Coin Market

Gov’t can realize gains on gold certificates to buy Bitcoin: Bo Hines

Published

1 week ago

March 21, 2025

The Trump administration appears poised to grow its Strategic Bitcoin Reserve after the White House’s crypto council head suggested budget-neutral ways for acquiring the digital asset.

“There’s been countless ideas” about how the government can acquire more Bitcoin (BTC), Bo Hines, executive director of the President’s Council of Advisers on Digital Assets, said in an interview with the Crypto in America podcast.

Bo Hines said the crypto council is open to creative ways to build the government’s Strategic Bitcoin Reserve. Source: Eleanor Terrett

Perhaps the best way of doing so would be to realize the gains on the government’s gold certificates, which are priced far less than bullion is actually worth today.

“I’ll actually point you to Senator [Cynthia] Lummis’ Bitcoin Act of 2025, in which she believes that we can identify the real true value of some of these gold certificates,” Hines said.

“If we actually realize the gains on [these holdings], that would be a budget-neutral way to acquire more Bitcoin,” he said.

As the Federal Reserve Bank of St. Louis explains, all gold certificates held at Fed banks are “computed at a statutory price of $42.22 per troy ounce.” By comparison, spot gold is currently valued at more than $3,000 an ounce.

The spot gold price has rallied 40% over the past year. Source: Kitco

Senator Cynthia Lummis’ proposed BITCOIN Act of 2025 lists “Federal Reserve System gold certificates” as one source of funding for Bitcoin purchases.

The bill requires that Fed banks “tender all outstanding gold certificates in their custody to the Treasury Secretary” so that the secretary can issue new certificates “that reflect the fair market value price of the gold held against such certificates by the Treasury.”

Hines said he’s open to any ideas about how to grow the reserve, so long as it “doesn’t cost the taxpayer a dime.” That’s the crux of budget-neutral strategies for acquiring Bitcoin laid out in President Donald Trump’s March 6 executive order.

“With all the inter-agency working group actors that will convene in these meetings, I mean, we’re going to hear some tremendous ideas about how we can do it. I just don’t want to box us in yet to what that actually looks like because I want to be able to hear from everybody.”

The US government currently holds roughly 207,000 BTC seized in criminal and civil proceedings. By default, this makes America the largest known Bitcoin holder among nation-states.

Bitcoin holdings by nation-state. Source: Bitbo

Bitcoin’s special status

During the interview, Hines reiterated Bitcoin’s special status, suggesting that the White House crypto council was treating the strategic reserve and digital asset stockpile very differently.

“The reason we structured the [Strategic Bitcoin Reserve] the way we did is because Bitcoin is different. It’s unique; it’s a commodity, not a security,” said Hines, adding:

“David [Sacks] likes to say it has the immaculate conception, meaning there’s no issuer. It has intrinsic stored value, and it’s traditionally accepted store of value as well. We wanted to make that distinction [between stockpile and reserve].”

The White House rushed to defend Bitcoin’s special status shortly after President Trump announced plans for a digital asset stockpile, which included a smattering of large-cap altcoins. Even Commerce Secretary Howard Lutnick clarified that Bitcoin would be treated differently from the rest of the altcoins listed.

Trump, pictured alongside White House crypto czar David Sacks and Bo Hines, signs an executive order establishing the Bitcoin Strategic Reserve. Source: David Sacks

In addition to its Bitcoin acquisition targets, the Trump administration is making significant headway on cryptocurrency legislation through bipartisan cooperation.

According to Representative Ro Khanna, a California Democrat, Congress should be able to pass a stablecoin bill and crypto market structure bill this year.

Speaking at the Digital Asset Summit in New York, Ro Khanna (right) said there are between 70 and 80 Democrat lawmakers who now understand the importance of stablecoin legislation. Source: Cointelegraph

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

Coin Market

Sonic Labs ditch algorithmic USD stablecoin for UAE dirham alternative

Published

2 hours ago

March 29, 2025

Sonic Labs has canceled plans to launch a US dollar-pegged algorithmic stablecoin, opting instead to develop a United Arab Emirates dirham-denominated alternative.

