America’s Shift Toward Pro-Crypto Policies
The United States is witnessing a notable bipartisan shift towards pro-cryptocurrency policies, as both Democrats and Republicans aim to bolster the US dollar’s status as a global reserve currency. California Democrat and US Representative Ro Khanna has indicated that a significant number of his colleagues—over 70—now recognize the necessity of regulating stablecoins. He anticipates that there will be sensible legislation regarding crypto market structures and stablecoins introduced this year. Typically, such announcements would trigger a surge in cryptocurrency prices; however, current concerns over a potential recession, fueled by former President Donald Trump’s trade policies, have dampened market reactions.
Concerns About a Potential Recession
Cathie Wood, CEO of ARK Invest, has joined the chorus of crypto industry leaders warning about the looming threat of a recession. While recessions generally bring adverse effects, Wood suggests that this economic downturn might provide both Trump and the Federal Reserve with the flexibility to implement growth-oriented policies. “We are worried about a recession,” Wood stated, highlighting that while US Treasury Secretary Scott Bessent may not share these concerns, she believes the White House might be underestimating the risks associated with Trump’s recent tariff strategies. Wood expressed her apprehension, saying, “We think the velocity of money is slowing down dramatically.” A decline in the velocity of money typically indicates that consumers and businesses are spending less, a sign that can precede a recession.
Impact of Economic Slowdown on Crypto
Despite these challenging economic conditions, Wood posits that a recession could inadvertently benefit risk assets such as cryptocurrencies. She outlined that a contracting Gross Domestic Product (GDP) might provide the president and the Federal Reserve with greater latitude to enact favorable tax and monetary policies, potentially benefiting the crypto sector.
Imminent US Stablecoin Legislation
According to Bo Hines, the newly appointed executive director of Trump’s Presidential Council of Advisers on Digital Assets, comprehensive legislation concerning stablecoins could be introduced within the next two months. During the Digital Asset Summit in New York, Hines praised the bipartisan support shown by the Senate Banking Committee for the Guiding and Establishing National Innovation for US Stablecoins Act, commonly referred to as the GENIUS Act. He noted the significance of this collaborative effort, stating, “I think our colleagues on the other side of the aisle also recognize the importance for US dominance in this space, and they’re willing to work with us here, and that’s what’s really exciting about this.” The GENIUS Act aims to set clear standards for stablecoin issuers, including requirements for collateralization and adherence to Anti-Money Laundering regulations.
Launch of DeFi-Focused Blockchain
Ethena Labs and Securitize have announced the launch of a new blockchain aimed at enhancing both retail and institutional engagement with decentralized finance (DeFi) products and tokenized assets. Named Converge, this blockchain utilizes the Ethereum Virtual Machine and will provide retail investors with access to conventional DeFi applications while also offering institutional-grade services to connect traditional finance with decentralized platforms. Users will have the option to stake Ethena’s native governance token, ENA. Additionally, Converge will utilize Securitize’s Real World Asset (RWA) infrastructure, which has previously facilitated the minting of nearly $2 billion in tokenized RWAs across multiple blockchains.
Canary Capital Files for Sui ETF
Canary Capital has recently filed a Form S-1 with the US Securities and Exchange Commission (SEC) to introduce an exchange-traded fund (ETF) linked to Sui (SUI), the token associated with a layer-1 blockchain that facilitates staking and fee transactions. This March 17 filing highlights the competitive environment for expanding institutional access to digital assets, especially following the successful launch of spot Bitcoin (BTC) ETFs last year. To date, Canary Capital has submitted six proposals for crypto ETFs to the SEC. Sui currently ranks as the 22nd largest cryptocurrency by market capitalization, valued at approximately $7.5 billion, according to CoinGecko. Notably, the Sui blockchain has also formed a partnership with World Liberty Financial, a DeFi entity associated with the Trump family.
