“Stablecoins were able to create this whole catalyst effect and now finally TradFi is understanding that this is not only one particular asset class, it’s basically financial infrastructure.” – 02:01

Sandeep Nailwal, CEO of the Polygon Foundation, joins Remy Blaire at the New York Stock Exchange to discuss the rapid growth in the market for tokenized real-world assets (RWAs), which has surged to nearly $34 billion, reflecting a remarkable 224% increase in 2024 alone. With projections estimating a valuation of $30 trillion by 2034, the implications for traditional finance (TradFi) are significant.

Sandeep shares insights into the increasing institutional adoption of tokenized treasuries and private credit, emphasizing the evolution of crypto from a speculative asset class to a vital financial infrastructure. He highlights the role of stablecoins as tokenized versions of fiat currencies and discusses the trend of tokenizing various financial instruments, including bank deposits and mutual funds, which enhances liquidity and creates new investment opportunities.

The conversation shifts to recent developments in the crypto space, including notable deals such as Circle’s public listing and the New York Stock Exchange’s investment in Polymarket. Sandeep reflects on the recent crypto flash crash, describing it as a chaotic event triggered by a stablecoin’s de-pegging, which led to a cascading effect across the market. He underscores the interconnectedness of the crypto ecosystem and the necessity for robust infrastructure to prevent similar incidents in the future.

Remy and Sandeep also delve into Polygon’s latest upgrade, Rio, which significantly enhances the blockchain’s transaction capacity from 200 to 5,000 transactions per second (TPS). This upgrade positions Polygon as one of the highest throughput chains in the industry, enabling applications like PolyMarket to scale effectively and serve a larger user base. Sandeep discusses the strategic focus on stablecoins and tokenization, which are crucial for driving volume and facilitating payments.

Additionally, they touch on Stripe’s recent launch of subscription services on Polygon, showcasing the platform’s growing utility in the fintech space. Sandeep highlights how major players are increasingly choosing Polygon for their blockchain needs, reinforcing the ecosystem’s commitment to utility over speculation.

“This was a stress test that the network passed with flying colors.” – 02:16

Kristin Smith, President of Solana Policy Institute, joins Remy Blaire to discuss the ongoing U.S. government shutdown, which has now entered its third week. She notes that the shutdown has surpassed the typical three-day average and could potentially break the record of 35 days set during former President Trump’s first term. Remy highlights the impact of the shutdown on the cryptocurrency market, particularly the delay in spot ETF requests and the lack of progress on the Clarity Act.

Kristin provides insights into the current state of the crypto market, especially following a significant liquidation event that resulted in over $19 billion in liquidations. Despite this turmoil, she emphasizes the resilience of decentralized finance (DeFi) technologies, particularly the Solana network, which has shown impressive performance with peak transaction processing exceeding 100,000 transactions per second and maintaining low fees during high traffic periods.

Kristin discusses the positive developments in the crypto sector throughout the year, including increased regulatory clarity driven by initiatives like the Genius Act and the SEC’s project crypto. She explains that these advancements are encouraging banks and asset allocators to explore crypto technologies more seriously, presenting a significant opportunity to enhance financial infrastructure.

The conversation shifts to the impact of the government shutdown on crypto policy discussions in Washington, D.C. Kristin explains that while the shutdown has temporarily stalled progress, legislative conversations around market structure and tax hearings are still ongoing in Congress. She expresses optimism that once the shutdown concludes, regulatory agencies will resume their important work.

Finally, Remy and Kristin touch on the status of Solana Exchange-Traded Products (ETPs), which are currently in a holding pattern due to the shutdown. Kristen shares her belief that the SEC’s recent approval of generic listing standards will facilitate the introduction of Solana ETPs, providing a valuable investment vehicle for those unable to hold crypto directly.