Originally published on: November 01, 2024
Europe’s upcoming regulatory bill, known as Markets in Crypto-Assets Regulation (MiCA), is causing alarm for stablecoin issuers like Tether’s CEO Paolo Ardoino. Despite being a positive step for the industry, MiCA introduces significant banking risks that could impact the stability of the broader crypto space.
Ardoino expressed concerns about the requirement for stablecoin issuers to hold 60% of reserve assets in European banks under MiCA. With banks able to loan up to 90% of their reserves, this poses potential “systemic risks” for stablecoin issuers, according to Ardoino. Tether, the issuer of the world’s largest stablecoin USDt, with over $120 billion in market capitalization, faces challenges under MiCA.
On the other hand, Vitalik Buterin, Ethereum’s co-founder, outlined a plan called “The Purge” to streamline Ethereum’s protocol and reduce data bloat. This initiative aims to enhance efficiency in the second-largest blockchain network while maintaining the blockchain’s integrity.
Meanwhile, Solana has surpassed Ethereum in daily network fee generation, reflecting increased user activity on the blockchain. The growth in Solana’s fees is attributed to heightened trading volume on its decentralized exchange, Raydium.
As DeFi activity gains momentum in Eastern Europe, showcasing the region’s growing cryptocurrency adoption, Chainalysis reported over $499 billion worth of cryptocurrency flowing through the region between July 2023 and June 2024. DeFi activity accounted for a significant portion of this value flow, totaling more than $165 billion.
Radiant Capital also resumed its Ethereum lending markets following a hack that cost $58 million in digital assets. The lending protocol implemented security enhancements, including ownership transfer to a timelock contract and the introduction of an emergency admin role using a multisignature structure.
In a volatile week for cryptocurrencies, many of the top 100 tokens experienced losses, with Celestia and Immutable being the biggest losers. Despite these fluctuations, the DeFi space continues to evolve rapidly, presenting new opportunities for investors and enthusiasts.
For more insights and updates on DeFi developments, subscribe to the Finance Redefined newsletter. Stay informed about the latest trends, analysis, and opportunities in the dynamic world of decentralized finance.
