Headlines: The U.S. Treasury Department is considering embedding digital identity verification mechanisms in DeFi protocols. The U.S. Treasury Department has launched a public consultation under the GENIUS Act, exploring the integration of digital identity verification tools into DeFi smart contracts to combat illicit financial activity. Proposals include automating KYC/AML checks on-chain through APIs, while also employing technologies like biometrics to reduce compliance costs. Banking groups have warned that loopholes in the regulation of stablecoin interest payments could lead to an outflow of $6.6 trillion in bank deposits. The public consultation will run until October 17, 2025, after which the Treasury Department will submit a report to Congress and may introduce new regulations. Japan to Approve First Yen-Denominated Stablecoin, JPYC According to Nikkei, Japan's Financial Services Agency (FSA) will approve the issuance of the country's first yen-denominated stablecoin, JPYC, this month. The FSA will register fintech company JPYC Inc. as a remittance business, and sales are expected to begin within weeks of registration. The digital currency will be backed by liquid assets such as government bonds to maintain its value at 1JPYC = 1 yen.
Market
As of press time, according to Coingecko data:
BTC price is $117,768, up or down 0.3% in 24 hours;
ETH price is $4,507.00, up or down 1.9% in 24 hours;
BNB price is $857.48, up or down 2.5% in 24 hours;
Blockchain Applications
▌Guizhou Duyun Public Security Bureau Explores New Model for Preserving Virtual Currency Involved in Cases, Using Cold Wallets for Physically Isolating Storage
According to China News Network, the Duyun Municipal Public Security Bureau in Guizhou Province has explored a new practical model for handling the preservation of virtual currencies involved in cases. Since China strictly banned virtual currency transactions in 2021, public security organs across the country have faced technical difficulties in preserving and disposing of the virtual currencies involved in the cases. During the investigation process, Duyun police discovered that some criminal suspects converted illegally obtained proceeds into virtual currency. To address such situations, local public security organs used cold wallet technology to physically isolate and store the seized virtual currencies involved in the case, and stored them in the Duyun City Joint Management Center for Case-Related Property, awaiting the final court judgment. Hong Kong Securities and Futures Commission (SFC) Director Yip Chi-hang: Share prices of companies claiming to apply for stablecoin licenses have risen, but investors should be wary of increased fraud risks. Speaking on the TVB program "Speak Clearly," SFC Executive Director Yip Chi-hang stated that he has noticed that following the recent implementation of the Stablecoin Ordinance, some companies have claimed to have applied for, or are planning to apply for, licenses, and their share prices have risen. He noted the enthusiastic investor response and urged investors to exercise caution, citing the SFC's concerns about the increased risk of fraud. Yip Chi-hang stated that there were 265 complaints regarding virtual asset trading in the first half of this year, primarily involving overseas investors who reported financial losses. These complaints included scams, platform theft, platform failure to recognize winnings, and sudden freezing of funds due to allegations of money laundering by the trading partner. He noted that when investors trade virtual assets without using licensed platforms, they are essentially taking risks and playing "Russian roulette." In addition, he mentioned that the China Securities Regulatory Commission said it is still investigating the JPEX fraud case. Cryptocurrency ▌The total on-chain holdings of US spot Bitcoin ETFs have exceeded $153 billion. According to Dune data, the total on-chain holdings of US spot Bitcoin ETFs have exceeded 1.29 million BTC, currently reaching approximately 1.296 million BTC, accounting for 6.51% of the current BTC supply, with an on-chain holding value of $153.3 billion. Metaplanet CEO: The goal of increasing Bitcoin holdings to 30,000 this year remains unchanged. Simon Gerovich, CEO of a Japanese listed company, stated on the X platform, "Our goal of increasing Bitcoin holdings to 30,000 this year remains unchanged (current holdings are 18,113 BTC), and we will own 1% of all Bitcoin by 2027. We are currently following a clear roadmap to guide daily execution and long-term goals. Metaplanet is fully transparent, providing proof of reserves and open performance dashboard data to everyone. Trust is built on verification. Metaplanet, along with Strategy and other companies, is incentivizing hundreds of companies around the world to include Bitcoin on their balance sheets, driving growth and adoption." Michael Saylor releases Bitcoin Tracker information again, possibly disclosing increased holdings. Michael Saylor releases Bitcoin Tracker again on the X platform. Information may reveal increased holdings, he wrote: "The orange quantity is insufficient." El Salvador's current Bitcoin holdings are 6,271.18. Mempool data shows that El Salvador currently holds 6,271.18 BTC, equivalent to approximately $738 million. Experts: The United States should use tariff surpluses to fund its strategic Bitcoin reserve. According to Adam Livingston, author of "The Age of Bitcoin and the Great Harvest," the US government could purchase more Bitcoin for its strategic reserve by using part of the tariff surplus. He recommends taking a portion of the surplus generated by trade tariffs each month and converting it into secure cold storage Bitcoin. These Bitcoins will not be traded, pledged, sold, rehypothecated, used to fund projects or guarantee loans, or lent out for interest.
▌Bitwise Analyst: The increasing number of ETH to be unstaked may bring greater market selling pressure
The validator exit queue of the Ethereum blockchain reached 855,158 ETH on Friday, a record high. Bitwise senior investment strategist Juan Leon said that the increasing number of ETH to be unstaked may be the reason for the recent pullback of the asset. The unstaked Ethereum queue usually has a negative impact on the price of ETH, and may also bring greater market selling pressure in the future, because staked tokens such as stETH can be traded at a discount, and the discount will reduce the value of the collateral, thereby triggering risk reduction, hedging and even liquidation, which will eventually lead to ETH spot selling. The leveraged "stETH cycle" transactions conducted through the DeFi protocol liquidity pool will no longer be profitable. Traders also form synchronous selling pressure by closing positions and selling ETH to repay loans. Google searches for "crypto" reached a year-on-year high. Google searches for "crypto" reached a year-on-year high. What are tokenized commodities? Tokenized commodities represent fractional ownership of real-world assets using digital tokens on a blockchain, while retaining their tangible value. Tokenized commodities are digital versions of real-world items (such as gold, oil, or crops) recorded on a blockchain. Each token represents a portion or all of the commodity, making it easier to divide and trade. This simplifies the buying and selling of small portions of the commodity for investors, provides more liquidity, and offers access to markets that are typically difficult to trade. Instead of purchasing the entire commodity (which can be very expensive and impractical), you divide it into smaller pieces called tokens. Each token represents a small portion of the commodity. Blockchain technology can help tokenize a variety of commodities, including energy resources, real estate, precious metals, and agricultural products. Commodity-backed cryptocurrencies are digital assets designed to be more stable than volatile cryptocurrencies. This stability is achieved by tying their value to tangible commodities such as real estate, gold, or oil. Commodity tokenization clarifies ownership, enables fractional ownership, simplifies transactions, and facilitates market activity. While promising, tokenized commodities also face challenges. Regulations are not always clear, and existing rules may not fully cover them. The technology behind tokenized commodities must be properly tested to handle the complexities of creating and trading these tokens.
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