the Financial Services Agency of Japan held its first meeting of the Fund Settlement Law Revision Working Group on the 25th, beginning the review of regulations related to the fintech era, including crypto assets and stablecoins. The meeting aims to address the diverse needs brought about by the digitalization of financial services and to promote a balance between user protection and healthy market development.During the working group meeting, discussions were held on how to design a system for the rapidly evolving financial business, covering areas such as decentralized finance (DeFi), cashless payments, and fintech. The Financial Services Agency will strive to ensure the stability and competitiveness of the Japanese financial system based on international trends.One focus is to strengthen the regulation of crypto asset exchanges. The Financial Services Agency will learn from the lessons of the FTX bankruptcy in November 2022 and consider introducing mandatory requirements for exchanges to hold assets domestically under the fund settlement law framework, in order to enhance the protection of user assets in the event of an exchange bankruptcy.Discussions on stablecoins also aim to promote their use. Currently, specific trust-type stablecoins are subject to the same regulatory standards as bank deposits, but other countries have greater flexibility in the operation of supporting assets. Japan is also considering adjusting relevant regulations.

Analyst: The practicality of cryptocurrencies has become evident, with stablecoins, payment, and communication applications becoming the main scenarios

ChainCatcher news, according to Coindesk, K33 Research analyst David Zimmerman pointed out that despite the skepticism surrounding the MEME coin craze, the actual applications of cryptocurrency have begun to emerge. The market capitalization of stablecoins has reached $175 billion, becoming an important financial tool in emerging markets. In the payment sector, Mastercard has partnered with Mercuryo to enable over 100 million merchants to accept crypto payments; PayPal and Venmo have integrated Ethereum Name Service to simplify the transfer process.In the communication field, the DePIN project Helium has attracted 113,000 users to its mobile services. In social applications, Telegram, with nearly 1 billion monthly active users, has integrated the Open Network (TON), while LINE, with 230 million monthly active users, has also partnered with Kaia to promote the use of cryptocurrency in instant messaging. The major ride-hailing app in Southeast Asia, TADA, has launched "TADA Mini," allowing users to pay for rides using TON or USDT through Telegram.Zimmerman emphasized that these developments indicate that cryptocurrency is gradually integrating into daily life, providing real value to users. Although MEME coins still hold a significant market share, the serious aspects of the crypto industry are steadily progressing, offering innovative solutions to real-world problems.
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