Weekly Top Stories - 12/12/25
In this week’s newsletter, Lucas Tcheyan reports from the scene at Solana’s Breakpoint gathering; Alex Thorn looks at TwentyOne’s public listing in the context of backer Tether’s astounding evolution from stablecoin issuer to tech-and-finance conglomerate; and Thad Pinakiewicz explains the latest crypto-friendly move by U.S. banking regulators.
☀️ Solana’s Breakpoint Breakout
Solana’s annual conference, Breakpoint, kicked off Thursday in Abu Dhabi, drawing one of the largest gatherings of builders, founders, and investors the ecosystem has hosted to date. Over the next two days, Solana’s core developers, ecosystem teams, and investor community are expected to announce major network updates, application launches, and partnerships that define the protocol’s future direction.
Less than 24 hours into the conference, there have already been a slew of major announcements. State Street and Galaxy Digital announced the upcoming launch of a tokenized money market fund on Solana that will enable instant withdrawals using PayPal’s PYUSD, the first time a global systemically important bank (GSIB) has deployed real-world assets on Solana. Solana’s leading DEX aggregator, Jupiter, unveiled a suite of products to improve the onchain trading experience, while Ellipsis Labs announced a new perpetuals exchange that aims to make Solana a leader in the perps market again. Developers from Solana’s Agave validator client highlighted updates implemented over the past year that have enhanced the chain’s performance and outlined the priorities for the year ahead. And Coinbase announced all Solana tokens will soon be available to trade on the exchange's app.
These represent just a small sample of what is expected to be a continuous stream of announcements over the next 48 hours. For those interested in exploring any of the updates in more detail—or watching the conference in real time—you can do so here. Galaxy’s Head of DeFi, Michael Marcantonio, gave an impassioned speech on DeFi and Galaxy’s involvement on Solana (starts at the 4:06 mark).
OUR TAKE:
Major product and partnership announcements are important indications of continued traction in the Solana ecosystem, but many of the most substantive discussions that shape the network’s trajectory occurred in the days leading up to the conference during community-hosted events like Core Devs Day, MEV Day, and Block Zero (an event for Solana validators).
What is increasingly clear is that the Solana ecosystem is entering a more mature stage—one defined less by its raw technical capability (where it remains a leader) and more by the economic and structural challenges that will determine whether this blockchain can truly become the execution layer for what the community has termed Internet Capital Markets (ICM). Galaxy Research laid out this view in a recent paper, Solana’s Next Chapter: Laying the Foundation of Internet Capital Markets, and the conversations at Breakpoint have only reinforced it.
Specifically, Solana faces two critical challenges:
Addressing market microstructure issues that constrain application development and financial market activity. The focus here is to reduce the complexity for teams trying to build financial markets or improve liquidity depth on Solana. The primary example cited is giving market makers priority in cancelling orders so they can quote spreads on perpetual exchanges that are competitive with quotes found on Hyperliquid. The rise of Proprietary AMMs is the best recent example of improvements in Solana’s microstructure directly resulting in increased onchain activity. The two primary focuses for improving market microstructure at the network level are Application Controlled Execution (ACE) and Multiple Concurrent Proposers (MCP).
Maintaining Solana’s dominance across key blockchain activity metrics (such as DEX volumes and application revenues) while shifting the drivers of that activity away from memes and toward ICM. The two strongest candidates for this transition today are Solana hosting spot markets that rival or outperform CEX-grade execution, and launchpad designs like MetaDAO, which represent a new wave of launchpads focused on non-speculative asset issuance. Other leading initiatives include tokenization and payments. (Recall that Galaxy tokenized its stock on Solana).
Across the ecosystem, immense resources—both in terms of developer attention and financial capital—are being poured into achieving these objectives. But there are meaningful obstacles. Intense competition among Solana teams (most visibly Jito and Temporal) to drive adoption of their preferred market microstructure implementations could increase the complexity of operating on the chain rather than reduce it. Depending on which solution wins out, it could also threaten validator profitability by removing a portion of income from sources like MEV, creating a tension between validators who prioritize preserving short-term revenue and those pushing for designs that should improve long-term growth. And it's entirely possible that core developers at software firm Anza implement their own solution along with MCP, obviating the need for either.
