If lawmakers ultimately ban stablecoin rewards under the proposed CLARITY Act, Coinbase (COIN) could lose one tool it uses to attract users to hold digital dollars on its platform — though analysts say the impact on the exchange’s business may be limited.

As lawmakers debate the future of stablecoin regulation in Washington, one unresolved question in the proposed CLARITY Act could have significant implications for Coinbase and other stablecoin partners’ business model: whether companies will be allowed to share yield with stablecoin holders.

The bill, which has been stalled in Congress since January, seeks to establish a regulatory framework for stablecoins — digital tokens typically pegged to the U.S. dollar. A central point of contention is whether crypto firms should be allowed to pass through the yield earned on the reserves backing those tokens. Banks and some lawmakers have pushed to prohibit interest payments, while crypto companies, including Coinbase, have argued that restricting rewards would undermine stablecoins’ utility and competitiveness.

However, this week there were some glimmer of hope from D.C. One possible deal may be that stablecoin issuers and their partners tweak the language of their offerings to make them sound distinct from bank deposits, Senator Cynthia Lummis said Wednesday.

Read more: Key U.S. senator on crypto market structure bill negotiation: ‘We think we’ve got it’

Still, for Coinbase, the issue matters because stablecoins, particularly USD Coin (USDC), have become an important source of revenue and user engagement.

Under the CLARITY Act’s current draft, stablecoin issuers would be barred from paying interest directly to holders. But according to one industry source familiar with the legislation who didn’t want to be named, the language leaves room for alternative structures that could still allow rewards to reach users.

“There are so many loopholes in the CLARITY Act when it comes to stablecoin yields that the genie is kind of out of the bottle already,” the source told CoinDesk. While the bill prohibits issuers from paying interest, it does not clearly ban exchanges or platforms from distributing incentives such as rebates, credits or other rewards.

The distinction between “interest” and “rewards” is thin, the source added. Marketing incentives or loyalty programs could effectively replicate the economic impact of yield while technically remaining compliant. That echoes similar debates around guidance tied to the GENIUS Act, where the line between restricting yield and shaping how it can be distributed through partners remains unclear.

Another provision in the bill may further complicate enforcement. The legislation contains a carveout for payments tied to activity — meaning yield could potentially be distributed if a stablecoin is used in transactions, lending or other financial activity. In practice, that could allow structures where stablecoins are routed through decentralized finance protocols to generate returns before those rewards are passed on to users.

Even partnerships between issuers and exchanges could potentially achieve a similar result. For example, an issuer could earn yield on Treasury reserves, share some of that revenue with an exchange partner and have the exchange distribute rewards to users — an arrangement that regulators have warned might constitute evasion but that is not explicitly banned in the bill’s current form.

“It feels like even a mediocre marketing professional could come up with several creative structures that would be compliant,” the source said.

Not ‘existential’

Wall Street analysts say that the debate has implications for Coinbase but is unlikely to threaten the company’s broader business model.

Owen Lau, an analyst at Clear Street, said the ability to share stablecoin yield is only one of many ways the company attracts users to its platform.

“It’s important, but it’s not even close to existential,” Lau said. Coinbase already generates revenue from trading, derivatives and its Base blockchain ecosystem, and many users come to the platform for services beyond stablecoin rewards.

In 2025, transaction revenue remained the exchange’s main source of revenue, though stablecoin revenue had increased exponentially from the year prior, bringing in $1.35 billion in 2025 compared to $910 million in 2024, making it the second-largest driver of revenue, according to a recent filing.

Coinbase, however, takes a slightly different view on this debate.

“Ironically, if a crypto rewards ban went into law, it would make us more profitable since we payout large amounts in rewards to our customers holding USDC,” Coinbase CEO Brian Armstrong wrote in a post on X in February. “But we don’t want this to happen, it’s better for customers to get rewards, and it’s better for the US to keep regulated stablecoins competitive on a global stage.”

Stablecoin incentives do play a strategic role, however.

