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Donald Trump made history by signing stablecoin legislation into law, officially kicking off a race between crypto incumbents and those tradfi wannabes.
- Trump makes crypto history, Tether makes plans
- Banks firming up stablecoin plans
- Banking lobbies oppose crypto charters
- Trump to allow tokens in 401(k) plans?
- Polymarket plots U.S. return after DoJ/CFTC drop probes
- WLFI unlock looms; TMTG has $2 billion in BTC
- WLF’s new $100m partner denies (sort of) Web3Port ties
Last week, history was made when the U.S. House of Representatives approved three pieces of digital asset legislation: the stablecoin-focused GENIUS Act, the market structure CLARITY Act, and the Anti-CBDC Surveillance State Act.
The first two bills passed with significant bipartisan support. GENIUS garnered a 308-122 score, with CLARITY not far behind at 294-134. The more controversial CBDC bill passed by a 219-210 vote, with just two Dems voting in favor, and the latter bill’s future in the Senate remains uncertain.
CLARITY will also face an unknown fate, given that the Senate plans to introduce its market structure bill at some point. The Senate Banking Committee was reportedly waiting to see how last week’s House votes went before releasing their draft legislation, but it’s anyone’s guess when that magical moment might occur.
As for GENIUS, having already passed the Senate, the bill headed to President Trump’s desk for signing into law on Friday, the first time any digital asset legislation has become the law of the land. In a statement released by the White House, Trump repeated his oft-stated view that he was helping to “make the U.S. the crypto capital of the world.”
Numerous crypto luminaries were on hand for the historic event, and the White House released a video of some of their statements. Appearing were Brian Armstrong, CEO of Coinbase (NASDAQ: COIN) digital asset exchange; Kraken CEO Dave Ripley; Gemini co-founders Cameron and Tyler Winklevoss; Jeremy Allaire, CEO of USDC stablecoin-issuer Circle (NASDAQ: CRCL); Ben Horowitz, partner of the tech-focused venture capital group Andreessen Horowitz (a16z); and Vlad Tenev, CEO of Robinhood Markets (NASDAQ: HOOD).
Also on hand was Paolo Ardoino, CEO of market-leading stablecoin issuer Tether (USDT). Ardoino’s presence at the signing ceremony—even earning a shout-out from Trump, although he mangled the pronunciation of Ardoino’s surname—was a milestone all on its own, given Tether’s history of legal dustups with U.S. authorities.
In a post-ceremony interview, Ardoino reiterated Tether’s plans to issue a U.S.-specific stablecoin focusing on “payments and high, high, high efficiency.” Ardoino also claimed that Tether “will comply with the GENIUS Act,” which gives foreign issuers a three-year window in which to meet requirements such as submitting fiat reserves to a third-party audit, something Tether has studiously avoided to date.
In a separate interview, Ardoino clarified that, in addition to issuing a new U.S.-focused token, Tether will work to make its flagship USDT stablecoin GENIUS-compliant. Ardoino claimed, “It’s crazy that sometimes people think Tether will not comply.” Given that those audits were promised a decade ago and still haven’t arrived, perhaps not so crazy. Check back with us in three years.
Banks eyeing stablecoins
Also on hand for the GENIUS signing was Michael Miebach, CEO of Mastercard (NASDAQ: MA), emphasizing the degree to which mainstream financial giants are determined to play a role in the stablecoin sector.
Mastercard’s head of global policy, Jesse McWaters, issued a statement detailing how his company has been “preparing for this moment for years” via products such as the Mastercard Multi-Token Network and Mastercard Crypto Credential. Last month, Mastercard struck a deal with Fiserv (NASDAQ: FI) to “accelerate mainstream stablecoin adoption.”
We’re about to witness a flood of big-name banks jump into the stablecoin pool, with the likes of JPMorgan (NASDAQ: JPM) having already revealed their plans to launch their own fiat-backed tokens while simultaneously discussing a joint effort with other Wall Street fixtures.
On a summer conference call last week, Charles Schwab CEO Rick Wurster discussed his group’s participation in these “consortium efforts to … deliver a stablecoin to the market.” Wurster said Schwab was also “exploring our own avenues” and a decision would be made soon whether to keep the band together or go solo.
Last week, Citigroup CEO Jane Fraser said her firm was “looking at the issuance of a Citi stablecoin.” Bank of America (NASDAQ: BAC) CEO Brian Moynihan, who hasn’t hidden his desire to carve out a slice of the stablecoin payments market, said last week that “we’ve done a lot of work” on this front and investors “expect our company to move on that.”
