There is growing concern about the impact of Europe’s upcoming cryptocurrency regulation legislation. Despite being a significant step forward for the industry, the European framework poses significant banking risks for stablecoin issuers, Tether CEO Paolo Ardoino told Cointelegraph.
In the broader cryptocurrency space, Vitalik Buterin outlined his plans to reduce Ethereum’s data bloat and simplify the overall protocol as part of an initiative called “The Purge,” which aims to create more efficiencies in the world’s second-largest blockchain network. I did it.
EU MiCA regulation poses “systemic” banking risks to stablecoins — Tether CEO
According to Paulo Ardoino, Europe’s upcoming regulatory framework will raise banking concerns for stablecoin issuers that could threaten the stability of the broader cryptocurrency space.
The Markets in Cryptocurrency Assets Regulations (MiCA) is the first comprehensive regulatory framework for the cryptocurrency industry and is scheduled to come into full effect on December 30. Under MiCA, stablecoin issuers must hold at least 60% of their assets in reserve. From a European bank.
According to Ardoino, CEO of Tether, the world’s largest stablecoin issuer of USDt (USDT), which recently surpassed $120 billion, this poses a “systemic risk” to stablecoin issuers, given that banks can lend up to 90% of their reserves. “It is said that it can cause. In market capitalization.
Ardoino shared his concerns with Cointelegraph in an interview at Plan B Lugano in Switzerland.
“If you’re managing €10 billion, you need €6 billion in cash. This corresponds to 60% of 10 billion euros. We know that banks can lend 90% of their balance sheets. So, out of the 6 billion euros, 5.4 billion euros are lent to people. (…) 600 million euros will remain on the banks’ balance sheets.”
Tether’s Paolo Ardoino, interview with Cointelegraph’s Zoltan Vardai, clip 1. Source: youtube
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“Purge” — Vitalik’s plan to reduce Ethereum’s inflation
Ethereum co-founder Vitalik Buterin published “The Purge,” the fifth part of a blog series on the future path of blockchain networks that aims to reduce data bloat and simplify Ethereum’s protocols.
Fuzz focuses on reducing unnecessary data storage and eliminating outdated features to make Ethereum more efficient while maintaining the “permanence” of the blockchain.
The purge is not set to have a direct impact on Ethereum’s gas costs. However, the proposed changes could improve network performance and reduce operating costs.
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Radiant Capital’s $58M Hack Costly “Lessons Learned” for DeFi
Radiant Capital has reopened its Ethereum lending market following a hack that cost the company approximately $58 million in digital assets.
On November 1, Lending Protocol said it had implemented improvements, including transferring ownership to a time-lock contract. The Radiant Capital team said this increases Radiant’s security by imposing a mandatory 72-hour waiting period for all adjustments.
The team also implemented the Emergency Manager role using a multi-signature structure. This role is responsible for pausing and unpausing markets in the lending protocol as needed.
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Cryptocurrency surge in Eastern Europe: DeFi drives 33% of transactions.
According to Chainalytic, an on-chain analytics platform, decentralized finance-related activity is increasing in Eastern Europe and cryptocurrency adoption continues to occur.
Eastern Europe received $499 billion worth of cryptocurrency between July 2023 and June 2024.
Decentralized finance (DeFi) activity accounted for a third of the region’s cryptocurrency value flows, totaling more than $165 billion, according to the October 30 Chainalytic Crypto Adoption Report.
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Solana converted Ethereum daily fees to over $2.5 million in 24 hours.
Solana has surpassed Ethereum in daily network fee generation, indicating increasing user activity on the world’s third-largest blockchain.
Solana generated $2.54 million worth of fees in 24 hours, surpassing Ethereum’s $2.07 million on October 28. According to DefiLlama data, Solana has become the fifth largest fee-generating protocol in the cryptocurrency industry.
Solana’s soaring fees are linked to increased trading activity on Raydium, a leading decentralized exchange (DEX). Raydium generated over $3.41 million in fees in 24 hours on the Solana blockchain.
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DeFi Market Overview
Most of the top 100 cryptocurrencies by market capitalization were in the red this week, according to data from Cointelegraph Markets Pro and TradingView.
Among the top 100, the Celestia (TIA) token had the biggest decline this week, down over 19%, followed by the Immutable (IMX) token, down 19% over the past week.
Total value locked in DeFi. Source: DefiLlama
Thank you for reading our roundup of this week’s most influential DeFi developments. Join us next Friday for more stories, insights and education about this dynamic and evolving space.