Clear Street’s Lau said Coinbase benefits when customers keep USDC on its platform because the company can capture the full share of yield generated by the reserves backing the token. If users move those assets to external wallets or decentralized platforms, Coinbase may receive only a portion of that revenue.

“If they cannot give enough incentive to customers, these people may move USDC away from Coinbase wallets,” Lau said, which could reduce the company’s share of stablecoin-related income.

At the same time, the near-term financial impact may be limited. Lau noted that Coinbase largely passes stablecoin yield through to users, meaning the revenue is often offset by expenses.

“From an earnings perspective, it actually doesn’t change much,” he said, adding that the bigger question is whether restrictions could slow the long-term growth of USDC adoption.

If the final rules allow activity-based rewards or loyalty-style incentives, Lau said Coinbase could still use those programs to encourage customers to hold and use USDC on its platform, potentially driving higher market capitalization for the stablecoin and increasing the revenue Coinbase shares with Circle.

For now, the outcome remains uncertain as lawmakers continue negotiating the bill’s language.

But even if strict limits on yield survive, analysts and industry participants say crypto companies are likely to adapt, ensuring that stablecoins remain a competitive feature of the digital payments ecosystem.

Shares of Coinbase are down about 12% year to date, while bitcoin is down 19%.

Bitcoin’s BTC$69,790.28 biggest limitation just got shattered. A new protocol went live Thursday, making it simple to put the largest cryptocurrency directly to work in powerful, yield-generating strategies within the booming world of decentralized finance (DeFi).

OpNet, a new smart-contract protocol, was activated on the Bitcoin blockchain, marking the arrival of DeFi-powering smart contracts that run directly on Bitcoin’s foundational layer. This keeps traders’ bitcoin on Bitcoin’s mainnet through standard transactions with BTC as the only fee token.

DeFi powers lending and borrowing activities that allow token holders to earn additional returns on their coin holdings. Holders of tokens native to smart-contract blockchains like Ethereum have always been able to access DeFi seamlessly, because the blockchain itself hosted most of the DeFi industry.

But the promise of DeFi came with a catch: it was closed to bitcoin. Bitcoin owners had to adopt strategies such as wrapping BTC with centralized services like Bitgo or Coinbase, using bridges to move assets to Ethereum or other chains, or depositing into custodial lending platforms to access the industry. Each step introduced counterparty risks that contradicted Bitcoin’s core principle of trustless, self-sovereign money.

OpNet’s mainnet debut claims to solve that issue and represents the first time users can access real DeFi applications, such as swapping, staking and token launches, without bridges, wrapped BTC or leaving Bitcoin’s base layer, potentially eliminating the security risks and custody issues that have plagued previous Bitcoin DeFi attempts.

All users need to do is connect their wallets to DeFi applications, keeping their bitcoin as it is and maintaining full control over their assets.

“Every OpNet transaction is just a Bitcoin transaction. Users are never doing anything but making Bitcoin transactions,” Chad Master, a co-founder of OpNet, said in an interview with CoinDesk. “Connect your BTC wallet, make a trustless swap, and your Bitcoin stays Bitcoin. This is what native DeFi on Bitcoin actually looks like.”

The protocol turns Bitcoin DeFi seamless by embedding contract bytecode, parameters and execution data directly into standard Bitcoin transactions. These are then confirmed by Bitcoin miners, ensuring that decentralized applications operate with their execution and state immutably anchored to Bitcoin’s base layer.

Debuts with DeFi stack and OP-20 standard

OpNet’s mainnet activation includes a live DeFi stack running on Bitcoin layer 1. The initial ecosystem enables permissionless smart-contract deployment and focuses on trading, yield generation and native asset issuance.

That allows developers to introduce tokens under the OP-20 standard and build DeFi applications that settle directly to Bitcoin’s base layer.

Users can access MotoSwap, a decentralized exchange for swapping BTC and OP-20 tokens directly on Bitcoin. The platform includes NativeSwap’s two-phase execution model designed to handle Bitcoin’s slower block times, and staking contracts that let users create yield farms for new assets.