On March 22, Sonic Labs co-founder Andre Cronje said the company was working on a US dollar-pegged algorithmic stablecoin with an annual percentage rate (APR) of up to 23%, Cointelegraph reported.

However, one week later, the firm reversed course.

“We will no longer be releasing a USD based algorithmic stable coin,” Cronje said in a March 28 X post. “Completely unrelated, we will be releasing a mathematically bound numerical Dirham which is settled and denominated in USD, which is definitely not a USD based algorithmic stable coin.”

The shift in strategy comes shortly after the UAE announced it would launch its digital dirham central bank digital currency (CBDC) in the fourth quarter of 2025.

Source: Andre Cronje

Khaled Mohamed Balama, governor of the Central Bank of the UAE, said the blockchain-based dirham could enhance financial stability and help combat financial crime. The digital currency will be accepted alongside its physical counterpart in all payment channels, according to a report from the Khaleej Times.

Sonic faced criticism over stablecoin plans

The reversal follows widespread criticism of Sonic’s original plan to launch an algorithmic stablecoin — a model that has raised concerns across the crypto industry since the collapse of the Terra ecosystem in 2022.

Cronje himself previously admitted to experiencing Post-traumatic stress disorder (PTSD) related to algorithmic stablecoin due to previous cycles:

“Pretty sure our team cracked algo stable coins today, but previous cycle gave me so much PTSD not sure if we should implement.”

In May 2022, the $40 billion Terra ecosystem collapsed, erasing tens of billions of dollars of value in a matter of days. Terra’s algorithmic stablecoin, TerraUSD (UST), had been yielding an over 20% annual percentage yield (APY) on Anchor Protocol prior to its collapse.

As UST lost its dollar peg, crashing to a low of around $0.30, Terraform Labs co-founder Do Kwon took to X (then Twitter) to share his rescue plan. At the same time, the value of sister token LUNA — once a top 10 crypto project by market capitalization — plunged over 98% to $0.84. LUNA was trading north of $120 in early April 2022.

The collapse of the algorithmic stablecoin issuer created shockwaves among both crypto investors and lawmakers.

To reduce systemic risk, the European Union’s Markets in Crypto-Assets Regulation (MiCA) bill will prohibit algorithmic stablecoins to avoid another Terra-like failure.

Meanwhile, stablecoins are increasingly being used for smaller, everyday payments rather than large transfers, according to CoinFund managing partner David Pakman.

“We’ve seen a significant decrease in the size of each stablecoin transaction, which points to the fact that they are being used more as payments and less for large transfers,” Pakman said during Cointelegraph’s Chainreaction live show on X on March 27.

Magazine: Ripple says SEC lawsuit ‘over,’ Trump at DAS, and more: Hodler’s Digest, March 16 – 22

Coin Market

$1T stablecoin supply could drive next crypto rally — CoinFund’s Pakman

Published

4 hours ago

March 29, 2025

The global stablecoin supply could surge to $1 trillion by the end of 2025, potentially becoming a key catalyst for broader cryptocurrency market growth, according to CoinFund managing partner David Pakman.

“We’re in a stablecoin adoption upswell that’s likely to increase dramatically this year,” Pakman said during Cointelegraph’s Chainreaction live show on X on March 27. “We could go from $225 billion stablecoins to $1 trillion just this calendar year.”

He noted that such growth, while modest compared to global financial markets, would represent a “meaningfully significant” shift for blockchain-based finance.

