Tokenization spikes, SEC delays Bitcoin ETF options, and more

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United States Treasurys tokenized on public blockchains surpassed $1 billion as traditional financial firms continued to load securities on-chain amid a prolonged period of elevated interest rates.

Data compiled by 21.co and Dune Analytics shows that tokenized government securities reached the $1 billion mark in assets on March 28, distributed across 17 products. A majority of the assets are based on the Ethereum, Polygon and Stellar networks.

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“The growth in tokenized treasuries on public blockchains like Stellar is a result of more asset issuers recognizing blockchain technology makes good business sense,” Paul Wong, director of product, CBDCs and institutions at the Stellar Foundation, told Cointelegraph.

Investment firm Franklin Templeton is among the companies tokenizing assets, with over $360.1 million in assets and 33.6% of the market share through its Franklin OnChain U.S. Government Money Fund. The fund, launched in 2021, is based on the Polygon and Stellar blockchains.

By volume, tokenized securities represent the largest asset class on the Stellar network, with a total tokenized market cap of over $430 million as of late March. “Blockchain is here to stay and is the future. We expect to see exponential growth in tokenization in the next few years,” said Wong.

Aside from the rise of tokenization markets, this week’s Crypto Biz explores PayPal’s stablecoin, SushiSwap’s move to a “Labs model,” and the U.S. Securities and Exchange Commission (SEC) delaying a decision on options trading on spot Bitcoin exchange-traded funds (ETFs).

SEC defers decision on Bitwise, Grayscale Bitcoin ETF options

The U.S. securities regulator has delayed its decision to allow the New York Stock Exchange to offer options trading on spot Bitcoin (BTC) ETFs. According to the April 8 filing, the SEC’s pushback will impact options trading on the Bitwise Bitcoin ETF, the Grayscale Bitcoin Trust and any other trust that holds Bitcoin on the NYSE. The securities regulator reached the same outcome for Nasdaq in March, which requested options trading on BlackRock’s iShares Bitcoin Trust. The next deadline for the SEC to either approve, deny or delay the proposed rule change on the NYSE is May 29.

Source: SEC

PayPal stablecoin circulation dropped 38% in March — Paxos

The circulation of PayPal USD (PYUSD), a stablecoin issued by PayPal and Paxos, declined by 39% in March, totaling $188.5 million. Previous months saw higher circulation, with $304 million in February and $301 million in January. Despite experiencing rapid growth in early 2024, doubling its market value within one month by mid-January, PYUSD has since faced a decline in circulation and market capitalization. The PYUSD treasury held $14.9 million in United States Treasury bonds as of March 29. The market capitalization of PYUSD has been decreasing since late February, falling from an all-time high of $312 million on Feb. 26, according to CoinGecko data.

SushiSwap DAO backs transition to “Labs model” in preliminary vote

SushiSwap has received a positive sign to move forward with a plan to adopt a less decentralized “Labs model.” Over 62% of voters favored this transition in a signal vote concluded on April 10. The proposal, introduced on March 26, outlines the creation of Sushi Labs, an autonomous entity responsible for managing the Sushi ecosystem’s administrative, technical and operational aspects. Tokenholders would still decide on treasury allocations but wouldn’t participate in operational decisions. In addition, the new entity would receive 25 million SushiSwap (SUSHI) tokens — worth around $39 million at current prices — and future airdrops from its affiliated protocols and partners. The Sushi community has criticized the move. 

Paradigm leads $225 million funding round for new “Solana killer” L1

Crypto-focused venture capital firm Paradigm has led a $225 million funding round into a new layer-1 blockchain network, which is set to compete for market share with Solana and other top networks. Monad Labs aims to build a new layer-1 smart contract network with faster speed and lower costs than Ethereum. According to a March 14 X post by Monad, the new L1 will be 100% compatible with the Ethereum Virtual Machine and capable of up to 10,000 transactions per second. Crypto VC funding turned positive in the first quarter of 2024, breaking a two-year slump. 

Before you go: Smart contracts that can be turned on and off by a multisig mechanism or governance vote are potentially problematic, says Coin Center’s Peter Van Valkenburgh.

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