The SlowFi embrace

While other blockchains and protocols yearn for speed, OpNet views Bitcoin’s inherent slowness, characterized by 10-minute block times and L1 congestion dynamics, as features, not bugs, calling it “structural exit friction.”

“This is where the SlowFi thesis becomes real: slower blocks, higher fees during congestion, and capital that stays in protocols long enough to actually build value,” Chad Master said. He argued that this friction makes liquidity stickier, preventing “panic exits” and fostering a more durable DeFi cycle where protocols have time to stabilize and iterate.

Master likened the debut to a replay of a foundational era in crypto:

“We’re basically running back 2020 Ethereum DeFi Summer play-by-play on Bitcoin Layer 1 … But this time, the environment is better. Bitcoin’s 10-minute blocks create natural exit friction that sustains liquidity longer.” This suggests a more robust and sustainable DeFi ecosystem, less prone to the “farm-and-dump” cycles seen on faster chains.

The OpNet team also signaled major stablecoin integration on Bitcoin via the OP-20S extension standard as a key milestone for early Q2 2026, promising to further expand the utility of Bitcoin-native DeFi.

Marszalek was specific about who is being let go: those in roles that, in his words, “do not adapt in our new world.”

Crypto.com founder Kris Marszalek has said the exchange will cut around 12% of its workforce. The move is part of a strategic pivot by the company toward the enterprise-wide integration of AI.

The AI Efficiency Argument

Marszalek made the announcement in a post on his official X account on March 19, stating that Crypto.com would be integrating AI into its business and that firms that fail to do so are setting themselves up for failure.

“Companies that move slowly will be left behind,” warned the CEO. “Companies that move immediately and pair the best AI tools with top-performers will achieve a level of scale and precision that was previously impossible.”

As part of the step, Marszalek confirmed that they will be letting go of at least 12% of the Crypto.com staff, particularly those in what he described as “roles that do not adapt in our new world.”

The announcement follows the company’s acquisition of the AI.com domain for a reported $70 million in February, which it positioned as a launchpad for autonomous AI agents.

Marszalek did not share specific figures on the firm’s total headcount, the exact number of employees being let go, or the financial impact of the restructuring. He did confirm that those affected had been notified and were “receiving resources to support their transition.”

Block Rehires Staff

In February, Block, the company behind payments platforms like Cash App, Afterpay, and Square, reduced its workforce by more than 4,000 employees, with CEO Jack Dorsey justifying the move using the same rationale Marszalek is employing now.

At the time, Dorsey pointed out that the way forward for running companies would be to pair small teams with AI tools, which would improve efficiency.

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“We’re already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company,” he posted on X.

However, it appears that Block has since rehired a few of the people it had laid off. According to reports, several Block employees posted on their social media that they had received offers to return to work, with one, Andrew Harvard, claiming he was told his layoff was the result of a clerical error.

By Omkar Godbole (All times ET unless indicated otherwise)

The big news of the past 24 hours is that the Fed, the world’s most powerful central bank, is unlikely to provide a meaningful bullish catalyst in the near term, and markets are reacting negatively.

As sentiment weakens, capital is flowing not just out of altcoins but also out of bitcoin BTC$69,925.80 and into stablecoins, which are essentially tokenized versions of the U.S. dollar.

The Fed on Wednesday kept U.S. interest rates unchanged, explicitly warned of a high degree of uncertainty and offered no hints on what the inflation-activity balance could look like following the Iran war-led oil price spike.

Bitcoin dipped below $70,000 early today and is now down 1% since midnight UTC, extending the decline from nearly $76,000 earlier this week. The CoinDesk 20 Index and major tokens such as ether (ETH), solana (SOL) and XRP (XRP) are following BTC’s lead.

Bitcoin’s dominance also dropped, falling to 58.7% from 59.4% in three days. In other words, its share of the total crypto market has declined with the price, a sign that even the largest cryptocurrency is seeing capital outflows. Traditionally, its share would rise during market slides as investors rotated into BTC from alternative cryptocurrencies, or altcoins.

