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In This Week's Edition:
🚀 Rain buys Ansa and moves into stored value.
🏛️ The SEC to write Reg Crypto before Congress does.
💸 Nasdaq buys an ATS route to overnight trading.
🚀 Fidelity files to bring staking yield into FETH.
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🚀 Rain Buys Ansa and Takes On the Balance Before the Card
Rain earns a second slot in two weeks because buying Ansa moves it out of clearing the transaction and into the balance that sits before it.
Ansa built the Starbucks wallet for everyone else. Customers preload money into a merchant-specific balance and spend it back with that merchant. In-store purchases can run through existing Mastercard terminals without replacing the POS.
Key Points:
Balances are meant to travel: Rain says partners will be able to extend Ansa value beyond the merchant that issued it using its Visa and Mastercard relationships.
Rain, valued at $1.95 billion in January, keeps buying around the card stack: Uptop brought rewards, Fern added fiat and stablecoin routing, and Guardrail brought transaction security in-house. Ansa adds stored value.
Ansa disclosed $19.4 million across its first two announced rounds: $5.4 million when it emerged from stealth in April 2023, followed by a $14 million Series A in April 2024.
Cashi chose Thredd the same week: Its stablecoin spending card is live in Hong Kong, with Mexico planned for late 2026.
The Tokenized Take
The consensus take is that stablecoins are disappearing underneath familiar wallets and cards. But Ansa changes something more interesting - the liability Rain can touch.
Card infrastructure clears transactions. Stored value holds customer money before the transaction, and some of it may never be redeemed.
A customer loads $100 today and spends it over the next month. Until then, the merchant owes that customer goods/services. If part of the balance goes unused, some of that liability can eventually become revenue through breakage.
Let that balance spend somewhere else and the economics change. Redemption rates rise while breakage falls, and third-party acceptance can create a cash settlement obligation the brand did not have when value stayed inside its own stores.
But the transaction does not leave Rain’s stack. Once that balance travels outside the merchant, Rain already has Principal Membership with Visa and Mastercard to carry it.
Loyalty exchange is not new. Points.com ran it for two decades. What is different here is putting merchant-funded stored value, rewards and open-loop acceptance inside one payments stack.
That makes Ross Basri’s comments on our Episode 88 worth revisiting. Speaking about his own longer-term play, rather than announcing Rain corporate strategy, the Uptop co-founder described a centralized liquidity facility across Rain programs that could let tokenized rewards interoperate. He also pointed to stablecoin co-brand cards for sports and entertainment brands with global audiences that traditional card programs struggle to monetize.
Ansa gives that vision a prefunded merchant balance to work with.
The harder problem is the CSBS Money Transmission Modernization Act (MTMA). Its model language protects two different structures. Customer-funded value gets an exclusion when it remains closed loop. Loyalty and promotional value gets another when it is not sold to the public.
Ansa today resembles the first. Customers buy the balance and spend it with the issuing merchant. Raindrops resemble the second.
Make Ansa broadly spendable and it becomes less closed loop. Make rewards liquid and transferable and they become more money-like.
Neither change would automatically trigger money transmission, but both weaken the facts supporting the existing exclusions. Where the line falls will depend on how Rain structures the programs and how state regulators interpret them.
Mature airline programs have more to protect. Breakage, transfer controls and redemption economics are already embedded in billion-dollar loyalty liabilities. The cleaner customer is the sports team, entertainment brand or marketplace whose balances have never left the marketing database.
The test arrives with the first Ansa balance that spends somewhere it wasn’t issued.
🏛️ SEC To Move Ahead With Its Own Regulation Crypto
The SEC meets Friday to consider proposing Regulation Crypto Assets (Reg Crypto), an offering regime for certain crypto investment contracts.
CLARITY contains a rule with the same name. Based on what Atkins previewed in March, the two are not the same.
Key Points:
A vote to propose, not an exemption. Friday, 10:00 ET, one agenda item from the Division of Corporation Finance. A successful vote opens public comment. A final rule would require further Commission approval before taking effect.
