Ndax Weekly TL;DR Sept 21

Clarity Act stalls in U.S. Senate

• The U.S. Senate failed earlier this week to advance the Digital Asset Market Clarity Act after the legislation fell short of the 60 votes required to move forward. A cloture vote on the motion to proceed failed 49-50. The bill was intended to establish a broader federal framework for digital assets and clarify the roles of the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission. A motion to reconsider was entered following the vote, but its near-term path through Congress has become considerably less certain ahead of the U.S. midterm elections. (WSJ)
• Why it matters: The failed vote delays the industry’s push for a clearer crypto market-structure framework to be written into federal law. The bill’s failure does not mean U.S. regulatory development has stopped, but it does mean less certainty around what the long-term U.S. crypto legal environment will ultimately look like. Agencies like the SEC and CFTC can provide guidance and introduce new frameworks, but without legislation, parts of that regulatory approach could remain more vulnerable to changes under future administrations.

SEC opens the door to tokenized U.S. stocks

• The SEC granted a temporary, conditional five-year exemption that allows certain Tokenized Securities Venues to facilitate limited onchain trading of tokenized U.S.-listed stocks. Eligible tokens must give holders the same rights and privileges as the underlying shares, including dividends and voting rights. Issuers must also be given an opportunity to object before an unaffiliated third party’s tokenized version of their stock is made available for trading. The SEC describes the framework as an interim step while it considers longer-term rules for onchain securities trading. (CNBC)
• Why it matters: This marks a significant regulatory step toward testing traditional securities on blockchain infrastructure. The five-year window gives market participants a way to experiment with permissioned onchain trading, liquidity pools, and settlement structures under specific conditions while the SEC considers more durable rules.

XRP Ledger moves native lending closer

• XRP Ledger developers released version 3.4.0, which introduces code for a new version of the network’s proposed Lending Protocol. LendingProtocolV1_1 would introduce closed-ended vaults with defined subscription, investment, and redemption periods, as well as cash-basis accounting that recognizes interest only when borrowers make payments. (CoinDesk)
• Why it matters: The software release does not mean the new lending features are active on the XRP Ledger, as the amendments require sufficient validator support before they can activate on the network. Still, the update moves XRP Ledger closer to supporting more sophisticated credit markets directly at the protocol level. The release shows the network continuing to expand beyond payments and asset transfers into broader onchain financial infrastructure.
   

Canadian spotlight: RBC backs crypto market infrastructure

• Royal Bank of Canada participated in a strategic investment that extended crypto data provider Kaiko’s Series B financing to US$110 million. S&P Global led the round, which also included BNP Paribas and other financial and crypto-industry participants. Kaiko provides market data, analytics, and infrastructure covering more than 150 crypto exchanges and protocols. (The Block)
• Why it matters: RBC’s participation places a major Canadian bank alongside institutions investing directly in the data infrastructure supporting digital assets and tokenized markets. Kaiko also said the strategic investors will participate in an industry working group focused on data infrastructure for tokenized markets. For a major Canadian bank, the investment is another example of traditional financial institutions becoming more involved in the infrastructure behind digital-asset markets.
   

BTC Weekly Range: $112K-$119K
ETH Weekly Range: $3.6K-$3.8K

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Sept 22 - New York Fed President John Williams and Federal Reserve Vice Chair Philip Jefferson will speak in the U.S. Treasury Market Conference.
Sept 23 - September flash U.S. manufacturing and services PMI.
Sept 24 - July retail sales and employment data.
 

Bitcoin faced two significant headwinds last week, with the CLARITY Act failing to advance and the Federal Reserve raising interest rates for the first time since 2023. Bitcoin traded near a four-week low of around C$106,000 on Wednesday before recovering toward the C$109,000 level by Friday morning.

The Federal Reserve’s vote to hike rates was unanimous, with the committee citing persistent inflation alongside resilient spending, strong productivity, and robust capital investment. The Fed raised its target range by 25 basis points to 3.75% - 4.00%. Updated projections also showed a median year-end federal funds rate of 4.1%, consistent with another quarter-point increase before year-end if policymakers follow the median projected path.

Meanwhile, Canada’s inflation data was somewhat less hawkish. Headline CPI remained at 3.0% in August, while consumer prices fell 0.1% month-over-month.

For crypto, higher interest rates and elevated bond yields translate into a tougher liquidity environment. However, Bitcoin’s rebound from its Wednesday lows despite both the rate increase and legislative setback shows buyers stepped in after the initial weakness, although it is too early to conclude those risks are fully reflected in prices.

Attention will now shift to the Fed’s next move. New York Fed President John Williams and Federal Reserve Vice Chair Philip Jefferson are scheduled to speak Tuesday at the U.S. Treasury Market Conference, giving investors an early opportunity to hear from senior policymakers following last week’s rate hike. Both are scheduled to deliver remarks at the conference, which will focus on U.S. Treasury-market developments. However, the market will be listening closely for any comments that provide additional context whether the September hike was a one-off move or the beginning of a longer tightening cycle.

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