Morgan Stanley (NASDAQ: MS) CFO Sharon Yeshaya said her bank was “actively discussing” stablecoin involvement, looking at “the landscape, the uses and the potential uses for our own client base.” But Yeshaya sounded a note of caution, saying it’s “a little early to tell, especially for the businesses we run versus businesses that you might see from competitors, on how a stablecoin would play in.”
Banks unsure about crypto bank charters
Other elements of the traditional finance sector are unsure how to handle crypto firms invading their space, like the ones seeking national bank charters. On July 17, several U.S. banking organizations sent a joint letter to the Treasury Department’s Office of the Comptroller of the Currency (OCC) expressing unease over “the policy, legal, and commercial implications” of issuing bank charters to crypto operators.
The letter was sent by the American Bankers Association (ABA), America’s Credit Unions, the Consumer Bankers Association, the Independent Community Bankers of America, and the National Bankers Association. The groups expressed concerns over the recent charter applications of Circle, Ripple Labs, Fidelity, and others, including whether “the Applicants’ proposed business plans involve the types of fiduciary activities performed by national trust banks.”
The letter cites a lack of sufficient detail in the public portions of the applications, as well as concerns that granting these applications would represent “a fundamental departure from existing OCC precedent.” The groups feel that “such a departure demands public input” and thus a “delay” in processing the applications is warranted to ensure adequate public scrutiny of these would-be bankers’ plans.
Lest anyone view this as bankers reacting negatively to anything ‘crypto,’ consider that the ABA sent Congress a letter supporting passage of the Anti-CBDC Act and a separate letter thanking House leaders for incorporating changes to GENIUS. That GENIUS letter also expressed hope that the ABA will play a role in enhancing certain provisions of both stablecoin and market structure legislation going forward.
Digital golden years?
The intersection of crypto and traditional finance could become even more entwined if Trump loosens restrictions on holding digital assets in U.S. retirement plans.
Last week, the Financial Times reported that Trump was preparing an executive order that would allow employer-sponsored 401(k) retirement programs to include investments beyond traditional stocks and bonds, including digital assets, precious metals, and more speculative private equity funds.
Private equity groups such as Apollo, Blackrock (NASDAQ: BLK), and Blackstone are reportedly chomping at the bit to offer these products to plan administrators, based on the higher fees these assets carry. These same groups are reportedly pressing the Trump administration to ensure plan administrators are offered safe harbor to minimize their legal risks in the event that these speculative products live down to their reputation.
Not every investor will be eager to welcome these products into their portfolios. As one analyst told Newsweek, “I’ve seen retirees lose sleep over 2% market dips. Imagine explaining to your 67-year-old mom that their crypto allocation just lost half its value because Elon tweeted about his breakfast.”
The White House refused to confirm the FT report, saying only that Trump was “committed to restoring prosperity for everyday Americans and safeguarding their economic future.”
In May, the Department of Labor rescinded Biden-era guidance that discouraged employers from including digital assets in employees’ 401(k) plans, although it stopped short of formally endorsing tokens as sound retirement options. Instead, Secretary of Labor Lori Chavez-DeRemer said, “Investment decisions should be made by fiduciaries, not D.C. bureaucrats.”
Polymarket returning to U.S. shores
In yet another example of just how quickly this worm is turning, the Polymarket prediction betting site is preparing to resume its U.S.-facing operations after acquiring the holding company behind QCEX, a U.S.-licensed derivatives exchange and clearinghouse.
Polymarket CEO Shayne Coplan said the $112 million deal means “we are laying the foundation to bring Polymarket home—re-entering the US as a fully regulated and compliant platform that will allow Americans to trade their opinions.”
QCX holds a derivatives license issued by the Commodity Futures Trading Commission (CFTC), the same agency that forced Polymarket to shed its U.S. customers after striking a $1.4 million settlement in January 2022. The CFTC ruled that Polymarket’s event markets were swaps under the Commodity Exchange Act, products that Polymarket wasn’t registered to offer to U.S. customers.
Just last week, Bloomberg broke the news that the CFTC and the U.S. Department of Justice (DoJ) had concluded probes into whether Polymarket had resumed taking bets from U.S. customers in violation of its 2022 settlement. The probes were launched last year and resulted in a raid on CEO Coplan’s home and the seizure of his phone.
Following last week’s report, Coplan tweeted that “[a]fter cooperating and engaging, we’ve been cleared of any wrongdoing. Justice prevailed.” Coplan said he was “happy to announce that this chapter of the story is over.”