There are some parallels to Ethereum in recent years, where an incessant focus on the path of infrastructure development and constantly shifting goalposts has detracted from application development and traction. This comparison is limited. Solana’s infrastructure upgrades are driven by immediate application demand, and the ecosystem continues to grow even as core components evolve. Additionally, the network’s North Star has remained constant: a single, high-performance base layer for all financial markets.
Ultimately, Solana’s primary advantage lies in its first-mover position among high-performance chains, which has allowed it to build an organic developer and user base rivaled only by Ethereum (and, to a lesser degree, CEX-distribution chains like Base and Binance Smart Chain). This remains a real moat for now, and it is palpable for anyone attending Breakpoint in the sheer size of the crowds and the energy they bring.
These two themes — the race to modernize Solana’s market microstructure and the shift from meme-driven to ICM-driven activity — are the dominant Solana narratives to watch in the year ahead and benchmarks to evaluate Solana’s success by the time the next Breakpoint rolls around. – Lucas Tcheyan
🪢 Tether’s Global Empire Grows as NYSE Lists Bitcoin DAT
TwentyOne lists on NYSE as $XXI to become the third biggest public bitcoin treasury company. Backed by Tether, Cantor Fitzgerald, and Softbank, and helmed by CEO Jack Mallers, TwentyOne plans “to build a set of Bitcoin-centric operating businesses intended to generate recurring revenue and expand institutional engagement with Bitcoin” in addition to running a “bitcoin accumulation strategy.”
According to the press release, TwentyOne is majority-owned by Tether, which itself contributed the totality of TwentyOne’s currently held 43,514 BTC. Softbank and Tether affiliate Bitfinex provided financial backing and Cantor Fitzgerald assisted by supplying a special-purpose acquisition company (SPAC, also known as a “blank check” company) and other key advisory support.
OUR TAKE:
The scale and breadth of Tether’s investments and operations are staggering. Tether is the world’s largest stablecoin issuer with more than $185 billion in circulating supply of its flagship token USDT, and it plans to create a GENIUS Act-compliant version (USAT). Tether owns agricultural and robotics concerns and operates massive bitcoin mining and high-performance computing (HPC) data centers. Tether is also the largest centralized finance (CeFi) lender in crypto, with a loan book exceeding $14 billion, according to Galaxy Research’s latest crypto leverage report. And Tether develops software, including a new AI health application (QVAC) and a private messaging application (Keet).
Tether reported paying more than $10 billion in dividends to its shareholders in the first nine months of 2025. Analysis of Tether’s U.S. Treasury bill holdings suggests a current annual interest income somewhere around $7 billion. And Tether CEO Paolo Ardoino confirmed in September that the firm was raising capital at a $500 billion valuation, which would make it one of the biggest companies in the world. And all this with possibly fewer than 200 employees.
Now it's added a major foothold in the historic New York Stock Exchange in partnership with one of the world’s biggest investors. In capitalizing TwentyOne with 43,514 BTC, Tether has onshored more than $4 billion of its wealth, something that was unthinkable just a few years ago. It’s headquartered in El Salvador, has a subsidiary headquarters in Charlotte, N.C., and investments and business interests across South America, Africa, the Middle East, Asia, and Europe.
Tether is deeply connected, wealthy, and profitable, and is diversifying away from relying solely on interest income from its Treasury holdings. This is a serious global company at the crossroads of major business trends and its latest move into the U.S. shows Tether continues to lean in. – Alex Thorn
🏦 OCC Further Normalizes Crypto by Blessing ‘Riskless’ Bank Trades
The Office of the Comptroller of the Currency dropped a meaningful update for crypto this week, confirming that U.S. banks may act as “riskless” principal intermediaries in crypto transactions. In practical terms, a bank can now buy a crypto-asset from one customer and sell it to another during the same trading day, without holding the asset on its balance sheet. Matching trades is a typical Tuesday at any brokerage in traditional markets, but banks getting explicit approval for digital asset brokering marks another step in the OCC’s ongoing effort to further integrate digital assets into traditional markets. When paired with last month’s determination that banks may hold native tokens to pay gas fees and operate directly on public blockchains, the direction of travel is unmistakable: regulators are building a coherent framework for banks to function onchain.
