“We are not hampered””
Hey, it's Marc.
Welcome to the Monday edition of the 51 Insights digital asset newsletter.
Sibos opened in Miami on Monday, and the day's big deals had one thing in common. I think crypto went into the back office, while the front door stayed where it was.
Here's what matters in digital assets this week:
Let’s unpack. 👇
01 / MARKET INFRASTRUCTURE
Crypto moves to the back office
What's going on here?
Citi and Coinbase widened their partnership. Spring by Citi, the bank's checkout service, will let merchants accept stablecoins, with Coinbase running the rails. Citi's banking will also sit behind Coinbase's new virtual accounts. The rollout starts in the US. Separately, Citi Token Services went live in Japan and the UAE, bringing it to seven markets.
Meanwhile, Goldman is offering FTIXX, its Treasury money market fund of roughly $100 billion, through Lynq, a network used by trading firms like Wintermute and Galaxy. Eligible US clients buy through tZERO Securities.
What does this mean?
Follow the payment. Under Citi's plan, a shopper pays a merchant in stablecoins. Coinbase converts the payment to cash, and Citi settles it as the bank of record. The merchant never has to hold the token. Citi keeps the merchant. Coinbase processes the payment.
Each side can keep its own customer. The other half runs in reverse: Citi will provide the banking behind Coinbase's virtual accounts, while Coinbase stays the brand its business clients see. Goldman did something similar. BlackRock's BUIDL and Franklin's BENJI put fund shares on a blockchain. Goldman left FTIXX as it is, and Lynq did the work to reach crypto firms that park cash between trades.
Be smart. Those stablecoin balances carry a return of 3.75% a year, paid by Coinbase, the WSJ reports. Rewards like that were one of the biggest fights over the Clarity Act, which failed a key Senate vote on September 15.
In May, six bank trade groups asked the Senate to ban “interest-like payments” on stablecoins. They warned of deposit flight. One of them, the Financial Services Forum, speaks for the eight largest US banks. Citi is one of the eight.
Thirteen days after Clarity failed, Citi is the bank underneath one of those rewards.
Swift's banks are doing it too. At Sibos, Chainlink and Oracle announced ways for banks to plug into Swift's blockchain ledger, where pilot banks have run live transactions since August. In Chainlink's version, banks keep their own signing keys.
Why should I care?
My read: stablecoins are reaching big companies as a feature inside services they already use. If you sell crypto infrastructure, your road to merchants increasingly runs through their bank, and the bank keeps the relationship.
What I'm watching: Citi's launch date, and whether Swift sets a timetable at Sibos to open the ledger beyond its pilot banks.
Related Pro story: Canada's Big Six banks explore tokenized deposits
or upgrade now.
Since Friday
Friday, updated Monday · The SEC's crypto FAQs. Staff said announcing a buyback isn't a promise to keep managing a network, once that network is functional. On Monday they added a second condition: no central party. That raises the bar from the version I wrote about on Saturday.
Monday · Tether and Iran. A report from Senate Democrats calls USDT a “significant financial lifeline” for Iran’s shadow banking network. The same day, Tether said it has helped freeze about $550 million in Iran-linked USDT this year.
Full Pro story: SEC clears token buybacks and liquid staking: what changes
The week ahead
Tuesday, September 29 · Swift at Sibos. “The Swift ledger: from vision to implementation” returns with live demos. I'll look for a production date and banks beyond the first 17.
Wednesday, September 30 · UK crypto applications. The FCA opens its authorisation gateway at 7 a.m. London time, including for UK stablecoin issuers.
Friday, October 2 · Peirce's last day. Her resignation leaves the SEC with two of five commissioners, Paul Atkins and Mark Uyeda. Watch who takes over the Crypto Task Force. Comments on Regulation Crypto Assets close October 20. Watch our interview with Hester Peirce.
👉Follow all the stories on 51insights.xyz
One useful read
Vitalik Buterin: The cryptographic world computer · September 27. Buterin sets out his vision for Ethereum in 2030: proofs built into the base layer, much stronger privacy and finality in roughly 8 to 32 seconds. Useful if you are choosing between public and private chains. Free.
My question for the week: would your treasury team accept stablecoin payments if the money arrived as cash?
That’s all for now, folks.
Take care
– Marc & Team
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