Tokenization spikes and SEC delays Bitcoin ETF options

The tokenization of United States Treasuries on public blockchains has exceeded $1 billion, a milestone reached on March 28. The assets are spread across 17 different products, with the majority being based on the Ethereum, Polygon, and Stellar networks. This growth in tokenized treasuries is attributed to an increasing number of asset issuers recognizing the benefits of blockchain technology. Franklin Templeton, an investment firm, is one of the companies tokenizing assets, with over $360.1 million in assets and a 33.6% market share through its Franklin OnChain U.S. Government Money Fund. The use of blockchain in this capacity is expected to continue growing exponentially in the coming years.

In other news, the U.S. Securities and Exchange Commission (SEC) has delayed its decision on allowing options trading on spot Bitcoin exchange-traded funds (ETFs). This delay affects the Bitwise Bitcoin ETF, the Grayscale Bitcoin Trust, and any other trusts holding Bitcoin on the New York Stock Exchange. The SEC had previously reached the same decision for Nasdaq in March. The next deadline for the SEC to make a ruling on the proposed rule change for the NYSE is May 29.

The circulation of the stablecoin PayPal USD (PYUSD), issued by PayPal and Paxos, decreased by 39% in March, totaling $188.5 million. This decline follows months of higher circulation, with $304 million in February and $301 million in January. PYUSD had experienced rapid growth early in 2024 but has since seen a decrease in circulation and market capitalization.

SushiSwap, a decentralized exchange, has received support to adopt a less decentralized “Labs model.” Over 62% of voters approved the transition in a preliminary vote. Under the new plan, Sushi Labs would be responsible for managing the operational aspects of the Sushi ecosystem. Tokenholders would still have a say in treasury allocations but would not participate in operational decisions. SushiSwap would also receive 25 million Sushi tokens, worth approximately $39 million, and future airdrops from affiliated protocols and partners.

Paradigm, a crypto-focused venture capital firm, has led a $225 million funding round for Monad Labs, a new layer-1 blockchain network aiming to compete with Solana and other established networks. Monad Labs aims to build a smart contract network that is faster and more cost-effective than Ethereum, with compatibility with the Ethereum Virtual Machine and a capacity of up to 10,000 transactions per second. This funding round marks a positive turn for crypto VC funding, which had experienced a slump for the past two years. The introduction of smart contracts that can be controlled by a multisig mechanism or governance vote may pose potential issues.