This time, they are rotating into stablecoins. The world’s leading dollar-pegged tokens, USDT and USDC, share of total crypto market cap has increased to 7.76% from 7% and from 3% to 3.35%, respectively.

The behavior is a sign that investors feel safer in dollar equivalents, understandably so, as the Fed’s lack of clarity has left financial markets at the mercy of oil price swings. The energy market seems broken, with the Strait of Hormuz disrupted, leading to wild, erratic energy import bills worldwide that will ultimately add to inflation.

The market remains constructive at the top, fragile underneath, and still far more dependent on liquidity and positioning than on a broad expansion in conviction, according to agentic trading platform Nansen.

“Across all themes, the same market structure keeps showing up: capital is staying selective,” Nicolai Søndergaard, a research analyst at Nansen, said in an email.

“Central banks are no longer a direct upside catalyst for all of crypto, institutional inflows are supporting the core of the market rather than the full risk curve, prediction markets are capturing attention faster than they are building depth, and altcoins still lack the breadth that usually defines a true risk-on phase,” he added.

In traditional markets, the Dollar Index looked to extend Wednesday’s sharp recovery above 100, and futures tied to the S&P 500 fell, both symptoms of growing risk aversion. Stay alert!

Read more: For analysis of today’s activity in altcoins and derivatives, see Crypto Markets Today

What to Watch

For a more comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead“.

• Crypto
  • March 19: Walrus (WAL) final deadline for Tusky users to migrate their data.
• Macro
  • March 19, 8:30 a.m.: U.S. Initial Jobless Claims for week ending March 14 est. 215K (Prev. 213K)
  • March 19, 8:30 a.m.: U.S. Philadelphia Fed Manufacturing Index for March (Prev. 16.3)
  • March 19, 10:00 a.m.: U.S. New Home Sales for January est. 730K (Prev. 745K)
  • March 19, 4:30 p.m.: Fed Balance Sheet for week ending March 18 (Prev. $6.65T)
• Earnings (Estimates based on FactSet data)
  • March 19: Gemini Space Station (GEMI), post-market, -$0.91

Token Events

For a more comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead“.

• Governance votes & calls
  • Cratos DAO is voting on extending the current mobile app reward standard deadline by one month to April 30, 2026. Voting ends March 19.
• Unlocks
• Token Launches

Conferences

For a more comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead“.

Market Movements

• BTC is down 0.94% from 4 p.m. ET Wednesday at $70,240.69 (24hrs: -4.92%)
• ETH is down 0.3% at $2,177.57 (24hrs: -5.85%)
• CoinDesk 20 is down 0.11% at 2,055.04 (24hrs: -4.66%)
• Ether CESR Composite Staking Rate is down 1 bps at 2.74%
• BTC funding rate is at -0.0024% (-2.5754% annualized) on Binance

• DXY is up 0.10% at 100.12
• Gold futures are down 2.73% at $4,689.99
• Silver futures are down 5.03% at $71.55
• Nikkei 225 closed down 3.38% at 53,372.53
• Hang Seng closed down 2.02% at 25,500.58
• FTSE 100 is down 1.90% at 10,109.91
• Euro Stoxx 50 is down 2.12% at 5,615.49
• DJIA closed on Wednesday down 1.63% at 46,225.15
• S&P 500 closed down 1.36% at 6,624.70
• Nasdaq Composite closed down 1.46% at 22,152.42
• S&P/TSX Composite closed down 1.87% at 32,312.67
• S&P 40 Latin America closed down 0.57% at 3,497.26
• U.S. 10-Year Treasury rate is up 6 bps at 4.26%
• E-mini S&P 500 futures are up 0.74% at 6,674.75
• E-mini Nasdaq-100 futures are up 0.78% at 24,625.25
• E-mini Dow Jones Industrial Average futures are up 0.66% at 46,539.00

Bitcoin Stats

• BTC Dominance: 58.68% (-0.25%)
• Ether-bitcoin ratio: 0.03099 (0.22%)
• Hashrate (seven-day moving average): 922 EH/s
• Hashprice (spot): $30.72
• Total fees: 2.62 BTC / $189,559
• CME Futures Open Interest: 117,410 BTC
• BTC priced in gold: 15 oz.
• BTC vs gold market cap: 4.68%

Technical Analysis

• The chart shows bitcoin’s daily price swings in candlestick format since late 2025.
• Prices have declined after probing the upper end of the channel identified by trendlines connecting prominent highs and lows since early February.
• A firm move past the upper end would confirm a bullish breakout. Conversely, a move below the lower end would signal a resumption of the broader downtrend.

