SS #42 - Warren Demands Treasury Block Stablecoin 'Conflicts'

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Good morning everyone!

As the broader market sentiment remains cautious, regulatory pressure is intensifying on the stablecoin front. This week, Senator Elizabeth Warren is actively pushing the Treasury Department to leverage its authority, demanding that it close significant regulatory and conflict-of-interest gaps within the recently enacted GENIUS Stablecoin Act. A primary concern for the Senator centers on potential conflicts tied to President Trump’s connections to the crypto industry, specifically referencing the widely discussed World Liberty Financial USD stablecoin.

Despite these political headwinds, the adoption story for stablecoins continues its powerful ascent. Tether, which commands over 50% of the stablecoin market, recently announced reaching a milestone of 500 million users, underscoring the relentless growth and increasing market cap of the entire stablecoin sector.

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In Today's Edition:

• Headline: Warren Demands Treasury Block Stablecoin 'Conflicts'

• Quick Bites: Tether Hits 500M Users as Stablecoin Supply Nears $182B

• Yield of the Week: 44.53% APY on mStable

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HEADLINE

Warren Demands Treasury Block Stablecoin 'Conflicts'

State of play: Senator Elizabeth Warren is pressuring the Treasury Department to use its authority to close critical regulatory and conflict-of-interest gaps in the recently signed GENIUS Stablecoin Act.

• Sen. Warren is demanding the Treasury Department fill regulatory gaps in the GENIUS Act, citing risks to financial stability, consumers, and national security.

• A major focus of Warren's concern is the potential for conflicts of interest stemming from President Trump's ties to the crypto industry, specifically the World Liberty Financial USD stablecoin.

• The senator highlighted the recent $3T PYUSD minting "accident" by Paxos as evidence that operational failures in the stablecoin sector pose a systemic risk to the financial system.

What’s Next: Treasury will likely issue stricter guidance on operational resilience and conflict-of-interest disclosures. Expect increased regulatory scrutiny on stablecoins tied to political figures. Warren's concerns will accelerate the bipartisan effort to pass a broader, tougher crypto market structure bill.

Why it Matters: This news confirms stablecoin regulation is escalating beyond the GENIUS Act. It signals a move toward stricter, de facto regulation with higher compliance costs. It also elevates political risk for stablecoins with perceived ties to powerful figures, potentially driving market preference toward more politically neutral assets.

Our Take: Stablecoin issuers must view the GENIUS Act as a regulatory minimum and immediately focus on proactive, transparent operational and conflict-of-interest reporting. Opportunity: Exceeding these unstated standards can establish a "gold standard" for compliance.

QUICK BITES

• B2C2 launches PENNY.

• Plasma obtains VASP license.

• XDC Network acquires Contour.

• Modern Treasury acquires Beam for $40M.

• Tether hits 500M users as stablecoin supply nears $182B.

• Ethena looks to expand team as it readies two new products.

• Tether joins $39M funding round in 'programmable' Pave Bank.

• Kraken urges regulators to move faster on stablecoin and tokenization rules.

• U.S. crypto coalition warns bank data fees could cut off stablecoins and wallets.

• TRM Labs says India and US continue to lead global crypto adoption as stablecoin momentum builds.

YIELD OF THE WEEK

mStable mPT-sUSDe: 44.53% APY

• mStable offers tokenized yield products built atop established DeFi protocols (like Pendle and Aave), simplifying access to advanced strategies.

• The protocol implements strategies involving fixed yield generation via Pendle Principal Tokens (PTs), with automatic rollover and potential leverage up to 7.5x through Aave looping.

• The product features a dual fee structure: a 0.05% entry fee and a 10% fee applied to performance/profits.

Gearbox PT-sUSDai-19Mar2026: 22.77%-168.20% APY

• Gearbox offers high-leverage yield strategies, allowing users to deposit USDT0 or PT-sUSDai-19Mar2026 to loop assets up to 9.56x on the Plasma chain for maximized APY.

• Users have two distinct deposit configurations, where the conversion to Principal Tokens (PT) can be applied to either the borrowed assets alone or to both the initial deposit and the borrowed assets.

• The strategy outlines specific risk parameters, including a 7% liquidation premium and a 0.01% liquidation fee, with debt limits ranging from a $50,000 minimum to a $5,000,000 maximum.

Contango USR/USDC on Euler: 22.86%-101.05% APY

• Contango facilitates leveraged looping strategies on the Euler market, specifically for the USR/USDC pair, allowing users to amplify potential profits up to 6.55x.

• In addition to financial profits, participants in the protocol are incentivized with accrued Contango and Resolv points.

• The platform supports deposits across a wide range of asset types including BTC, ETH, stables, and other listed assets, with a framework that incorporates both flash loan mechanisms and a service fee.

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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.