CLARITY already names it. Section 103 creates an exemption called Regulation Crypto for ancillary assets offered in connection with an investment contract. The SEC would have 360 days from enactment to adopt it.
The limits differ. Section 103 allows the greater of $50 million per calendar year over four years or 10% of outstanding ancillary assets, capped at $200 million gross. Atkins previewed roughly $5 million over four years under a startup exemption and $75 million over twelve months under a larger fundraising exemption.
Most of CLARITY sits outside an offerings rule. No CFTC spot-market jurisdiction, no stablecoin reward rules, no developer protections.
September 15 is the next test. Cloture on the motion to proceed requires 60 votes. Galaxy's 2026 passage estimate is down from 50% to 30%, reported August 10.
The Tokenized Take
In April, we read Reg Crypto and CLARITY as converging into one regulatory stack. Instead, the SEC is shipping its own version of one module before Congress settles the statutory one.
That module matters. Proposed text gives token issuers something to analyse, comment on and design around. A final rule would also be harder to reverse than the interpretive guidance we were working from in March.
Friday's proposal uses the SEC's existing authority. CLARITY would create a separate statutory version of Regulation Crypto with different thresholds. If both survive, issuers may have to navigate two different sets of offering rules over time.
And an offerings rule cannot tell an exchange which regulator owns spot trading, settle the rules on stablecoin rewards or give developers the protections Congress is still debating. For banks and exchanges, those questions decide which products can launch and which business models stay investable.
With three commissioners and no Democrat seated, the comment period becomes the main public venue for challenging the assumptions behind the proposal. If you plan to build on Reg Crypto, that is the window to shape it.
The SEC may give issuers permission to move before Congress gives the market somewhere certain to go. September 15 tells us how long that gap lasts.
💸 Nasdaq Buys LeveL While Its Own Overnight Exchange Waits on the Tape
Four days after the SEC kept 24X from opening its overnight exchange ahead of the consolidated tape, Nasdaq agreed to buy LeveL Markets. Nasdaq is waiting on the same market-data infrastructure. LeveL does not trade overnight today, but it sits inside the ATS framework already used for overnight US equity trading.
Key Points:
LeveL is a major institutional ATS: Third largest in the US by volume, with 2,500+ clients and 300+ institutional buy-side firms. Deal terms were not disclosed.
It does not trade overnight today: LeveL currently operates during regular market hours and will remain a separate FINRA-regulated ATS after the acquisition.
Nasdaq is still waiting to launch 23/5: Its overnight exchange session has SEC approval, but cannot start until the consolidated tape supports overnight trading.
December 6 is the target: The SEC approved the extended consolidated-tape hours on June 26, with the new overnight coverage scheduled to go live on December 6, 2026. Nasdaq’s exchange can only start its Night Session once that infrastructure is ready.
The Tokenized Take
Nasdaq has permission to trade overnight and cannot use it. Every exchange is waiting on the same consolidated tape.
LeveL does not trade overnight today. But it gives Nasdaq a faster route to get there. Extending an ATS’s hours requires a public filing ahead of launch. Nasdaq’s exchange, by contrast, has to wait for the consolidated tape and then clear another SEC rule change. Same destination, two queues.
24X is a new SEC-approved exchange built for near-24-hour stock trading, and it hit this wall first. Its December application asked to open overnight before the consolidated tape was ready. It warned that if the answer was no, incumbent exchanges could simply buy ATSs and get there sooner. The SEC said no on August 7. Nasdaq agreed to buy LeveL four days later.
At the same time, Nasdaq is also building the infrastructure its own exchange is waiting for. It filed the overnight price-band framework on behalf of the whole market, including NYSE, Cboe and 24X. Nasdaq is pursuing both routes at once.
Nasdaq’s approved plan gets it to 23/5 by extending the existing exchange day. It does not get it to 24/7. The model still pauses each evening to roll the trade date, process corporate actions and reset the market. Tokenization attacks a different problem: ownership and settlement do not have to stop just because the conventional market does. That is why putting execution and tokenization under one manager starts to make sense.
