The Briefing Memo

December 2025 - If you’re new here, welcome to The Briefing Memo, which features the latest insights and updates from The Venture Dept., the friendly former regulators on the cap table. If this newsletter has been forwarded to you, you can subscribe here.

Quick programming note: Matt will be in Boston next month to speak at the 32nd Annual Venture Capital & Private Equity Conference, a student-run conference at Harvard Business School on Saturday, January 31, 2026. If you’ll be around please reach out!

Regulatory Developments - Continued Good News

Holy hell, the future is here. The SEC has given the DTCC, which processed securities transactions valued at $3.7 quadrillion in 2024, a no-action letter to run a three-year pilot that tokenizes U.S. securities on approved blockchains, including Russell 1000 stocks, ETFs, and Treasuries, while preserving all existing legal rights and investor protections. This is permission to rip and replace the pipes that settle most U.S. stock and bond trades to mint, burn, and record “digital twins” of traditional securities on L1/L2 networks under a regulated framework. This is, without understating it, a moment that changes everything. Let’s get out there and build.

The Fed has withdrawn its 2023 guidance that limited Board-supervised state-member banks in what they could do in crypto. The Fed now says it’s learned a lot and if you would take them back, it would never do it again.

The FDIC Board approved a notice of rulemaking for depository institutions to apply for approval to issue stablecoins through specialized subsidiaries. The move would allow the FDIC to conduct safety and soundness checks (i.e. prudentially regulate them). Glad to see Choke Point 2.0 has been choked out.

The OCC last week granted conditional national trust bank charters to Circle, Ripple, Paxos, Fidelity, and BitGo. New York DFS was the first regulator to oversee crypto, beginning over a decade ago in mid-2015. Until now, DFS was really the only game in town and, not for nothing, they’re tough. Notoriously slow to grant licenses and charters and deeply scrutinous, if you’ve gotten its approval, you’ve shown your mettle and you can play in New York. But now, the OCC has opened a door for a different regulatory path, no DFS necessary. Seems like the trend is going national, though many are hedging their bets and maintaining multiple charters, fearing potential changes under a future administration. 

Public Service Announcement

We entering rulemaking season in DC for the GENIUS Act, with more rules hopefully on the horizon for other topics as well. Rulemaking, for those who aren’t familiar, is the process of turning laws into an actionable set of rules that can be implemented by an agency or set of agencies. The drafters of rules, generally agency staff, do their best to translate the will of Congress into a practical and workable set of rules, but they rely extensively on public input to do this. There’s an official process for providing input, which is generally laid out in the form of a Advanced Notice of Public Rulemaking (ANPR) or Notice of Public Rulemaking (NPR). These documents describe the agency’s intentions and ask an enumerated set questions. Drafters are obligated to consider every submission and explain why why they have or haven’t adopted the suggestions they receive. As a former FDIC staffer Matt can attest to this having reviewed many such comment letters himself.

Why are we issuing this public service announcement now? Well, the FDIC just dropped an NPR “soliciting comments on a proposal that would establish procedures to be followed by an insured State nonmember bank or State savings association (each, an FDIC-supervised institution) that seeks to obtain FDIC approval to issue payment stablecoins through a subsidiary pursuant to the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act).” Here are a few cherry picked questions they ask:

• Does the proposed rule adequately reflect the application process outlined by Congress in the GENIUS Act?

• How could the proposed rule be improved to better align with the GENIUS Act’s application requirements?

• What information can best demonstrate the appropriate composition, custody, and valuation of the reserve assets backing the payment stablecoin?

We encourage builders in the space to review proposed rules, which can provide insight into regulators’ priorities and approach. Coordinating through a trade association you belong to is often an efficient way to provide input without preparing a standalone submission, though a direct filing may be appropriate if you have a strong, specific view on an issue.

News

TradFi, after being skeptical, dismissive, and late, is coming to the crypto table. Vanguard is also now allowing their (50 million!) customers to have crypto exposure through ETFs. We’re further buoyed by the news that Bank of America has recommended its wealth clients build crypto positions of 1-4% in their portfolios, which follows Morgan Stanley’s recent 2-4% allocation recommendation. How significant is this? BofA manages about $1.7T in client assets and Morgan Stanley’s AUM is about $8.2T. [Scribbling on napkin]... that’s a lot of additional capital coming into the space if folks follow their brokers’ advice. Extrapolating, $145T or so is at all American brokerage houses. Wouldn’t we all like to see just 4% of that allocated to crypto?

A new academic paper documents that U.S. public pension funds have already begun taking crypto exposure. Across 17 surveyed funds, the authors estimate approximately $3.32 billion of cryptocurrency exposure as of end-Q2 2025, primarily via cryptocurrency-linked equities and ETFs, with exposure present across multiple named systems including CalPERS, the New York State Common Retirement Fund, and the Teacher Retirement System of Texas.

Speaking of about-faces on crypto, how about Larry Fink eating crow? After famously deriding crypto as only useful for scammers and thieves (and BTC as an index for money laundering, the BlackRock chair has “evolved” his idea around bitcoin. Interestingly, he calls it an “asset of fear,” which, going back to why Satoshi created bitcoin in the first place, seems correct. Fink also believes tokenization is going to drive the next generation of financial markets, with stablecoins as part of the plumbing.

We’re on the same page, as is Bank of America and SEC Chair Atkins, who predicts full stock market tokenization within two years. Wow!  