Pakman also suggested that the rise in capital flowing onchain, combined with growing interest in exchange-traded funds (ETFs), could further support decentralized finance (DeFi) activity:

“If we have a moment this year where ETFs are permitted to provide staking rewards or yield to holders, that unlocks really meaningful uplift in DeFi activity, broadly defined.”

https://t.co/v9lOnk00QY

— Cointelegraph (@Cointelegraph) March 27, 2025

The aggregate stablecoin supply stood at an all-time high of above $208 billion across the five largest stablecoins on March 28, according to Glassnode data.

Stablecoins, aggregate supplies. Source: Glassnode

“This is the major catalyst that’s been missing for over a decade: a major movement of people’s wealth onchain that brings everyone else on,” added Pakman.

The growing stablecoin supply recently surpassed $219 billion and continues to rise, suggesting that the market is “likely still mid-cycle” as opposed to the top of the bull run, according to IntoTheBlock analysts.

Stablecoin payment adoption on the rise

Stablecoins use for daily payments is on the rise, illustrating the efficacy of blockchain-based transactions.

“We’re up over 22x in stablecoin volume since 2021,” Pakman said, adding:

“We’ve seen a significant decrease in the size of each stablecoin transaction, which points to the fact that they are being used more as payments and less for large transfers.”

BTC-to-stablecoin ratio. Source: Ki Young Ju

That aligns with recent comments from CryptoQuant founder and CEO Ki Young Ju, who said stablecoins are increasingly being used for remittance payments and as a store of value. However, Ju said stablecoin supply won’t pump Bitcoin’s (BTC) price without additional catalysts.

Magazine: Bitcoin $500K prediction, spot Ether ETF ‘staking issue’— Thomas Fahrer, X Hall of Flame

Coin Market

NAYG lawsuit against Galaxy was ‘lawfare, pure and simple' — Scaramucci

Published

5 hours ago

March 29, 2025

The New York State Attorney General’s (NAYG) recent legal action against Galaxy Digital over its promotional ties to the now-collapsed cryptocurrency Terra (LUNA) was unfair and an abuse of the legal system, says SkyBridge Capital and founder Anthony Scaramucci.

“It’s LAWFARE, pure and simple due to an obscure but dangerously powerful New York law known as the Martin Act,” Scaramucci said in a March 28 X post.

Martin Law can “open the door for abuse”

“The law has no need to prove intent, creating a low standard of proof that can open the door for abuse like this. It shouldn’t exist,” he said.

New York’s Martin Act is one of the US’s strictest anti-fraud and securities laws, allowing prosecutors the power to pursue financial fraud cases without needing to prove intent. The NAYG alleged that Galaxy Digital violated the Martin Act over its alleged promotion of Terra, with Galaxy Digital agreeing to a $200 million settlement.

According to NAYG documents filed on March 24, Galaxy Digital acquired 18.5 million LUNA tokens at a 30% discount in October 2020, then promoted them before selling them without abiding by disclosure rules.

Scaramucci reiterated that Galaxy CEO Michael Novogratz was under the impression everything he was saying about Luna was true, as he had been deceived by Terraform Labs and its former CEO, Do Kwon.

Source: Amanda Fischer

Meanwhile, MoonPay president of enterprise, Keith Grossman, said he had never heard of the Martin Act and had to look it up using AI chatbot ChatGPT.

“It is so broad and essentially is the essence of lawfare,” Grossman said. “Sorry you got caught in the crosshairs of it, Mike,” he added.

The filing alleged that Galaxy helped a “little-known” token, referring to LUNA, increase its market price from $0.31 in October 2020 to $119.18 in April 2022 while “profiting in the hundreds of millions of dollars.”

Asset manager and investor Anthony Pompliano said he isn’t familiar with the details of the lawsuit but vouched for Novogratz, calling him a “good man” who has devoted a lot of time and money to helping others.

The Terra collapse is one of the crypto industry’s most infamous failures. In March 2024, SEC attorney Devon Staren said in the US District Court for the Southern District of New York that Terra was a “house of cards” that collapsed for investors in 2022.

Magazine: Arbitrum co-founder skeptical of move to based and native rollups: Steven Goldfeder