Stablecoin Legislation Advances: What It Means for the Crypto Market

Well, let's get to the big story breakdown.

The US Senate voted 68 to 30 to advance stablecoin legislation clearing the path for a final vote.

The Genius Act now moves to debate after cloture was invoked yesterday.

The procedural vote clears the way for a final vote as early as next week, and the bill would require stablecoins to be fully backed by US dollars or similar liquid assets, mandate annual audits for issuers worth more than $50 billion in market value, and add new guardrail.

For foreign issuers, but even if the measure passes the Senate, its future in the House does remain uncertain.

The House Financial Services Committee has already advanced a separate stablecoin bill, the Stablecoin Transparency and Accountability Act, which peer committee back in May.

And that's not all.

The House also scored a pair of votes to advance the Digital Asset Market Clarity Act, a sweeping bill that would create a full regulatory framework for US oversight of crypto markets.

Joining me here at the New York Stock Exchange.

Morning to talk is Andy Beer, head of product and research at Coin Desk Indexes.

Good morning, Andy.

Thank you so much for joining me.

Good morning.

And we can't underestimate how important the Sablecoin acts are that there's a $25 trillion of stablecoins in the market now that could easily go to several trillion dollars, right?

This is a new customer for US Treasuries.

It's a new use of blockchain technology for payments and for other trading liquidity for crypto, so can't underestimate that.

For the rest of crypto it's a very mixed picture right now, and I guess if you put everything together in the blender, you get up with short, you come out with short term pressure, long term support.

Right now the geopolitical issues are causing an evacuation from some risk assets that's going to affect Bitcoin and affect the alts even more.

You have the Macroeconomic news, which was I guess supportive of more Fed rate cuts to or priced in by the end of the year, that's somewhat positive but maybe not positive enough.

We'll have to see how inflation expectations continue and then there's um you know, and.

There's the price action.

Bitcoin has been for 36 days now in a $10,000 range, right between 10 and $2000 and $112,000.

We really haven't haven't seen any catalyst.

We're right in the middle of that as of this morning.

Haven't seen any catalyst for a breakout from there.

And as you're talking about this in New York morning trade, we are looking at both crypto majors Bitcoin and ET pulling back.

But earlier this week we did see that move above the 110 level for Bitcoin, and we did see quite a rally for ET, although it is pulling back and managing to hold above 2700.

So what are the catalysts for Ethan?

What fundamentals are you paying attention to?

This is a very interesting story because it was, it was really kind of lifeless up until about May.

6th 7th and then what we believe was a short squeeze rally or a short covering rally took it up about 50%, which, you know, from about 1700 to well above at the time towards its high, 2700.

Remember, ether was trading at 4000 back in November, so we're nowhere near all-time highs, but it was an incredible rally, even if it was market driven, you know, or technically driven rather than sentiment driven.

That being said, this has Brought on this has inspired some inflows into ETFs in the United States and Europe.

People wanting to get on board with that price momentum.

So Ether has done its job.

It's kind of stalled out here along with Bitcoin.

We'll have to see what happens next, but it has helped the coin 20 index rally 20% since that May 7th date.

So we feel like again very hard to time things, very hard to know when a short squeeze is going to happen.

So for investors better to go wide.

And you mentioned stablecoins, Andy, and it's hard to believe that it's already been a week since Circle went public here at the New York Stock Exchange.

I know you were upstairs.

We were not on together here at FinTech TV, but what does this mean, not just for the crypto landscape, but also IPOs and here in the US there might not be as much of a familiarity with stablecoins, but what do you expect to see moving forward?

Stablecoin growth and new entrants into the market.

Because right now it's a pretty good business with fiat interest rates at 4% and stablecoin is not able to pay any of that.

There are ways to redistribute some of that margin, but there are ways to also keep some of that margin.

So it's it's a very profitable business right now.

The US government is encouraging it in part because these stablecoins have to be packed with backed with US Treasury.

So you have trillions of dollars of potential Treasury demand to be tapped, credit card companies and payment companies. are all kind of adopting stablecoins.

There's a lot of crypto money out there that wants to make payments and wants to keep its value on chain.

Stablecoins is a very fiat currency neutral way to do that.

So it's it really runs counter to nothing and it really seems like the political momentum right now is very strong in getting it done.

So remember, all of those stable coins have to clear, have to trade on a blockchain like Ethereum or Solana.

Uh, and that's important to realize this is a great use of blockchain technology.

OK, Andy, well, great to have you back on here at the New York Stock Exchange next Thursday will be a market holiday, so we'll see you the week after next.

Thank you so much for sharing your insights.

Thanks, Ray.