Polymarket’s U.S.-licensed rival Kalshi won its own fight against the CFTC last year when a federal appeals court upheld a lower court ruling that Kalshi’s prediction markets didn’t contravene U.S. gambling laws. Since that ruling, Kalshi has added the president’s son Don Jr. as a ‘strategic advisor.’
Among Kalshi’s previous directors was Brian Quintenz, Trump’s nominee to lead the CFTC. On Monday, the Senate Agriculture Committee (which oversees the CFTC) was supposed to hold a hearing that would finally send Quintenz’s nomination to the Senate floor for a vote. However, the hearing was called off at the last second when one of the GOP committee members was stuck out of town.
WLFI unleashed
Meanwhile, Trump’s personal crypto ventures continue to expand. On July 18, the Trump-linked decentralized finance (DeFi) project World Liberty Financial (WLF) announced that the WLF ‘community’ had voted 99.94% in favor of a proposal to make WLF’s governance token WLFI tradable on the open market.
WLF said it’s “targeting 6-8 weeks for the full awakening—strategic alignments (alliances, grand stages, smart unlocks) take time to realize full potential.” The cryptic post also promoted “powerhouse deals,” “epic listings on major platforms,” and other “new paths … for those who missed out” on the original WLFI sale process.
On July 19, WLF tweeted further details, including an effort to “dispel the rumors: NO co-founders, team, or advisor tokens will unlock upon launch … Only a portion of tokens purchased from the public sale that were bought at $0.015 and $0.05 will unlock initially … plus treasury tokens purely to seed liquidity.” The community would vote “on the schedule to unlock the remainder of the tokens.”
WLF claimed it was “NOT opening another pre-sale round” but would be “partnering with major exchanges to create a $WLFI reward program.” There will also be “DeFi options for those who prefer decentralized vibes.” Further details have been promised in due course for those who found these instructions clear as mud.
A Trump-controlled entity was initially granted control of 22.5 million WLFI tokens, a significant chunk of the total 100 billion available. In June, Trump revealed that he’d earned $57.4 million from WLF last year and still held 15.75 billion WLFI as of December 31.
Meanwhile, Trump Media & Technology Group (TMTG) (NASDAQ: DJT) filed papers with the Securities and Exchange Commission (SEC) on Monday, indicating that it has acquired “approximately $2 billion worth of bitcoin and bitcoin-related securities as part of its previously announced bitcoin treasury strategy.” Another $300 million has been “allocated to an options acquisition strategy for bitcoin-related securities.”
TMTG announced plans to raise $2.5 billion in May to fund its treasury ambitions. TMTG has also filed to launch three crypto-focused exchange-traded funds (ETFs) and recently confirmed plans for a new ‘utility token’ as part of its new ‘Patriot Package’ subscription TV streaming package of ‘non-woke’ programming.
The $2 billion buy announcement was enough to rank TMTG fifth on the list of corporate BTC treasuries. TMTG’s shares rose 3.1% on Monday to close at $19.25, although that’s well off its early-2025 peak of over $43.
Aquaman’s identity still unclear
The Aqua1 Foundation, the mysterious entity that claimed to have bought $100 million worth of WLFI earlier this month, has pushed back on reports that it’s led by David Li, a senior project manager at Hong Kong market-maker Web3Port.
The Nation initially called into question Aqua1’s claims of being a UAE-based ‘Web3-native fund,’ while Reuters confirmed that Abu Dhabi’s financial center has no registration record for any company by that name. Jacob Silverman then flagged Li as Aqua1’s purported co-founder, Dave Lee.
On July 15, Aqua1’s X account tweeted acknowledgment of the media speculation, but claimed “Aqua1 operates independently and has no equity, financial, or operational ties to any unrelated entity.” While claiming to be “committed to transparency” Aqua1 claimed “certain details … cannot yet be publicly disclosed.”
The X account of ‘Dave Lee’ then tweeted his own relief at seeing “the facts laid out clearly.” Like Aqua1, Lee claimed that Aqua1 had “no equity, financial, or operational ties to any unrelated entity.” Both accounts also issued threats of “legal action” to protect what Aqua1 called “the reputation and interests of Aqua1 and its team.”
Neither tweet offered much in the way of specifics to answer the questions raised in the articles, leading Silverman to tweet that he saw no reason to change the conclusions he’d drawn.
Other X accounts began flagging aspects of Web3Port’s history that Aqua1 would likely find reputationally harmful, including allegations of market manipulation involving MOVE tokens. MOVE is a project with which WLF has some experience, and Web3Port tweeted in January that it had made a $10 million investment in WLF.
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