Welcome back. 👋 Each week we cut through the noise and explain what’s driving crypto. This week’s edition covers new pilot programs, advancing regulatory drafts, and fresh moves from JPMorgan as institutions continue to push crypto adoption forward.

- Validator Digital

Crypto markets have begun to show signs of positive direction after several weeks of side ways action. Bitcoin has pushed back toward the low-$90K range, holding gains more consistently than before, while broader market participation has improved.

Zooming out, the market still isn’t in full breakout mode, but conditions are clearly improving. Positive net inflows into crypto ETFs over the past two weeks suggest fresh demand is returning, reinforcing the view that momentum is slowly rebuilding as we move into the new year.

What Happened
DTCC, one of the most important financial institutions in the world, announced it will run a pilot to digitize U.S. Treasury securities using blockchain technology. The project will use the Canton Network and focuses on bringing government bonds onto modern digital rails.

What DTCC is
DTCC is the behind-the-scenes system that makes U.S. financial markets work. It helps ensure that when stocks or bonds are traded, money and assets actually change hands correctly, processing trillions of dollars in transactions every day. If DTCC adopts a new system, it usually means the rest of Wall Street eventually follows.

What the Canton Network Provides
The Canton Network is a blockchain built specifically for banks and large financial institutions. It allows assets to move digitally while still meeting strict rules around privacy, security, and compliance. In simple terms, it lets traditional finance use blockchain without breaking the rules that regulators require.

Why this Matters
This is a meaningful step toward making financial markets faster, cheaper, and more global. If U.S. Treasuries can move digitally, they can settle quicker, be used more flexibly, and integrate more easily with modern financial products. Over time, this could reshape how capital moves around the world and accelerate the shift from legacy systems to blockchain-based infrastructure.

Stablecoins grow 50% in 2025
The chart above shows that despite a relatively flat year for the broader digital asset market, one corner performed exceptionally well. Stablecoin market capitalization has grown to $311 billion, representing 50% growth year-over-year. Even more telling, U.S. Treasury Secretary Scott Bessent now projects the market could reach $3 trillion by 2030.

As blockchains take on more apps, assets, and activity, the main network can get crowded. A Layer 2 is a separate system built on top of a blockchain that handles most of the work, then sends the final results back to the main chain.

Imagine a crowded restaurant where every order must go through the head chef. Even a simple coffee waits behind a five-course meal. That’s Ethereum when all transactions compete on the main chain. A Layer 2 is like adding a skilled sous-chef with a well-run prep station. Most orders are prepared off to the side, then the finished plate and a quick “ticket” go to the head chef for a final check.

In practice, Layer 2s bundle many transactions and post a single summary to the main chain, along with proof that the work was done correctly. You get more speed and lower fees, while the base blockchain remains the final source of truth.

Layer 2s turn one crowded blockchain into a network of faster side streets that feed into the same secure highway. But once people start using multiple chains and Layer 2s, they need safe ways to travel between them. Those routes are bridges — up next in our journey.

Next Week: What is a Bridge?

Last Week: What is an NFT?

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See you next week,

Don’t speculate, validate.
- Validator Digital

Disclaimer: Individuals have unique circumstances, goals, and risk tolerances, so you should consult a certified investment professional and/or do your own diligence before making investment decisions. The author is not an investment advisor and may hold positions in the assets covered. Certified professionals can provide individualized investment advice tailored to your unique situation. This newsletter is for general educational purposes only, is not individualized, and as such should not be construed as investment advice.