Today's Crypto Developments: A Complete Roundup
Stay informed on today's cryptocurrency developments. Catch up on the latest updates affecting Bitcoin valuations, blockchain technology, decentralized finance, NFTs, Web3 innovations and digital asset regulations.
Crypto Highlights Today: During the World Economic Forum held in Davos, Circle's chief executive Jeremy Allaire pushed back against assertions that yields on stablecoins might trigger bank runs, a significant cryptocurrency legislative proposal appears set for postponement as the United States Senate turns its attention toward affordability measures, and Caroline Ellison, who previously led Alameda Research as CEO, has been freed from federal incarceration following 440 days of confinement.
Circle's CEO calls bank-run concerns over stablecoin yields "Totally absurd"
Jeremy Allaire, who serves as Circle's chief executive, refuted worries that offering interest payments on stablecoins represents a danger to traditional banking institutions.
During his Thursday appearance at the World Economic Forum taking place in Davos, Allaire characterized fears that yields on stablecoins might provoke bank runs as "totally absurd," referencing past examples and currently operating reward-oriented financial products.
"They help with stickiness, they help with customer traction," Allaire said, adding that interest itself is not large enough to undermine monetary policy.
These remarks from Allaire emerged during an intense debate surrounding yields on stablecoins, which has included conversations about the United States CLARITY Act, legislation designed to create a federal regulatory framework for digital asset markets.
Allaire referenced government-backed money market funds as a comparable historical case, observing that these funds encountered similar predictions about depleting deposits from banks.
Yet it has been "around $11 trillion of dollar money market funds that grew in various different circumstances," Allaire said, adding that this has not stopped lending.
"Meanwhile, lending is already shifting away from banks toward private credit and capital markets. In the US, much of GDP growth over multiple cycles has been funded through capital-market debt, not bank loans," he said. "We want to build models for lending that build on top of stablecoins."
Senate's focus on affordability may push crypto legislation back: Report
Legislative efforts to establish crypto market structure could face delays spanning several weeks as the Senate Banking Committee redirects its attention toward President Donald Trump's affordability priorities, according to a Wednesday report from Bloomberg.
The committee appears poised to redirect its efforts toward executing Trump's executive directive that prohibits Wall Street investment firms from purchasing single-family residential properties and postpone advancement of the cryptocurrency legislation until the later part of February or into March.
This would represent the Senate's most recent postponement of legislation intended to clarify regulatory oversight of cryptocurrency following earlier delays by the Banking and Agriculture Committees, which pushed back markup sessions to secure support across party lines.
On Wednesday, Senate Agriculture Committee Republicans unveiled their version of the legislation in advance of a markup session slated for Tuesday of the following week, though the proposal lacks endorsement from Democratic members of the panel.
Republicans are working to secure legislative victories they can campaign on during the November midterm elections, with polling data and Polymarket odds indicating Democrats hold an advantage and could potentially secure a House majority, a scenario that might obstruct Trump's legislative priorities.
Ex-Alameda Research CEO exits US custody following 440-day detention
Caroline Ellison, the former chief executive of Alameda Research, is set for discharge from federal incarceration following 440 days served of a sentence spanning two years.
Based on prisoner records maintained by the Federal Bureau of Prisons, Ellison's expected release from the Residential Reentry Management field office located in New York City is Wednesday, over twelve months following her initial reporting to the Danbury, Connecticut prison facility.
The one-time Alameda chief executive was among three executives connected to the now-defunct FTX cryptocurrency exchange who received prison sentences, alongside former FTX chief executive Sam "SBF" Bankman-Fried and Ryan Salame, who formerly served as co-CEO of FTX Digital Markets.
Following the November 2022 collapse of cryptocurrency exchange FTX amid emerging reports of insufficient liquidity, Ellison, Bankman-Fried, Salame along with executives Gary Wang and Nishad Singh faced indictments on fraud and money laundering charges. The chief executive of Alameda provided testimony against Bankman-Fried during his trial and entered into a plea agreement in exchange for her cooperation, which resulted in her receiving a two-year prison term.
Ellison's original scheduled release date was set for February, which still would have fallen significantly short of completing her full two-year sentence. Nevertheless, numerous federal prisoners qualify for reductions based on good-conduct credits. She also received authorization to transfer to a reentry facility in October, allowing her to complete her remaining months of detention in New York City.
Cointelegraph reached out to Ellison's legal team, but a representative declined to comment.