The U.S. Treasury is preparing a report on stablecoins and the potential risks that they pose to the greater financial system. 

Standard and Poor (S&P), an American credit rating agency, believes that El Salvador could potentially harm its credit rating after the enactment of a law that recognizes Bitcoin (BTC) as legal tender - the law came into effect nationwide on the 7th of September. 

Avalanche, a proof-of-stake blockchain, has raised $230 million in a sale of its native token $AVAX to institutional investors. The capital will be used to help bolster and boost DeFi activity on the platform, support new enterprise tools, as well as facilitate grants for projects wanting to build on Avalanche.

Top stories in the Crypto Roundup today:

• The U.S. Treasury Is Preparing A Report On Stablecoins
• S&P Warns El Salvador Bitcoin Adoption Could Harm Credit Rating
• Avalanche Raises $230m Led By Polychain & Three Arrows Capital

The U.S. Treasury Is Preparing A Report On Stablecoins

The U.S. Department of the Treasury is preparing a report on stablecoins and the potential risks that they pose to the greater financial system. 

A team of senior financial regulators, including Treasury Secretary Janet Yellen, Federal Reserve Chairman Jerome Powell and Securities and Exchange Commission (SEC) Chairman Gary Gensler, along with a plethora of other regulators, last met in July to discuss their approach to this report. 

The news comes as the government continues to observe the crypto industry, with the Chair of the SEC, Gary Gensler, regularly voicing his concerns about the lack of regulation present in the quickly growing ecosystem.

These gaps in regulation include the lack of a regulator to oversee crypto spot trading markets, investor protection concerns, as well the Treasury Department’s concerns about more comprehensive reporting of crypto transactions for tax purposes.

S&P Warns El Salvador Bitcoin Adoption Could Harm Credit Rating

Standard and Poor (S&P), an American credit rating agency, believes that El Salvador could potentially harm its credit rating after the enactment of a law that recognizes Bitcoin (BTC) as legal tender - the law came into effect nationwide on the 7th September. 

S&P believes that the move toward cryptocurrencies could not only pose financial risks and challenges to the country’s economy but could also create unnecessary hurdles in the country’s attempt to secure a $1 billion loan agreement from the International Monetary Fund (IMF). 

"The risks associated with the adoption of bitcoin as legal tender in El Salvador seem to outweigh its potential benefits," S&P said, emphasizing the “immediate negative implications” of the Bitcoin Law for the country’s credit rating.

El Salvador’s credit score was last assessed in December 2018, when they received a B- rating; however, this could be influenced by the shift in the nation’s monetary policy.

Avalanche Raises $230m Led By Polychain & Three Arrows Capital

Avalanche, a proof-of-stake blockchain, has raised $230 million in a sale of its native token $AVAX to institutional investors. The capital will be used to help bolster and boost DeFi activity on the platform, support new enterprise tools, as well as facilitate grants for projects wanting to build on Avalanche. 

Polychain and Three Arrows Capital led the investment round alongside R/Crypto Fund, Dragonfly, CMS Holdings, Collab+Currency, and Lvna Capital. A group of unnamed angel investors and family offices were also involved in the sale according to a press release. 

“This will go to fostering the growth of the DeFi ecosystem, NFTs, collectables, and also some new innovative systems that are coming out on top of this,” said Emin Gün Sirer, co-founder and CEO at Ava Labs, the technology firm responsible for the development of Avalanche. 

Last month, Avalanche rolled out a $180 million liquidity mining incentive scheme to lure more DeFi developers to its growing ecosystem.

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