Crypto Biz: Crypto’s biggest business is starting to look a lot like banking
Crypto business is converging with banking as stablecoin reserves, tokenized funds, Treasury income and balance sheet management become key profit drivers.
Crypto's biggest business is increasingly aligning with traditional banking practices, according to recent developments in the digital asset industry. Major players such as BlackRock, Tether, and Bitcoin miners are integrating stablecoin reserves, tokenized funds, Treasury income, and balance sheet management into their operations, mirroring trends seen on Wall Street.
BlackRock has launched tokenized money market funds for stablecoin reserves and introduced a new institutional money market vehicle built for digital asset markets. These products support multiple blockchains and automatically reinvest income, making them suitable for stablecoin reserve management. Additionally, BlackRock's BUIDL fund expands its presence in the tokenized Treasury market, a growing sector following the GENIUS Act's federal framework for payment stablecoins.
Tether generated a significant $1.5 billion net operating profit in the second quarter, primarily from interest earned on its US Treasury holdings and repurchase agreements. The company maintains a reserve buffer of $4.11 billion, far exceeding its liabilities, which contributed to its robust earnings despite a broader stablecoin market contraction and a weaker stablecoin market.
Bitcoin (BTC) mining, traditionally defined by production costs, profitability, and balance sheet management, remains a key focus for miners. The industry's business model is converging with conventional finance, with production costs, profitability, and balance sheet management becoming primary considerations, rather than the volatile price of Bitcoin.
While some stablecoin-backed assets like tokenized gold have shown resilience, adoption in decentralized finance (DeFi) remains limited. DeFi lending adoption has surged, but tokenized gold's use as collateral on platforms like Aave v3 and Morpho is still minimal, accounting for only 1.5% of its combined $4.2 billion market cap. The resilience of tokenized gold is evident, but it faces infrastructure challenges as it scales and integrates into the broader financial ecosystem.
Written by urgent.news from Cointelegraph's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
