Stablecoins Advance as Zcash and Starknet Face Deepening Crises

WASHINGTON — Bitcoin (BTC) dipped 2% to $89,900, falling back below the psychologically important $90,000 mark, while Ethereum (ETH) dropped 3% to $3,100 and Solana (SOL) declined 3% to $134. XRP recorded the steepest decline among major large-cap assets, falling 7% to $2.08.

Against that market pullback, Wyoming has made its first state-issued stablecoin, the “Frontier” stable token, available to the general public. Managed by the Wyoming Stable Token Commission, the initiative stems from legislation passed by the state in 2023. The fiat-pegged token is an unprecedented effort by a U.S. state government to compete directly in the stablecoin market, which has historically been dominated by private issuers such as Tether and Circle.

JPMorgan Chase & Co. plans to deploy its proprietary JPM Coin on the Canton Network. Launched by technology firm Digital Asset with a consortium of financial institutions including Goldman Sachs and Cboe, Canton is a privacy-enabled, interoperable blockchain designed for institutional assets. JPM Coin operates under JPMorgan’s Onyx division and has already processed hundreds of billions of dollars in wholesale transactions.

The Canton integration is expected to facilitate seamless cross-institution settlement. Separately, British banking giant Barclays has made a strategic investment in Ubyx, a U.S.-based stablecoin settlement startup developing institutional-grade infrastructure for regulated financial firms to transfer digital currencies across different issuers, networks, and custody wallets.

World Liberty Financial, a decentralized finance project closely associated with the family of President-elect Donald Trump, is also seeking closer alignment with federal banking. A subsidiary has formally applied for a national trust bank charter with the Office of the Comptroller of the Currency (OCC). If approved, the charter would allow the entity to custody assets and issue its planned USD1 stablecoin within a federally regulated framework.

The Senate Banking Committee is preparing for a highly anticipated vote next week on comprehensive crypto market structure legislation. The pending bill aims to establish clear regulatory jurisdictions between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), a long-sought milestone for the digital asset lobby in Washington.

Decentralized projects are facing a different set of pressures. Zcash (ZEC), a pioneer in privacy-focused cryptography launched in 2016, saw its token price plummet 19% after a sudden governance crisis. Its core developer team resigned en masse following a protracted dispute with the governing board.

Zcash uses zero-knowledge proofs (zk-SNARKs) to shield transaction details, and its development has historically been guided by the Electric Coin Company (ECC) and the Zcash Foundation. After the split, the departing development team announced plans to form a new, independent enterprise to continue building privacy-preserving software, leaving the immediate future of the primary Zcash protocol’s development roadmap in question.

Starknet, a prominent Layer 2 scaling network built on Ethereum, suffered a severe multi-hour outage. Developed by StarkWare, the network uses cryptographic validity rollups to process transactions off-chain before settling them on the Ethereum mainnet. A bug in its block production mechanism brought the network to a complete halt.

Validators were forced to pause operations and execute a network rollback before normal block production resumed, raising fresh concerns regarding the liveness and decentralization of Layer 2 sequencers. The disruption came as institutional adoption and sovereign regulatory frameworks accelerated, even as established decentralized protocols dealt with governance crises, technical failures, and a broader market downturn.

Over the past 24 hours, the crypto market experienced a widespread pullback, with Bitcoin slipping below the $90,000 threshold. Yet some assets moved higher: privacy-centric Monero (XMR) rose 3%, possibly buoyed by the governance uncertainty surrounding its competitor, Zcash. Litentry (LIT) and the World Liberty Financial (WLFI) token also bucked the downward trend, both posting 3% gains on the day.