GM all, and happy Thursday. 

Oil and the VIX got crushed into yesterday’s open on the back of ceasefire news, leading to strength across the board. While Wednesday’s session opened strong, there was little follow-through on this intraday, with many sectors giving back these gains. 

While risk assets remain volatile, durable themes are present in both RWA lending and the regulatory front, discussed below. Enjoy!

Wednesday’s trading session opened strong on the back of ceasefire news with an overnight gap up of 2.5% on the equity indices, but intraday trading was sideways, with many crypto sectors giving back gains on the day. Notably, oil fell 21% from its recent high, easing concerns about negative ramifications for both future growth and inflation. Along with this, the VIX’s recent correlation to oil held strong, with the VIX falling 20% (from 26 down to 21) on the day, marking a stark shift away from the elevated volatility regime that characterized recent weeks in risk assets. On the daily timeframe, the only crypto sectors to record positive returns on the session were Gaming, Miners and Perps, while everything else saw downside.

Zooming out to the weekly, we see improved strength and breadth across crypto sectors, with most sectors recording positive returns. Notably, Miners and Equities are the standouts of the week, showing a strong beta to the upside moves in both crypto majors and Equity indices.

Amid an uncertain backdrop for risk assets, one pertinent theme showing resilience is the growing use of RWAs in DeFi. While historically many RWA issuances have sat idle onchain, seeing little trading volume or margin, RWA deposits in lending platforms and loans originated against these continue to push new highs. As these RWAs offer risk and return profiles highly distinct from crypto-native spot assets or yield tokens, their growth and utilization have not been impaired by the bear-market price action — in fact, just the opposite. The winning issuers and the platforms that underwrite against them should remain top of mind, as this sector is one of the few still posting KPIs that are up and to the right.

While volatile markets and the broadly negative trend for crypto remain, regulatory buy-in and rulemaking are only progressing, as discussed below. 

— Luke

The stablecoin compliance reckoning

The stablecoin regulatory stack is almost complete. Yesterday, FinCEN and OFAC released a joint proposed rule under the GENIUS Act. The rule would require permitted-payment stablecoin issuers to implement AML and CFT programs, including transaction-blocking and freezing capabilities, risk-based internal controls, and real-time cooperation with law enforcement targeting designated money-laundering concerns. 

The proposal sits alongside parallel rulemaking from the OCC and FDIC issued in recent weeks, with all three converging on a January 2027 compliance deadline. Treasury Secretary Bessent framed the effort as protecting the financial system without stifling innovation, and the agencies signaled a light enforcement posture. FinCEN indicated it would not bring major actions unless an issuer shows “significant or systemic failure” to maintain its program.

A more interesting data point arrived separately: The White House Council of Economic Advisers published a report finding that banning stablecoin yield (the current fault line in CLARITY Act negotiations) would increase total bank lending by roughly $2.1B, or 0.02% of the $12T loan market. Community banks would capture an even smaller slice at around $500M. Against that, the CEA estimated a net welfare loss of ~$800M per year from users losing access to yield, producing a cost-benefit ratio of 6.6 against the ban. The banking lobby’s core argument — that stablecoin yield materially cannibalizes deposit funding — is now explicitly contradicted by the White House’s own economists.

Together these two moves clarify the direction of travel. The AML/CFT framework treats stablecoin issuers as financial institutions in full, subjecting them to Bank Secrecy Act obligations and OFAC sanctions compliance that mirror what traditional payment processors carry. In return, the administration is signaling it will resist yield restrictions that would make regulated stablecoins structurally less competitive than their offshore counterparts. The CLARITY Act markup, which has yet to be scheduled in the Senate Banking Committee after Tim Scott delayed it in January, remains the unresolved variable. The White House report reads as a deliberate intervention in that negotiation, giving crypto-aligned lawmakers a quantified economic argument to resist bank pressure on yield.

The practical implication for issuers is that the compliance surface is expanding fast, and the January 2027 deadline is closer than it looks. Circle, Tether and any new entrant pursuing a GENIUS Act charter will need AML infrastructure that can freeze transactions on FinCEN designation and run OFAC screening at the protocol level, which are table stakes for operating in the US market. The more consequential question is whether the CLARITY Act passes with yield intact.

— Nick

1. DPRK Runs Deep

ZachXBT published a thread on X detailing a previously unreleased dataset exfiltrated from an internal North Korean payment server, exposing a coordinated DPRK IT-worker operation generating ~$1M per month. The data, shared by an unnamed source after a DPRK worker’s device was compromised, included chat logs, fabricated identities, forged legal documents, and crypto-to-fiat conversion records tied to 390 accounts. The operation routed payments through a centralized internal platform, with all transactions confirmed through a single admin account. Three companies surfacing in the data are currently OFAC-sanctioned. The findings document spans December 2025 through April 2026 and represents the first public release of this dataset.

2. Entering the era of the headless merchant

Noah Levine published a newsletter post arguing that merchants, not the payment rails, are now the defining opportunity in agentic commerce. Levine documents the first month of the Machine Payments Protocol marketplace, a Stripe and Tempo-built directory of over 60 services designed exclusively for AI agent consumption, which processed 31K transactions from ~900 agents in its first week alone, at prices ranging from $0.003 to $0.0035 per request. 

Levine’s central argument is that the “headless merchant,” a business with no storefront, user accounts, or sales team, represents a structurally new cost model that couldn’t have existed five years ago. The payment, he argues, is the authentication. His broader thesis revolves around the idea that the subscription model erodes in cases where the buyer is an agent that can transact per request across dozens of services simultaneously without ever creating an account. He suggests the biggest opportunity in agentic commerce is no longer building payment rails but building the merchants those rails were designed to serve.

3. Seeing Like a Market: Event Contracts and Market Topology

In “Seeing Like a Market,” the author argues that institutions often hedge binary risks with options that are unnecessarily expensive because they bundle in volatility exposure, dealer intermediation, and replication frictions that event contracts avoid directly. The paper introduces the Vega Wedge and Liquidity Seesaw as a framework for comparing those structural costs with the still-thinning liquidity of prediction markets. Looking across 87 event contracts in 11 categories, it finds that prediction markets are already becoming cost-competitive first in higher-variance risk-premium categories, suggesting they could increasingly replace derivatives for discrete, time-bounded risks.

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