OUR TAKE:
The new Interpretive Letter 1188 is almost aggressively boring in the way regulatory letters usually are. The OCC essentially says that if banks are allowed to conduct riskless principal trades in securities, they may apply the same model to crypto so long as the bank does not take on material market exposure and manages settlement, operational, and compliance risks appropriately. Nevertheless, treating crypto as dull infrastructure instead of magic internet money will have a deregulatory effect and you can tell the OCC is leaning on its favorite interpretive lens: technological neutrality. Meanwhile, November's Interpretive Letter 1186 simultaneously gave banks permission to hold a small stash of native tokens to pay gas fees and to operate their own onchain systems. When you stitch the two together, you get a picture of a regulator authorizing banks to interact with blockchain networks directly and then enabling them to intermediate customer activity on those networks.
Notably, a U.S. agency is normalizing crypto faster than the global bank capital regime is. The Basel Committee’s 2024 update for banks’ crypto capital requirements still treats most crypto-assets as radioactive: high-risk exposures that receive harsh capital treatment, limited hedging recognition, and exposure caps so conservative a bank would struggle to go under from owning crypto even if it tried. Even tokenized assets and stablecoins that do qualify for milder treatment face supervisory discretion and carry an “infrastructure add-on,” penalizing assets merely for being onchain. We now have this odd bifurcation: the OCC is expanding what banks are allowed to do with crypto, while Basel is making many of those activities economically unfeasible.
From a market-structure perspective, though, this week’s guidance is unambiguously encouraging. Banks (in the U.S., at least) finally have permission to intermediate crypto flows in the way they intermediate everything else, without pretending that blockchain settlement requires a PhD in cryptography and a séance with Satoshi. Allowing banks to execute crypto trades as riskless principal gives customers access to regulated, supervised intermediaries rather than forcing them toward unregulated venues. If anything, the OCC is politely telling banks: “Look, if you want to serve crypto clients in 2026, you’re going to need wallets, node infrastructure, onchain settlement controls, and actual operational capacity.” Getting comfortable paying gas fees was Step One; being able to match customer crypto trades is Step Two; Step Three is “stop outsourcing everything to a fintech and run some of this infrastructure yourselves.”
The bigger question now is whether Basel will soften its stance. The last crypto update was in 2024, and since then, huge GSIBs have embraced crypto rails for settlement, liquidity, and tokenized collateral. Equities have been fully tokenized onchain with the same ownership protections investors have the right to demand. If banks prove they can run onchain operations safely, the Basel regime starts looking like it’s regulating crypto balance sheets as though it were still 2017: taking a set of capital rules built for a technology in the midst of growing pains, and imposing it on a sector that has taken several huge leaps forward in maturity and institutional adoption.
Basel is now revising the 2024 guidance, and hopefully will acknowledge that some crypto-assets function less like speculative gambling chips and more like payment or settlement infrastructure. Either way, the world is moving onchain; the real suspense is seeing which DeFi primitives the banks will adopt, repurpose, and present as the natural evolution of banking. – Thad Pinakiewicz
Charts of the Week
Ethereum's Fusaka network upgrade has pushed gas costs, measured in ETH, to their lowest levels since 2017. The chart below shows daily transaction fees alongside the dollar price of ETH.
As we wrote in last week’s newsletter, Fusaka increases blob capacity and raises Ethereum’s block gas limit. It also introduces Peer Data Availability Sampling (PeerDAS), which lets nodes check rollup data without downloading every byte. Together, these changes give rollups and the mainnet more room to fit transactions into each block, so users compete less for block space and the fee per transaction falls.
In effect Ethereum is choosing higher throughput and cheaper data for rollups and simple transactions, even if that compresses fee revenue per unit of activity. The bet is that more rollups, stablecoin flows, and tokenized assets will choose to settle and publish data on Ethereum when it is cheaper and more predictable, which supports Ethereum as the neutral settlement and data layer for onchain finance.
