Berenberg Report: SEC’s Crackdown on Stablecoins and DeFi Benefits Bitcoin

Carmen Brooke Martin July 4, 2023

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In the midst of the US Securities and Exchange Commission’s (SEC) intensified battle against cryptocurrencies the banking giant Berenberg puts emphasis on a hostile climate against the industry and suggests that Bitcoin may emerge as the ultimate winner . The SEC’s focus on stablecoins and decentralized finance (DeFi) has caught the attention of analysts with implications for major players like Tether and USD Coin (USDC) .

SEC Takes Aim at Stablecoins and DeFi

The latest report from Berenberg reveals that the SEC is not only scrutinizing the regulatory compliance of stablecoins but also targeting the DeFi sector . Tether (USDT) and USD Coin (USDC) which are the two largest stablecoins by market capitalization are among the potential targets . The SEC’s plan is to limit the potential of unregulated DeFi protocols by addressing stablecoins which are regarded as the backbone of decentralized finance and its rewards .

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Challenging Regulatory Environment Impacts Crypto Giants

Berenberg emphasizes the damaging impact of US regulation as the SEC’s actions pose a threat to prominent crypto players . Stricter regulations surrounding stablecoins particularly USDC could significantly affect Coinbase’s profits as the platform earns interest on its USDC reserves despite its relocation away from US jurisdiction .

Bitcoin as the Potential Winner

Amid the SEC’s anti-crypto war Berenberg suggests that Bitcoin could emerge as the ultimate beneficiary . The SEC has already said that Bitcoin should be classified as a commodity rather than a security in the ongoing debate over cryptocurrency categorization .

SEC’s Repression Targets Stablecoins and DeFi

Berenberg’s report implies that the SEC’s intensified crackdown on the crypto sector may include settling scores with stablecoins and DeFi . This plan is already evident in the regulator’s actions against Paxos the issuer of BUSD which is a regulated stablecoin .

As the SEC’s actions continue to echo through the crypto industry the landscape for stablecoins and DeFi remains uncertain . However Bitcoin with its recognized status and classification may emerge as a safe haven amid the regulatory turmoil .