TechFlow news, according to a research report released Tuesday by investment bank Berenberg, stablecoins and decentralized finance (DeFi) could become the next targets for the U.S. Securities and Exchange Commission (SEC) in its crackdown on the cryptocurrency industry.
The investment bank said the SEC may now focus on bringing stablecoins—including the largest by market cap, USDT and USDC—and decentralized finance protocols into regulatory compliance.
If the SEC seeks to reduce the viability of unregulated DeFi protocols as alternatives to regulated lenders and exchanges, they might "target stablecoins, which serve as the lifeline of decentralized finance."
Berenberg noted that if U.S. regulators target USDC, the revenue impact on Coinbase could be significant, pointing out that in the first quarter of 2023, the exchange earned $199 million in net income from USDC reserves, accounting for approximately 27% of its total revenue.
The report also stated that the SEC has acknowledged Bitcoin as a commodity rather than an unregistered security, potentially making it the ultimate beneficiary of this regulatory crackdown, as tightening regulations could lead the U.S. crypto industry to focus more heavily on Bitcoin.
