SS #33 - EU Finance Ministers Agree on Roadmap for Digital Euro

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Good Morning.

Forget the market dip—the future of stablecoins is being decided right now. With Europe advancing its digital euro and the U.S. taking its first steps in crypto-specific legislation, a new era of regulation is clearly upon us. In Europe, finance ministers have agreed on a roadmap for the digital euro, even though its launch isn't expected until 2029. This move signals a commitment to creating a new digital currency infrastructure, albeit a long-term one.

Across the pond, the U.S. Treasury Department is seeking public comment on the recently passed GENIUS Act, the first crypto-specific legislation in the nation. With governments actively shaping the future of digital currency, it’s clear that this is a pivotal time for the stablecoin landscape. To understand what’s really happening beyond the headlines, let's dive into the top stories shaping the stablecoin narrative this week.

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In Today's Edition:

• Headline: EU Finance Ministers Agree on Roadmap for Digital Euro

• Quick Bites: Yzi Labs ‘Deepens’ Support of Ethena Labs

• Yield of the Week: 44.59% APY on Drift

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HEADLINE

EU Finance Ministers Agree on Roadmap for Digital Euro

State of play: EU finance ministers have moved closer to a common position on the digital euro, which is seen as a strategic alternative to U.S.-dominated payment systems.

• The digital euro is framed as a political statement to ensure European control over its payment infrastructure, especially for cross-border transactions.

• A compromise agreement gives EU ministers a say in the digital euro's issuance and sets limits on individual holdings to prevent potential bank runs.

• Despite recent progress, the project faces significant legislative hurdles and could take years to be fully implemented, with a potential launch not expected until 2029.

What’s Next: The legislative debate will now move to the European Parliament, where opposition from figures like Fernando Navarrete Rojas is expected to intensify. The ECB is pushing for a 2026 legislative approval to stay on track for a potential 2029 launch.

Why it Matters: This is a major step by a global economic power to create a sovereign digital currency, challenging U.S. payment rails and highlighting the clash between centralized government-backed assets and decentralized cryptocurrencies.

Our Take: The digital euro is a strategic move that is both a challenge and an opportunity for the crypto community. While it creates a state-backed competitor, it also forces the industry to innovate and demonstrate the unique value of true decentralization and privacy.

QUICK BITES

• YZi Labs 'deepens' support of Ethena Labs.

• World Liberty Financial to launch debit card very soon.

• PayPal Ventures invests in stable to expand PYUSD reach.

• Plasma blockchain to launch stablecoin-focused neobank.

• JPMorgan says U.S. stablecoin battle could be zero-sum game.

• Societe Generale selects Bullish europe to debut its USD stablecoin.

• MetaMask’s mUSD stablecoin tops $65M supply a week after launch.

• LINE and Kaia to launch stablecoin superapp for cross-border payments.

• Sky opens vote to penalize stragglers delaying MKR-to-SKY token conversion.

• Stablecoin adoption set to surge after genius act, hit $4T in cross-border volume.

• US Treasury Department seeks public comment on applying GENIUS Act stablecoin rules.

YIELD OF THE WEEK

Yearn USDC/USDT/AUSDT Katana Vault: 40.53-42.56% APR

• The Yearn USDC Katana Vault is a multi-strategy vault designed to manage risk and opportunity across various investment approaches.

• Its current investment strategies are distributed across Morpho, Steakhouse, and a single-sided LP.

• The vault's rewards will primarily be paid out in a new, soon-to-be-launched token called KAT.

IPOR Labs TAU Reservoir Pointsmax: 38.94% APY

• The vault's primary objective is to maximize participation in Reservoir Protocol's points program through an efficient looping strategy.

• It operates on the Morpho platform, where it automates a leveraged position in the srUSD/USDC.

• The vault generates multiple forms of rewards for users, including an organic USDC yield as well as additional MORPHO tokens and Reservoir points.

Drift JLP Hedge Vault: 44.59% APY

• The JLP Hedge Vault provides stable returns by dynamically hedging the Jupiter Liquidity Pool (JLP), with revenue generated from a mix of trading fees, staking rewards, and other market operations.

• The strategy is managed by PrimeNumber and utilizes AI to analyze real-time market data, predict trends, and optimize position adjustments for improved risk management and profitability.

• Users maintain full control of their funds, as the vault is non-custodial. It operates with a 20% performance fee charged monthly or upon withdrawal, with no management fee. The vault trades JLP, BTC, ETH, SOL, and stablecoins.

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