For trading desks there is a nearer-term issue. You still owe best execution overnight, without the benchmark you use to prove it. There is no protected NBBO in those hours and Rule 611 trade-through protection does not apply outside regular trading. As overnight liquidity grows, venue selection becomes an execution-policy question rather than a market-structure experiment.
Watch LeveL’s SEC filings. Its Form ATS-N is file 013-00192, and a material change to its trading hours has to be filed there at least 30 days before it takes effect.
🚀 Fidelity Files to Put Staking Inside FETH
Fidelity is moving to add staking to its existing Ethereum fund, FETH. An August 7 trust amendment gives the fund the ability to stake, just three days before an IRS transition window for existing trusts closed. If the proposal becomes effective, Fidelity could stake up to 100% of FETH’s ETH under normal conditions, while keeping enough liquid for redemptions, expenses and liquidity management. The August 11 filing is still preliminary, so staking is not yet live.
Key Points:
FETH keeps its 0.25% sponsor fee. Fidelity, its custodians and node operators would take 15% of gross staking rewards, leaving 85% with the trust.
Fidelity expects to convert net staking rewards into dollars and distribute them quarterly. The IRS safe harbor requires distributions at least quarterly.
The filing sets 100% as a ceiling with no minimum commitment. As of August 13, 2.29 million ETH was waiting to enter Ethereum's validator set, with an estimated wait of just under 40 days.
The Tokenized Take
Simon's August 2025 Market Readout called the SEC's staking stance the clarity that opened a category Wall Street had been reluctant to touch, and asked whether institutions should start treating staking as a treasury and yield opportunity. The answer arrived from a different agency. The SEC opened the category; the IRS shaped the product.
Revenue Procedure 2025-31 gave existing trusts nine months from November 10, 2025 to amend their governing documents. Grayscale amended its Mini trust on August 6, Fidelity followed on August 7, and the window closed on August 10. Both rewrote their trust documents in the same week because the tax code now sets the terms on which staking can sit inside an Ethereum trust.
Fidelity also made a different product choice from BlackRock. BlackRock preserved ETHA, with $5.64 billion of net assets as of August 12, as its non-staking wrapper and put staking into a separate product, ETHB. Fidelity is retrofitting FETH itself. If the proposal becomes effective, holders who do not want quarterly ordinary income or staking risk have no second Fidelity ETH ticker to switch into. Retrofitting the existing product is a clear evidence that staking is becoming table stakes.
Once staking is standard, the expense ratio only tells part of the story. We use Tokenized Net Capture.
Net Capture comes down to three things: 1) how much ETH the fund actually stakes, 2) how much of the staking reward reaches the trust, and 3) what the fund charges on top. The formula and assumptions sit below the table.
Grayscale shows why. Grayscale's Mini and ETHE hold the same asset and stake almost identical proportions of it, ~80% each. But Mini passes 94% of staking rewards through and charges 0.15%, while ETHE passes through 77% and charges 2.5%. At the same 2.66% base staking rate (current ETH network staking rate), Mini adds roughly 1.85% after those costs; ETHE returns negative 0.85%, a gap of 2.7 percentage points inside one fund family.
Same amount of ETH working. Very different amount reaching the investor.
The gap matters more because staking yields have compressed. With 33.98% of ETH now staked, the seven-day APR was 2.66% on August 4, roughly half its June 2023 level. At 5.06%, ETHE's staking economics could still clear its sponsor fee. At 2.66%, they do not.
Fidelity’s proposed staking layer is more expensive than either modern rival. FETH would give up 15% of staking rewards, vs. 10% at BlackRock’s ETHB and 6% at Grayscale Mini. Fidelity’s answer is to stake more of the portfolio. But getting more ETH to work takes time when Ethereum’s validator queue is backed up.
