Bitcoin’s Institutional Footprint Grows in the U.S.

TL;DR

• PNC is the first major U.S. bank to offer spot Bitcoin trading.

• The FDIC proposes first stablecoin rules under the GENIUS Act.

• 400,000 miners in China go offline 

PNC Becomes the First Major U.S. Bank to Offer Spot Bitcoin Trading 🚀

It was only a matter of time before a bank announced it would offer actual Bitcoin trading to its customers… and now it's happened!

PNC Bank, which worked closely with Coinbase to offer spot Bitcoin trading, has become the first major U.S. bank to offer direct Bitcoin exposure to its customer base.  

Going forward, eligible PNC clients can trade Bitcoin like any other asset in their account without needing to open a crypto exchange account and send funds back and forth. 

For now, the product is available for individuals and families, family offices, and business owners in the high-net-worth and ultra-high-net-worth segment served by the lender’s private banking arm. 

However, PNC plans to expand its Bitcoin services in phases, eventually opening access to additional client segments.

This is a big step for Bitcoin adoption that’s been a few years in the making. I wouldn’t be surprised if we see more banks launching similar offerings in the coming year. 

The FDIC Proposes the First GENIUS Act Stablecoin Application Rule  👀

I’ve written about the GENIUS Act before and explained why it’s a big deal in digital asset regulation. 

In short, the GENIUS Act lays the groundwork by setting clear rules on who can issue stablecoins, mandating full 1:1 backing with U.S. dollars and other liquid assets, and placing issuers under the watchful eyes of both federal and state regulators. 

This week, we have an exciting update. 

The Federal Deposit Insurance Corp. (FDIC), which regulates thousands of banks in the U.S., issued its first proposal on how to interact and use stablecoins. The board voted and approved the proposal on Tuesday. 

In the proposal, the FDIC aims to clarify how regulated banks issue stablecoins through their subsidiaries and whether these institutions need to submit additional information about their businesses, including financial information and plans for safe, steady issuance.

The proposal is now open for public comment. Under the GENIUS Act timelines reflected in the proposal, the FDIC would be required to approve or deny a substantially complete application within a defined review period, with deemed approval if the agency doesn’t act within that timeframe.

Travis Hill, the Acting Chairman of the FDIC Board of Directors, explained: "Under the proposal, the FDIC would adopt a tailored application process that would enable the FDIC to evaluate the safety and soundness of an applicant’s proposed activities based on the statutory factors while minimizing the regulatory burden on applicants."

If all of this passes smoothly, we could see banks and large financial institutions issuing stablecoin products, building native payment or processing services, and enabling customers to use stablecoins alongside U.S. dollars. 

Another significant milestone in making it easier for everyday Americans to use and interact with digital assets. Amazing! 

400,000 Miners Go Offline in China… Will More Hash Rate Move to the U.S.? 🧐

Mining and China have been a love-hate story so far, from the mining ban in 2021 to the relocation of miners in Asia, and now a move that apparently saw 400,000 mining machines turned off. 

According to VanEck’s Head of Digital Assets Research, Matthew Sigel, the BTC hashrate has just dropped the most since the 2024 halving.

The reason for this appears to be that around 400,000 miners linked to mining farm shutdowns in China’s Xinjiang region have been turned off.

Former Canaan Chairman, Jack Kong, tweeted that computing power fell by roughly 100 exahashes per second (EH/s) from the day before, representing an 8% decline. Based on an average of 250 terahash per second, this equates to more than 400,000 mining machines being shut down.

Kong suggests that the U.S. benefited from the successive farm closures in Xinjiang, even without directly intervening.

…and it’s that comment that is interesting!

The U.S. wants to become the world's Bitcoin and crypto hub, so attracting more miners (and their hash rate) would align with that. 

If things evolve as Kong said, the next logical step for a miner would be an environment where the industry is supported and not under constant threat. 

It will be very interesting to see how this develops, and in particular, where the “missing hashrate” will be turned back on. 

Elsewhere in Bitcoin 📖

A quick look at what else has been happening in Bitcoin: 

• The SEC released a Bitcoin investor bulletin 

• Congress introduced the Bitcoin for America Act

• Bitcoin Lightning Network reaches a new all-time high in capacity

• The Norwegian sovereign wealth fund backs Metaplanet proposals

• Thanks to Square, more U.S. businesses are using BTC as money

Your fellow stacker in sats, 

Patrick Lowry

PS: Connect with me up on X if you want to hear more of my thoughts on Bitcoin and digital assets.

Disclaimer: The opinions expressed in this newsletter are solely those of the author and do not necessarily represent the views of any associated company. This newsletter is for educational and informational purposes only and should not be construed as investment, financial, or any other professional advice. Investing in cryptocurrencies is highly speculative and carries a significant risk of substantial financial loss, so you must conduct your own thorough research and consult with independent professional advisors before making any decisions.