The Daily: US Senate votes to repeal controversial crypto tax rule, Ethereum edges closer to deploying Pectra and more

The following article is adapted from The Block’s newsletter,  The Daily , which comes out on weekday afternoons.

Happy Thursday! Not wanting to miss out on the latest ChatGPT Studio Ghibli craze, The Block took a break from the news earlier this morning and spent a few very productive hours Ghiblifying our team photos — check them out !

In today's newsletter, the U.S. Senate votes to repeal a controversial crypto tax rule, Ethereum edges closer to deploying Pectra, JPMorgan sees yield-bearing stablecoins growing to 50% market share and more.

Meanwhile, Senators grill Trump's SEC nominee , Paul Atkins, over his FTX ties and the agency's missteps under former Chair Gary Gensler.

Let's get started.

US Senate votes to repeal controversial crypto tax rule

The U.S. Senate voted 70-28 late Wednesday to repeal a controversial Internal Revenue Service crypto tax rule finalized just weeks before the Trump administration took office.

• Sen. Ted Cruz, R-Texas, and Rep. Mike Carey, R-Ohio, introduced the joint resolution to repeal the rule that would have required "decentralized finance industry participants" to operate like traditional securities brokers, mandating that they collect and report user trading data.
• According to the U.S. Treasury Department, the rule applied to front-end service providers that operate primary websites to access a decentralized protocol rather than the protocol itself.
• President Trump is now expected to sign the repeal into law under the recommendation of White House crypto czar David Sacks and other senior advisors.
• While the Senate had already voted earlier this month to overturn the rule, followed by the House, as the measure was tied to a budget provision, a final Senate vote was required before it could be sent to Trump's desk.
• The repeal garnered some bipartisan support, including from Senate Minority Leader Chuck Schumer, though most backing came from Republicans.

Ethereum edges closer to deploying Pectra

Ethereum developers have successfully deployed Pectra on the new Hoodi testnet , marking the potential final step before mainnet deployment of the upgrade, which focuses on improving scalability, staking and user experience.

• Hoodi was specifically created on March 17 to finalize Pectra testing after earlier deployments on the Holesky and Sepolia test networks faced configuration bugs, network instability and synchronization issues.
• Hoodi will now permanently replace Holesky, which is set to be deprecated later this year.
• If no major issues arise, Pectra could be deployed on Ethereum's mainnet in late April or in May or June if more testing is required.

JPMorgan sees yield-bearing stablecoins growing to 50% market share

JPMorgan analysts predict yield-bearing stablecoins could grow from 6% to 50% of stablecoin market share in the future.

• Such stablecoins offer similar returns to traditional money market funds, with demand fueled by crypto trading platforms accepting tokenized Treasurys as collateral and adoption of the assets in decentralized finance to obtain higher yields, the analysts said.
• The top five yield-bearing stablecoins — Ethena's USDe, Sky Dollar's USDS, BlackRock's BUIDL, Usual Protocol's USD0 and Ondo Finance's USDY — have seen rapid growth since the U.S. election in November, rising from around $4 billion to over $13 billion in combined market cap, JPMorgan Managing Director Nikolaos Panigirtzoglou told The Block.
• The analysts did not provide a specific timeframe for reaching the 50% market share, noting that this trend could take years, given the regulatory hurdles and the dominance of traditional stablecoins.
• Traditional stablecoins, such as Tether's USDT and Circle's USDC, do not share reserve yields with their users because doing so would classify the assets as securities, according to the analysts.

LINA price collapses as Linear Finance shuts down

DeFi protocol Linear Finance is shutting down due to "financial challenges" and struggles to "generate sustainable returns" since its 2020 launch.

• "The project has been funded through a combination of personal contributions from the project owner and token liquidations," read a notice on Linear's official Telegram channel. "Unfortunately, this model is no longer viable."
• Compounding matters, crypto exchange Binance announced last week it was delisting the project's native token, LINA, scheduled to take full effect on Friday.
• The delisting decision already resulted in a more than 50% reduction in LINA's market cap, falling from $14 million to around $6.5 million.
• LINA then dropped a further 36% following Thursday's closure notice, according to The Block's Linear price page .

SBF moved to 'Con Air' transit facility after unsanctioned prison interview

The disgraced former CEO of defunct crypto exchange FTX, Sam Bankman-Fried, has been moved to a transit facility in Oklahoma City , part of the Justice Prisoner and Alien Transportation System, nicknamed "Con Air," according to the Federal Bureau of Prisons.

• Bankman-Fried's transfer comes following an unsanctioned remote video interview with Tucker Carlson earlier this month at the Metropolitan Detention Center in Brooklyn, where Bankman-Fried has been held since August 2023.
• Bankman-Fried received a prison sentence of 24.25 years in 2024 after a jury found him guilty of seven fraud and money-laundering charges related to the $11 billion collapse of FTX.
• The majority of Bankman-Fried's sentence is likely to be served in a lower-security prison in California's Bay Area. He is scheduled for release on Nov. 17, 2044.

In the next 24 hours

• UK GDP figures are released at 3 a.m. ET on Friday. U.S. PCE data follow at 8:30 a.m.
• U.S. Federal Reserve Vice Chair Michael Barr will speak at 12:15 p.m. FOMC member Raphael Bostic follows at 3:45 p.m.
• Artificial Superintelligence Alliance and Moca Network are set for token unlocks .

Never miss a beat with The Block's  daily digest  of the most influential events happening across the digital asset ecosystem.