157: The Fed is bullish

(but read this)

Marc Baumann and Sangam Bharti

Dec 13, 2025

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Hey, it’s Marc.

“Under my leadership, SEC is prioritizing innovation and embracing new technologies to enable this on-chain future.”

- That’s the Chair of the SEC, Paul Atkins, folks.

Context: While crypto world is gathering at Abu Dhabi Finance Week, Bitcoin MENA and Solana Breakpoint, one of the most significant regulatory shifts happened yesterday:

DTCC, the backbone of U.S. capital markets, just received a green light from the SEC that could eventually migrate $100 trillion of assets on-chain.

Meanwhile: The Fed has cut the interest rate on bank reserves to 3.65% and is actively expanding its balance sheet with short-term Treasuries.

In plain English? The Fed is putting more money into the banking system. Historically, this is the single strongest macro tailwind for crypto.

Here is what matters this week:

DTCC receives tokenization green light from SEC
CFTC lets banks use BTC, ETH, and USDC as collateral
State Street brings money markets to Solana
SEC is rewriting the capital markets with a new Sandbox
JPMorgan enables on-chain commercial paper using USDC

We’ll unpack all of these highlights below 👇

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Top Signals This Week

The $100 trillion green light

What happened: The U.S. Securities and Exchange Commission (SEC) issued a “No-Action Letter” to the Depository Trust & Clearing Corporation (DTCC), authorising its subsidiary to launch a service for tokenizing real-world assets. Expected in the second half of 2026. [Release] [Letter] [Platform]

Why it matters: The DTCC isn’t just another player; it is the operating system of American capital, custodying over $100 trillion in assets and processing quadrillions in annual transactions. DTCC confirmed to Bloomberg their “ultimate aspiration” is to add the entire depository.

Our view: This is one of the most important signals of the year. While the DTCC will utilize a private AppChain built on Hyperledger Besu (an Ethereum-compatible client) for privacy and compliance, their explicit goal is interoperability across the TradFi and DeFi ecosystems. This reinforces the thesis that the future financial rail is EVM-compatible, cementing Ethereum’s standard as the settlement layer for the global economy.

CFTC lets banks use BTC, ETH, and USDC as collateral

CFTC has permitted Bitcoin, Ethereum and USDC (high-quality liquid assets) to serve as margin collateral for Futures Commission Merchants (FCMs; = regulated financial intermediaries) under a pilot program. The regulator has effectively removed the rule Staff Advisory 20-34 that forced digital asset holders to sell their tokens for cash before they could hedge.

Bitnomial is the first exchange to receive approval for this model. [RELEASE]

Why it matters: The U.S. banking system still works on weekday hours, but crypto trades nonstop. The CFTC pilot narrows that gap by letting firms use stablecoins as margin, opening the door to real 24/7 collateral movement in regulated markets. Bitnomial shows how this works: collateral stays inside the clearing system and can be sold instantly, which reduces risk and speeds everything up. But it also exposes a new problem. If Bitcoin crashes on a Saturday, banks still cannot move dollars to cover losses.

Be smart: The SEC and CFTC are reviewing “Blueprint Tokenised Collateral” proposals that use tokenised T-bills and 24/7 stablecoins to fix the weekend gap.

Our view: By allowing BTC/ETH/USDC as collateral, U.S. FCMs (Futures Commission Merchants) now offer the same capital efficiency as offshore venues. This removes the extra costs and delays that previously forced people to use risky foreign platforms.

Re-Engineering of US Derivatives Markets

Marc Baumann and Sangam Bharti

Dec 10

Read full story

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State Street brings money markets to Solana

State Street Investment Management and Galaxy Digital are building a new investment product called SWEEP (State Street Galaxy Onchain Liquidity Sweep Fund). Ondo Finance will be puting $200M into SWEEP through its existing OUSG fund. It will launch on the Solana blockchain in early 2026. [RELEASE]

Why it matters: State Street ($5.12T AUM) is one of the largest custodian banks in the world. Moving from private pilots to a public blockchain like Solana signals that top-tier institutions are finally comfortable with the security and compliance of public networks. The capital size is modest, but the shift from sandbox pilots to production-grade infrastructure marks a turning point for institutional onchain adoption.

Our view: This is a clear win for both Ondo Finance and Solana. Ondo is taking the smart path by partnering with major players instead of trying to beat them, becoming the place where their products reach users. It also sets up an important test: how well State Street’s older systems can connect to Solana’s fast, modern network.

🙌 Work with us: We arm financial institutions and digital asset leaders with bespoke research, thought leadership to shape the most important conversations, scale trust, and win business.

SEC is rewriting capital markets

After a delay due to the government shutdown, SEC Chair Paul Atkins confirmed the “Innovation Exemption” launches in January 2026. This directive, part of “Project Crypto“, allows digital asset firms to launch on-chain products under a temporary “sandbox” without immediate registration.[Update]

“ICOs transcend all four topics. Three of those areas are on the CFTC side, so we’ll let them worry about that, and we’ll focus on tokenized securities.”
– Paul Atkins, SEC Chair

Why it matters: The strategic implication here is binary: digital assets are graduating from a speculative asset class to the operating system of capital markets. By establishing a clear taxonomy (distinguishing “Tokenized Securities” from “Network Tokens” and “Digital Commodities”), Atkins is unlocking the $16 trillion opportunity in Real World Assets (RWA). Today, tokenised RWAs sit at a meagre $36B. The Innovation Exemption is the regulatory unlock required to move bonds, real estate, and private equity on-chain at scale.

JPMorgan enables on-chain commercial paper using USDC

JPMorgan arranged a U.S. commercial paper issuance for Galaxy Digital on the Solana public blockchain, with Coinbase and Franklin Templeton buying the paper and proceeds paid in USDC. [RELEASE]

How it works: J.P. Morgan created the on-chain USCP token (valued at $50M) and handled delivery-versus-payment settlement; Galaxy was the issuer and structurer; Coinbase provided custody and on/off ramps; Franklin Templeton participated as a buyer.

Why it matters: It turns a proof-of-concept into an actual playbook: a global bank arranging the deal, institutional investors buying it, a public chain running the settlement, and a dollar stablecoin moving the money. By collapsing issuance, custody, and settlement into a single on-chain flow, it shows how core capital markets plumbing can be rebuilt for speed and simplicity.