Crypto Equities

• Coinbase Global (COIN): closed on Wednesday at $202.29 (–3.78%), –0.94% at $200.38 in pre-market
• MARA Holdings (MARA): closed at $8.92 (–3.46%), –1.01% at $8.83
• Riot Platforms (RIOT): closed at $14.10 (–3.95%), +0.28% at $14.14
• Core Scientific (CORZ): closed at $16.35 (–0.43%), –0.55% at $16.26
• CleanSpark (CLSK): closed at $9.88 (–2.27%), –1.32% at $9.75
• Galaxy Digital (GLXY): closed at $21.58 (–8.17%), –1.25% at $21.31
• Exodus Movement (EXOD): closed at $8.10 (–12.34%), +0.12% at $8.11
• CoinShares Bitcoin Mining ETF (WGMI): closed at $39.10 (–2.57%)
• Circle Internet Group (CRCL): closed at $132.84 (+0.40%), –1.12% at $131.35
• Bullish (BLSH): closed at $38.28 (–4.16%), –0.47% at $38.10

Crypto Treasury Companies

• Strategy (MSTR): closed at $140.56 (–6.47%), –0.89% at $139.31
• Strive Asset Management (ASST): closed at $10.03 (–9.59%), –1.54% at $9.88
• Sharplink (SBET): closed at $7.87 (–5.29%), –0.25% at $7.85
• Upexi (UPXI): closed at $1.07 (–6.96%), –2.80% at $1.04
• Lite Strategy (LITS): closed at $1.18 (–2.48%)

ETF Flows

Spot BTC ETFs

• Daily net flows: -$129.6 million
• Cumulative net flows: $56.38 billion
• Total BTC holdings ~1.3 million

Spot ETH ETFs

• Daily net flows: -$55.5 million
• Cumulative net flows: $11.94 billion
• Total ETH holdings ~5.79 million

Source: Farside Investors

While You Were Sleeping

Singapore-based crypto exchange Crypto.com is cutting about 12% of its workforce, or roughly 180 employees, as it leans into AI-driven efficiency, joining a growing wave of firms shrinking teams while betting on automation.

“We are joining the list of companies integrating enterprise-wide AI,” a Crypto.com spokesperson told CoinDesk. “As we continue to prioritize resources around key growth areas and drive efficiencies across our business, we reduced our workforce by approximately 12%.”

Kris Marszalek, Crypto.com’s CEO, on X said companies that do not pivot toward the integration of AI into their processes will fail.

“Companies that move slowly will be left behind,” he added. “Companies that move immediately and pair the best AI tools with top performers will achieve a level of scale and precision that was previously impossible. This is where we must go.”

In February, Marszalek said Crypto.com spent $70 million to buy ai.com, signaling his company’s move into artificial intelligence, a sector that reached nearly $1.5 trillion in worldwide spending in 2025, according to Gartner.

The Singapore-headquartered exchange had around 1,500 employees before the cuts.

The move marks the latest round of layoffs at Crypto.com, which has trimmed staff multiple times in recent years amid shifting market conditions and internal restructuring, including a 20% workforce reduction in 2023.

Crypto.com’s layoffs also follow Block’s decision to reduce its 6,000-strong workforce by 40%. Its founder and CEO, Jack Dorsey, cited AI-enabled productivity gains as the reason for the cuts. He said AI allows smaller teams to move faster.

