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SEC, PayPal Stablecoin, and State-Backed Tokens: Key Updates Investors Need to Know
SEC faces legal challenges, PayPal stablecoin grows with Solana integration, and state-backed stablecoins gain momentum.
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SEC Faces Legal Hurdles in Regulating Stablecoins
Binance and CZ have pleaded guilty to illegal activity, paid billions in fines, and face massive legal hurdles, but the SEC just suffered a legal setback in its efforts for Binance. The SEC closed its investigation into Binance USD stablecoin issuer Paxos without recommending sanctions.
Paxos should be happy about the lack of enforcement, but this could potentially impact cryptocurrency regulation.
Stablecoins stand to benefit as the SEC faces increasing legal battles to designate the entire cryptocurrency sector as securities.
Since these cryptocurrencies, almost all backed 1:1 by the US dollar, were designed to be used as a medium of exchange rather than an investment vehicle, these drawbacks might allow for more objective discussions.
PayPal’s PYUSD Gains Ground With Solana Integration
PayPal’s stablecoin efforts have continued after a low-profile launch and an SEC investigation. Forbes reports that the recent integration with the Solana blockchain has increased the token’s market cap to over $500 million. DeFillama data suggests that Ethereum’s supply is $399 million, 77% of the total supply, with the remainder on Solana.
Solana supply increased by 58% in the first week of integration, while Ethereum supply decreased by 6%.
Given the familiarity of the PYUSD name among consumers and the increased integration with Solana, PayPal and PYUSD look set to continue to expand and gain popularity.
Wyoming State Stablecoin WYST Makes Headlines
Minting of the state-backed token began in May 2024 after some resistance and legislative issues. The token backed by a 1:1 US dollar will begin circulation in 2024 under the ticker WYST.
Senate Enrolled Act 85: The Wyoming Stable Token Act authorized the Stablecoin Commission to create the first state-backed stablecoin in the United States. The Ethereum-based WYST will only be traded on centralized exchanges like Coinbase.
While it is still too early to gauge the success or spread of WYST, the fact that a state has come this far so quickly demonstrates how popular stablecoins are.
Stablecoins are here to stay and are essential for TradFi, centralized exchanges, DEXs, and cryptocurrency investors of all sizes.