SS #20 - SEC Opens Door for Stablecoins as 'Cash Equivalents'

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Welcome to our 20th edition of the StableScope. A new 2x a week, stablecoin-focused newsletter from Launchy. Given the growth of the vertical, there's an increasing demand for more recurring reporting and curation on stablecoins.

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In Today's Edition:

• Headline: SEC Opens Door for Stablecoins as 'Cash Equivalents'

• Quick Bites: KakaoBank Signals Entry into South Korea’s Stablecoin

• Yield of the Week: 149.35% APY in USDE on Euler

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HEADLINE

SEC Opens Door for Stablecoins as 'Cash Equivalents'

State of play: The SEC has issued new guidance that could allow U.S. dollar-pegged stablecoins to be treated as cash equivalents, provided they meet specific criteria.

• The guidance opens the door for certain U.S. dollar-pegged stablecoins to be classified similarly to cash, a significant step toward broader institutional adoption.

• This classification is not automatic. Stablecoins must have a guaranteed redemption mechanism and a stable value tied to another asset class to qualify.

• This guidance is one piece of a broader effort by Chair Paul Atkins, known as "Project Crypto," which aims to modernize securities regulations and bring financial markets on-chain.

What’s Next: Financial institutions are now more likely to integrate qualifying stablecoins. This will spur innovation as issuers design products to meet the new criteria, leading to a more structured and clear market.

Why it Matters: This news reduces regulatory uncertainty, making it easier for institutions to adopt and trust stablecoins. The framework could position the U.S. as a leader in digital asset regulation and accelerate the convergence of traditional finance and crypto.

Our Take: The SEC's guidance is a positive step. The main opportunity lies in building transparent, compliant protocols, but the ultimate challenge will be in the details of the SEC's enforcement.

QUICK BITES

• KakaoBank signals entry into South Korea’s stablecoin.

• Slash debuts stablecoin with Stripe's Bridge for global business payments.

• World Liberty Financial plans loyalty points program for USD1 stablecoin users.

YIELD OF THE WEEK

Gearbox USDC v3: 16.75% APY

• Gearbox offers depositors a passive APY on their assets with no risk of liquidation. The deposited capital is then used by borrowers for leveraged activities such as farming and margin trading.

• The lending pool is curated by Invariant Group to ensure quality and safety. In addition to the interest earned from borrowers, depositors receive multiple rewards, including USDC, USDf, and GEAR tokens.

• The protocol's architecture allows borrowers to use the pooled capital for various strategies across different DeFi protocols, while lenders maintain a single-asset position with passive yield and without liquidation risk.

Gearbox Falcon sUSDf Farm: 11.68% - 38.46% APR

• Gearbox allows users to farm sUSDf by depositing a variety of assets, including stablecoins, LP tokens, and other related assets. Users can also choose their leverage, ranging from 1x to 10x, to suit their risk tolerance.

• Both the farming pool itself and the USDC borrowed to enable leverage are curated by Invariant Group. This curation is designed to manage the pool's assets and ensure the integrity of the protocol.

• The displayed APY is a net figure, representing the total return on the user's capital after all borrowing fees for the leveraged position have been paid.

Euler USDE / RLUSD on Euler Yield: 24.82% - 149.35% in USDE

• Euler enables leveraging USDE as collateral, borrowing RLUSD up to 8.31x to maximize yield.

• With a max LTV of 88%, the liquidity in this pool is up to $15.95M.

• Users can either borrow RLUSD against USDE collateral or utilize leverage to long USDE and short RLUSD.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.