In January, OKX announced it was restructuring its global institutional business, resulting in job losses it claimed were not a “mass layoff.” The exchange didn’t mention the exact number. That same month, Polygon laid off 60 employees, disputing reports it let go 30% of its staff. In the U.S., the technology industry cut about 22,291 jobs last year.

The Crypto.com spokesperson said all employees, who before the layoff totalled roughly 1,500 worldwide, have been notified and will receive resources to support their transition.

The Singapore-based exchange, which boasted 100 million registered accounts and approximately $750 billion in trading volume in 2025, recently received conditional approval from the U.S. Office of the Comptroller of the Currency (OCC) to establish a national trust bank, setting the stage for the exchange to expand its custody services under federal oversight.

The European Central Bank is shifting from policy architecture to practical deployment planning for a potential digital euro. In a published call for industry expertise, the ECB opened two workstreams under its Rulebook Development Group to map how the digital euro would operate across ATMs, payment terminals, and the wider acceptance infrastructure.

The bank outlined that one workstream will develop implementation specifications for ATM and terminal providers, focusing on communication technologies, offline capabilities, and the re-use of existing payment standards. The second workstream will design testing, certification, and approval processes for the payment solutions and infrastructure that would underpin the digital euro ecosystem. This marks a notable move toward translating policy concepts into concrete, interoperable technical requirements across Europe.

At the heart of the initiative is the aim to ensure the digital euro can integrate with current payment systems and hardware while supporting offline transactions and cross-border interoperability within European standards. The ECB’s request for expert input signals a desire to harmonize a future digital currency with the region’s established financial infrastructure, rather than building a separate, standalone system from scratch. The announcement comes as part of ongoing work to define a robust, rules-based framework that could govern how digital euro services are accessed by merchants, payment service providers (PSPs), and end users.

Key takeaways

• The ECB has launched two workstreams under its Rulebook Development Group to define ATM/terminal implementation specifications and to establish testing, certification, and approval procedures for digital euro infrastructure and services.
• Efforts emphasize offline functionality and the reuse of existing European payment standards to support broad interoperability across devices and networks.
• The workstreams will gather input from a cross-section of market participants, including merchants, PSPs, and consumers, with the aim of producing a standardized rulebook for the digital euro ecosystem.
• Europe is coupling policy design with implementation timelines, targeting a 2027-era pilot while clarifying that a final issuance decision depends on the passage of relevant legislation.
• The initiative reflects a broader shift toward practical rollout planning, signaling that the ECB expects to test real-world conditions before any potential issuance.

Aim to bridge policy and practice across Europe’s payments landscape

According to the ECB, one workstream will concentrate on crafting practical implementation specifications for ATM networks and payment terminals. This includes mapping communication technologies, ensuring offline capabilities, and identifying how to reuse and harmonize existing payment standards so that digital euro hardware can function smoothly with current terminals and cashless channels. By prioritizing offline support, the ECB acknowledges the reality that connectivity can be uneven across regions, and resilience will be essential for broad acceptance.

The second workstream will focus on how solutions within the digital euro framework should be tested, certified, and approved before they can be deployed by PSPs and other infrastructure providers. The aim is to create a credible, standardized process that regulators, merchants, and tech partners can rely on as they develop and bring digital euro services to market. Through this structure, the ECB intends to reduce ambiguity around compliance and safety criteria, helping to align a diverse ecosystem of vendors, software platforms, and hardware manufacturers.

Both streams report to the Rulebook Development Group, which includes representatives from merchants, payment service providers, and consumers. The ECB said selected experts are expected to provide technical input to support the development of a standardized rulebook, ensuring that the digital euro’s design choices translate into concrete, testable requirements for market participants.

Timeline and pilot context: moving toward a 2027 milestone

The ECB has previously sketched out a plan to begin selecting EU-licensed PSPs ahead of a 12-month digital euro pilot, anticipated to commence in the second half of 2027. In remarks on Feb. 18, ECB Executive Board member Piero Cipollone indicated that the pilot would involve a limited set of merchants, Eurosystem staff, and PSPs, providing a controlled environment to assess how digital euro transactions unfold in real-world settings.

