Tether CEO MCA Concerns Buterin to ‘Clean Up Ethereum Efficiency’: Finance Redefined

Concerns are growing over the implications of the upcoming European crypto regulatory bill. Although it is a big step for the industry, the European framework poses significant banking risks for stablecoin issuers, Tether CEO Paolo Arduino told Cointelegraph.

In the broader crypto space, Vitalik Buterin has unveiled his plan to reduce Ethereum's data bloat and simplify its entire protocol, dubbed “The Purge,” as part of his plans to create more efficiency in the world's second-largest blockchain network.

EU MCA rules create “systematic” banking risks for stablecoin – Tether CEO

Europe's upcoming regulatory framework will introduce banking issues for stablecoin issuers that could threaten the stability of the broader crypto space, says Paulo Arduino.

The Market in Crypto-Assets Regulation (MiCA) is the first comprehensive regulatory framework for the crypto industry and will be fully implemented on December 30. Under MiCA, stablecoin issuers are required to hold at least 60% of reserve assets. In European banks.

Considering that banks can lend up to 90% of the reserves, this can introduce “strategic risks” for “stablecoin” issuers, Tether CEO Arduino – the world's largest stablecoin (USDT) issuer, which recently exceeded $120 billion in market capitalization.

Arduino shared his concerns with Cointelegraph in an interview at Plan B in Lugano, Switzerland.

“If you have €10 billion under management, you need to deposit €6 billion in cash. It is 60% of 10 billion euros. We know that banks can lend 90% of their balance sheet. Therefore, out of 6 billion euros, they lent 5.4 billion euros to people […] 600 million euros remain in the bank balance.

Tether's Paolo Arduino, interview with Zoltan Vardai of Cointelegraph, clip 1. Source: YouTube

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The “Purge” – Vitalik's plan to reduce ethereum inflammation

Ethereum founder Vitalik Buterin has released the fifth part of his blog series on the future path of the blockchain network titled “The Purge,” which aims to reduce data bloat and simplify the Ethereum protocol.

The cleanup focuses on cutting unnecessary data storage and eliminating obsolete features while maintaining the “sustainability” of the blockchain to make Ethereum more efficient.

The cleanup is not designed to directly affect Ethereum gas fees. However, the proposed changes could improve network performance and reduce operating costs.

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Radiant Capital Breaks Down $58 Million In Expensive “Education” For DeFi

Radiant Capital continues to hit the Ethereum lending market after a hack of digital assets worth $58 million.

On November 1, the loan protocol implemented changes including the transfer of ownership to a fixed-term contract. Radiant Capital Group says this will enforce a mandatory 72-hour waiting period for any adjustments, which will strengthen Radiant's security.

The team implemented an emergency manager role using a multi-signature structure. The role is tasked with keeping the Lending Protocol markets in place and stopping as needed.

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Crypto surges in Eastern Europe: DeFi drives 33 percent of transactions

Decentralized financial activity is increasing in Eastern Europe, showing continued cryptocurrency adoption, according to onchain analytics platform Chainalysis.

Between July 2023 and June 2024, Eastern Europe acquired more than $499 billion worth of cryptocurrency.

The decentralized finance (DeFi) movement accounts for one-third of the region's crypto value flow, totaling more than $165 billion, according to an Oct. 30 Chainalysis crypto adoption report.

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Solana's daily payout exceeded $2.5 million in 24 hours by flipping Ethereum

Solana has surpassed Ethereum in daily network fee generation, making it the world's third largest blockchain with growing user activity.

Solana generated more than $2.54 million in value in 24 hours, surpassing Ethereum's $2.07 million on October 28 – making Solana the fifth largest payment generating protocol in the crypto space, according to Defillama data.

Solana's increasing payouts are linked to growing trading activity on Radium's main decentralized exchange (DEX), which saw more than $3.41 million worth of Solana blockchain in 24 hours.

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Overview of the DeFi market

Most of the 100 largest cryptocurrencies by market capitalization ended the week in the red, according to data from Cointelegraph Markets Pro and TradingView.

Out of the top 100 tokens, Celestia (TIA) was the week's biggest loser, falling more than 19%, followed by Immutable (IMX), which dropped 19% over the past week.

Thanks for reading this week's roundup of the most impactful DeFi developments. Join us next Friday for more stories, insights and lessons about this dynamic and evolving space.