Our friends at Cross River Bank have launched stablecoin pay-in/pay-out functionality directly through its core deposit accounts, effectively stitching stablecoins into the heart of a U.S.-regulated bank’s balance-sheet plumbing. This isn’t another API wrapper around someone else’s crypto rails; it’s a true integration of fiat and tokenized dollars inside the bank’s core ledger. The result is a single, interoperable system that lets companies move value across blockchain networks and traditional payment rails while remaining inside a bank-supervised, compliance-first environment. This is a watershed moment because it marks the first time a U.S.-regulated bank has put core deposit accounts on-chain, not as a sidecar experiment but as part of its primary architecture. For institutions watching the line between money and networks blur, this is the clearest signal yet that traditional banks will not cede the tokenized-money future to fintechs or non-banks. Keep it up, Cross River! For other banks looking to do something similar give Davis Hart at Omnia a ring.

Galaxy, meanwhile, has issued on the Solana blockchain $10mm in commercial paper, with JPMorgan acting as arranger (and also created the on-chain token). Coinbase and Franklin Templeton were the buyers. Really enjoying seeing TradFi and crypto natives coming together. Kumbaya.  

Portfolio Company Updates

Uniform Labs’ new Multiliquid protocol is a huge strategic development because it directly tackles one of the biggest bottlenecks in today’s digital finance: the lack of seamless, institutional-grade liquidity between tokenized real-world assets and stablecoins in a market already worth tens of billions of dollars and rapidly growing. Multiliquid goes live in production offering instant swaps between tokenized money market funds and stablecoins, filling a structural gap that has kept tokenized assets isolated in siloed pools and slow redemption processes that discourage institutional participation, precisely when demand for compliant, programmable liquidity is surging under tightening regulation and institutional adoption. Go, Will!

Superstate unveiled its Direct Issuance Program this week, a move that could quietly redraw the map for how capital is raised and how investment products are born. Instead of routing new funds through the legacy gauntlet of intermediaries, DIP lets issuers create digitally native investment vehicles; think tokenized treasuries, credit products, and future structured assets directly on-chain while remaining fully inside the regulated perimeter. It’s the first real glimpse of a world where fund formation, investor onboarding, compliance, and secondary liquidity collapse into a single programmable layer: instant, transparent, global, and open 24/7. For those tracking where tokenization stops being a demo and becomes financial infrastructure, Superstate just planted a flag.

Predicate founder Nikhil Raghuveera found himself presenting at an SEC roundtable, and comes away believing that industry and the regulators (!!) are aligned that “open blockchains and DeFi are the future of finance, privacy is essential to protect users and advance institutional adoption, and that we can solve compliance risk with smart contract-level controls, without undermining the permissionless nature of blockchains and DeFi.” Yes, please.

Portco Haraka was recently featured for its work with Mercy Corps delivering stablecoin-based loans to farming cooperatives in Northern Ghana. The pilot showed that DeFi lending using local-currency stablecoins can provide fast, low-cost, and reliable credit in mobile-first, low-bandwidth environments. This reduced loan disbursement times from 3–7 days to under 5 minutes. A follow-up study, in collaboration with UC Berkeley and the Gates Foundation, is scheduled to launch in Q1 2026.

Listens and Reads

The New York Fed issued an interesting article that explores how the future of payments infrastructure could be permissionless. For such a system to work, the authors give three criteria that are necessary: (1) universal settlement access; (2) open programmability to add new features and blockchains; and (3) innate composability as a defining feature. The article warns of three hurdles to overcome before we can see broad adoption: (a) lack of regulation, which breeds mistrust; (b) difficult-to-understand technology; and (c) the absence of transaction privacy. This is all in addition to the safety, resiliency, and efficiency issues inherent in permissionless networks. Lots of work to do, and lots of opportunities for building solutions against this rubric.

Also worth a read: Dave Taylor’s “Stablecoins Are Not Enough,” which argues that the stablecoin economy is effectively a USD monoculture (roughly 99% dollar-pegged) and that global adoption will require non-USD, yield-bearing primitives. His proposed “Stablebonds” are local-currency tokens backed by short-duration sovereign debt that embed native yield and are designed to function like stablecoins in DeFi, including as collateral and as building blocks for deeper onchain FX markets.  

And give a listen to the Rebank podcast ep below, where you can hear about what Fund 1 portco Stable Sea is up to (hint: B2B treasury movement and access to tokenized money for emerging market businesses).

Stable Sea also announced its Enterprise API, which allows businesses to embed stables into their existing treasury and payment systems. It’s also had multiple wins recently (really serious wins) - stay tuned for when we can let the cat out of the bag. Oh man - congrats to founder Tanner Taddeo! And thanks again to Will Beeson, for being a great host and providing a platform for deep dives into where tech and finance are going.

We plan to spend some time over the holiday break watching the recent slate of speeches from our friends at Multicoin. Their annual event is always one of the best.

Finally, we want to thank you all for giving this a read and spending a little time with your friendly, neighborhood former regulators turned venture. Here’s to a happy, safe, and successful 2026!

^{_{Disclaimer: The information in this newsletter is provided solely for general informational purposes and reflects the author’s personal views at the time of publication. Nothing herein should be construed as investment advice, legal advice, or a recommendation to engage in any transaction or strategy. Readers should consult their own professional advisors before making any financial, legal, or other decisions. All information is provided “as is,” without any representation or warranty of any kind.}}