The pilot is designed to test a narrow slice of the ecosystem—focusing on merchant acceptance, settlement flows, security controls, and user experience—before broader policy decisions are made. The ECB has stressed that its final decision on whether to issue a digital euro will come only after the relevant legislation is enacted, underscoring the program’s regulatory and legislative dependencies as the project moves forward.

The timing aligns with a broader European push to explore programmable money, interoperability, and cross-border payments within a monetary policy framework that remains under public debate. The workstreams’ emphasis on standards, certification, and implementation readiness complements earlier outlining of the Appia roadmap and other tokenized-money initiatives, illustrating a coordinated path from concept to potential deployment.

In practice, the forthcoming rulebook and testing framework would help determine how a digital euro would interact with existing point-of-sale systems, online checkout flows, and offline payment experiences acrossEU member states. The approach seeks to minimize disruption to merchants while maximizing the currency’s reliability, security, and user accessibility across a diverse payments landscape.

What comes next and what to watch

As the ECB progresses through the RDG-led workstreams, market participants will be watching how quickly a standardized rulebook materializes, which PSPs are invited to participate in the pilot, and how the 2027 timeline aligns with legislative developments in the EU. The coordination between policy objectives and implementation specifications will be crucial for assessing the digital euro’s feasibility and potential impact on existing payment rails, cross-border settlement, and consumer protection regimes.

Observers should also monitor how offline capabilities are reconciled with security and risk controls, how interoperability with legacy payment standards is achieved, and how the certification framework will certify both software and hardware components used in digital euro ecosystems. The path from policy to practical deployment remains complex, but the ECB’s latest move signals a deliberate step toward testing and standardization that could shape Europe’s digital monetary future.

The governance token of Venus (XVS), a BNB Chain-based money market with over $1.4 billion in total value locked, has dropped more than 9% in 24 hours after an exploit that left it with $2.15 million in bad debt.

The drawdown comes amid a broad risk asset sell-off that has seen the broader CoinDesk 20 (CD20) index lose 4.6% of its value in the same period.

The exploit, which occurred on March 16, didn’t appear to impact XVS prices until analysis showed major holders, including wallets linked to Justin Sun, moving large amounts to exchanges.

Venus said the exploit, in its Thena market left about $2.15 million in bad debt or loans the system can no longer recover.

The attacker, according to the protocol, spent about nine months accumulating a large position in Thena’s THE token. That accumulation, according to PeckShield, was funded with 7,400 ETH withdrawn from mixing protocol Tornado Cash.

The attacker then donated more than 36 million THE straight to the vTHE contract, skipping the normal cap checks and lifting the market’s exchange rate by about 3.8 times. The gap in code that allowed the attacker to skip these checks, Venus said, is being closed.

With that higher paper value, the attacker posted THE as collateral, borrowed other assets and bought more THE in a thin market, according to Venus.

The buying helped lift THE from about $0.26 to near $0.56. Venus said this was not a flash-loan attack, its oracles kept working and Venus Flux was not affected.

When the attacker later sold THE, the price dropped more than 17% in less than a day and liquidations followed. Analysis puts the value pulled before liquidations at roughly $3.7 million to $5.8 million, with assets including tokenized bitcoin, BNB, and stablecoins being taken.

The damage was mostly limited to THE token and, to a lesser extent, CAKE. It also said no user funds were lost outside the affected pools.

The protocol paused THE borrows and withdrawals, cut THE’s collateral value to zero and tightened rules on other markets identified as at-risk in response to the incident. Markets at-risk include those for BCH$457.13, LTC$55.39, aave AAVE$114.99, among others.

The attacking address had been flagged by the community before the incident. Venus did not act as “no rules had been broken, and no exploit had occurred,” it said.

“Venus is a decentralized protocol. As a permissionless protocol, we cannot and should not freeze or blacklist addresses based on suspicion alone,” the protocol wrote on social media. “This is a tension inherent to DeFi, and one we take seriously.”

Governance is expected to decide how to cover the loss through Venus’s risk fund.