1st August

You can read the last “This week in crypto” here.

The US Securities and Exchange Commission has approved in‑kind creations and redemptions for spot Bitcoin and Ethereum exchange‑traded funds, a structural change issuers have sought since spot products launched. Until now, most funds were limited to cash creations and redemptions, which added conversion frictions and could widen tracking error versus the underlying coins. Allowing authorised participants to deliver and receive BTC or ETH directly should improve primary‑market efficiency, with potential knock‑on benefits for spreads and secondary‑market liquidity.

Operationally, in‑kind flows let ETF market makers manage inventory without the extra step of converting crypto to cash (or vice‑versa), reducing slippage in volatile windows and aligning crypto ETPs with long‑standing commodity ETF practice. For institutions that custody coins already, it also simplifies workflows and may lower the total cost of ownership. If liquidity improves as expected, issuers could see higher primary‑market activity around rebalances, index events and large portfolio rotations.

Strategically, this is the first major crypto‑friendly move under the SEC’s new leadership and will be read as a signal that the regulator is willing to bring digital‑asset market structure closer to the norms of other asset classes. It does not remove all compliance questions for issuers, but it reduces a key friction point that has constrained product design since launch.

JPMorgan and Coinbase announced a partnership that will allow Chase credit‑card holders to fund their Coinbase wallets and buy crypto directly on the exchange starting this autumn. It’s a notable step from one of the world’s largest banks, and a further sign that crypto rails are being woven into everyday consumer finance. The collaboration lands as the industry’s total market value hovers around multi‑trillion‑dollar levels and traditional finance firms expand custody, payments and trading offerings.

The roadmap goes beyond simple card funding. From 2026, Chase customers are slated to redeem card reward points into USDC and link bank accounts directly to Coinbase, tightening the bridge between fiat rewards ecosystems and stablecoin usage. That could normalise stablecoin balances as a kind of “digital cash” in mainstream wallets and accelerate stablecoin familiarity among non‑crypto‑native users.

For Coinbase, incremental on‑ramps often translate to higher conversion and retention, while for JPMorgan, the initiative offers data on consumer appetite and a controlled environment to scale crypto‑adjacent services. Market reaction was positive, with Coinbase shares nudging higher on the day, and analysts framing the deal as part of a broader shift from cautious experimentation to production‑scale integrations across incumbent banks.

A new White House report set out an expansive crypto agenda, urging agencies and lawmakers to clear regulatory bottlenecks and integrate digital assets across taxation, banking, capital markets and retirement products. The document presses the SEC and CFTC to use existing powers to enable federal‑level trading and proposes tailored disclosure regimes for crypto securities, alongside clearer pathways for platforms to combine trading and custody functions under supervision.

Politically, the paper formalises the administration’s intent to fast‑track a coherent national framework after years of fragmented rulemaking. For firms, it points to more predictable licensing and potential relief from the patchwork of state rules, while signalling expectations on anti‑money laundering controls, market integrity and consumer protections. Although the report did not add detail on a previously floated national crypto reserve, it frames digital assets as strategic infrastructure rather than a niche speculative market.

If even part of the agenda is enacted, the practical effects could include smoother bank‑charter routes for crypto companies, clearer eligibility for Federal Reserve account access, and more certainty around token issuance and secondary trading. That combination would likely lower compliance risk premia and unlock new product sets spanning tokenised deposits, stablecoin settlement and retirement‑account exposure to spot ETFs.

PayPal introduced Pay with Crypto, a merchant offering that accepts more than 100 cryptocurrencies and supports instant conversion to stablecoins or fiat, with headline merchant fees advertised as low as 0.99% for eligible cross‑border flows. The company positions the product as a way to reduce international card‑processing costs by up to 90% and to tap a large addressable user base across leading self‑custody and exchange wallets. Initially rolling out to US merchants, the service aims to fold crypto payments into PayPal’s existing checkout and settlement stack.

Mechanically, shoppers can pay in BTC, ETH, USDT, USDC, XRP and other supported assets, with the merchant receiving PYUSD, another stablecoin or fiat, depending on configuration. That model isolates merchants from coin volatility while preserving the always‑on settlement advantages of digital assets. For PayPal, growing balances in PYUSD—particularly when yield is offered on holdings within PayPal’s environment—could deepen user engagement and create a virtuous loop between payments and stored‑value features.

The launch underscores a broader shift from headline partnerships to end‑to‑end payments plumbing, where crypto functions as an efficiency layer rather than a branding exercise. If adoption follows, expect wider wallet integrations, more granular risk controls at checkout, and competition among acquirers to support stablecoin settlement as a standard, not a novelty.

In a week of concrete progress, the SEC’s in‑kind decision sharpens ETF mechanics for Bitcoin and Ethereum, JPMorgan and Coinbase bring card‑based on‑ramps and USDC rewards into the mainstream, the White House presses regulators and Congress to embed crypto across core financial rails, and PayPal pushes merchant crypto acceptance with a low‑fee, stablecoin‑centric checkout. Together, these steps point to a market moving beyond experiments towards scaled, regulated integration—where coins, stablecoins and traditional finance infrastructure increasingly work in concert.

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