Other News
🚦DTCC Greenlighted by SEC to Offer Tokenization Service
🚀CFTC Launches Crypto Collateral Pilot, Rescinds ‘Outdated’ Delivery Guidance
🔒Circle to Launch ‘Private Stablecoin’ USDCx on Aleo Blockchain
🧐OCC’s Preliminary Review Confirms: Yes, Debanking Really Did Happen
🦅Binance Expands Trump-Linked Stablecoin USD1’s Role on Exchange
🏛️Superstate Rolls Out Direct Stock Issuance on Ethereum, Solana
🤝Stripe Acqui-Hires Valora Wallet Team as It Builds Stablecoin Services
🪙Coinbase Limits 4% USDC Rewards to Premium Subscribers, Updates x402
✅SEC Ends Biden-Era Investigation Into Ondo Finance Without Charges
The views expressed herein are the authors’ and do not necessarily represent the official views of Galaxy. The authors of this communication hold a financial interest in TwentyOne. The authors of this communication, along with Galaxy, hold a financial interests in Bitcoin, Ethereum, Solana, and Forward Industries. Galaxy regularly engages in buying and selling these assets, including hedging transactions, for its own proprietary accounts and on behalf of counterparties. Galaxy also provides services to vehicles that invest in Bitcoin, Ethereum, and Solana. If the value of such assets increases, those vehicles may benefit, and Galaxy’s service fees may increase accordingly. For more information, please refer to Galaxy’s public filings and statements. This newsletter provides links to other websites that we think might be of interest to you. Please note that when you click on one of these links, you may be moving to a provider’s website that is not associated with Galaxy. These linked sites and their providers are not controlled by us, and we are not responsible for the contents or the proper operation of any linked site. The inclusion of any link does not imply our endorsement or our adoption of the statements therein. We encourage you to read the terms of use and privacy statements of these linked sites as their policies may differ from ours. This document, and the information contained herein, has been provided to you by Galaxy Digital Inc. and its affiliates (“Galaxy”) solely for informational purposes. This document may not be reproduced or redistributed in whole or in part, in any format, without the express written approval of Galaxy. Neither the information, nor any opinion contained in this document, constitutes an offer to buy or sell, or a solicitation of an offer to buy or sell, any advisory services, securities, futures, options or other financial instruments or to participate in any advisory services or trading strategy. Nothing contained in this document constitutes investment, legal or tax advice. You should make your own investigations and evaluations of the information herein. Any decisions based on information contained in this document are the sole responsibility of the reader. Certain statements in this document reflect Galaxy’s views, estimates, opinions or predictions (which may be based on proprietary models and assumptions, including, in particular, Galaxy’s views on the current and future market for certain digital assets), and there is no guarantee that these views, estimates, opinions or predictions are currently accurate or that they will be ultimately realized. To the extent these assumptions or models are not correct or circumstances change, the actual performance may vary substantially from, and be less than, the estimates included herein. None of Galaxy nor any of its affiliates, shareholders, partners, members, directors, officers, management, employees or representatives makes any representation or warranty, express or implied, as to the accuracy or completeness of any of the information or any other information (whether communicated in written or oral form) transmitted or made available to you. Each of the aforementioned parties expressly disclaims any and all liability relating to or resulting from the use of this information. Certain information contained herein (including financial information) has been obtained from published and non-published sources. Such information has not been independently verified by Galaxy and Galaxy does not assume responsibility for the accuracy of such information. Affiliates of Galaxy’s own investments in some of the digital assets and protocols discussed in this document. Except where otherwise indicated, the information in this document is based on matters as they exist as of the date of preparation and not as of any future date, and will not be updated or otherwise revised to reflect information that subsequently becomes available, or circumstances existing or changes occurring after the date hereof. The foregoing does not constitute a “research report” as defined by FINRA Rule 2241 or a “debt research report” as defined by FINRA Rule 2242 and was not prepared by GalaxyDigital Partners LLC. For all inquiries, please email [email protected]. ©Copyright Galaxy Digital Inc. 2025. All rights reserved.