Regulatory action against the Binance USD (BUSD) stablecoin and its issuer Paxos was specific to BUSD and cannot be extrapolated to others such as USD coin (USDC), Bernstein said in a research report Thursday.
Some in the industry had expressed concern that crypto was “actively being de-ramped from the banking system, with an attack on stablecoins and custody rules,” the report said.
The custody rule change is currently a proposal, and is favorable for bank-custodians and thus positive for crypto custodians such as Anchorage Digital, which have bank charters, and also custodians that operate under state charters, analysts Gautam Chhugani and Manas Agrawal wrote.
“While the U.S. regulations seem to be getting harder, the regulatory murmurs from Hong Kong seem to be net positive, with expected easing of norms,” the report said. It added that “we would not be surprised if the crypto market is led by Asia to begin with, until the regulatory fears settle down in the U.S.”
In recent months, bearish crypto investors have been ignoring very healthy user trends on-chain. The collapse of crypto exchange FTX triggered a spike in on-chain self-custody wallets willing to use on-chain exchanges, according to the note.
“Layer 2 ecosystems have been vibrant, with cheap transaction cost driving adoption and new app deployments,” Bernstein said.
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