If FETH cannot maintain a higher staking ratio than its cheaper peers once the programme is live, that 15% cut will show up as a recurring total-return gap.
Tokenized Net Capture
Product | Staking fee stack | Sponsor fee | Staking participation | Net Capture @ 2.66% base APR |
0.15% | 80.12% as of Aug. 11 | ~1.85% | ||
15% | 0.25% | Up to 100% | Up to ~2.01% (at full participation) | |
0.25% | 86.9% as of Jun. 30 | ~1.83% | ||
2.50% | 80.51% as of Aug. 12 | ~-0.85% |
Tokenized Net Capture footnote:
Formula: Net Capture = Staking participation × base staking APR × investor reward share - sponsor fee.
Assumptions: Illustrative and pre-tax. We use the same 2.66% base APR across every product to isolate the economics of the wrapper. Realised validator yield can differ by operator and include execution-layer and MEV rewards.
Assumes stated/current participation and excludes compounding, slashing, extraordinary costs and changes in staking rewards.
Product caveats: FETH remains proposed and 100% is its ceiling, not expected launch participation. ETHB's 0.25% sponsor fee is temporarily reduced to 0.12% on the first $2.5bn for twelve months from March 12, 2026, adding roughly 13bp while the waiver applies
📰 Some More News:
🏦 Tokenization, Stablecoins & Finance
Coinbase Enables Businesses to Get Paid by AI Agents (Read more here)
Broadridge's Distributed Ledger Repo Processes $8.0 Trillion in July (Read more here)
Bank of England tests stablecoin, digital pound interoperability in cross-border payments (Read more here)
Standard Chartered-led Anchorpoint launches Hong Kong dollar stablecoin (Read more here)
HashKey begins beta distribution of Hong Kong-regulated HKDAP stablecoin (Read more here)
Zerohash Connects Financial Institutions to Robinhood Chain (Read more here)
Payments platform Decta explores stablecoin-enabled treasury settlement (Read more here)
Grvt eyes $100 million USDY position in Ondo Finance tie-up (Read more here)
MUFG PoC to bring Japanese government bond repo transactions onchain (Read more here)
Ether.fi adds tokenized stocks, metals and Aave-powered portfolio loans in latest ‘neobank’ expansion (Read more here)
Figure revenue doubles as blockchain loan marketplace volumes surge (Read more here)
Securitize’s Tokenized Assets Hit $4.3 Billion as Revenue Falls (Read more here)
Brazil's largest lender Itaú is stepping deeper into the tokenization (Read more here)
ADI Chain, Shipfinex partner to tokenize $500M vessel pipeline (Read more here)
Tokyo Lawson Register Scans a Barcode for a 322-Yen JPYC Stablecoin Payment (Read more here)
🤑 Funding and M&A
Goldman Sachs to acquire ETF manager NEOS in $2.25B deal (Read more here)
Mirae Asset to inject additional $35 million into Korbit crypto exchange following July acquisition: report (Read more here)
EToro to buy TradeZero as Q2 crypto revenue falls 30% (Read more here)
Crypto-friendly bank Erebor in talks to raise $1.5 billion at $9.5 billion valuation: FT (Read more here)
Robinhood Private-Market Fund Prices $200 Million IPO (Read more here)
💼 Government & Policy
SEC Staff Clears Franklin Funds to Use Onchain Money Fund for Cash and Collateral (Read more here)
Coinbase to launch tokenisation hub in Abu Dhabi (Read more here)
Slovenia joins EU’s MiCA stablecoin register with first issuer (Read more here)
Copper US arm becomes FINRA member, SEC-registered broker-dealer (Read more here)
ARP Digital secures Dubai VARA broker-dealer license (Read more here)
Blockchain Association backs Custodia’s Supreme Court bid over Fed master account access (Read more here)
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Disclaimers
This newsletter is for informational purposes only and is not financial, business or legal advice. These thoughts & opinions and do not represent the opinions of any other person, business, entity or sponsor. Any companies or projects mentioned are for illustrative purposes unless specified.
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