Good afternoon. The Senate Banking Committee advanced the CLARITY Act 15-9 yesterday, but the institutional story isn't the yield compromise everyone is leading with. It's the new "network token" category and the Reg Crypto exemption that finally gives tokenization desks a federal funding rail.

Meanwhile, BlackRock filed two tokenized funds, splitting the rails between BNY Mellon and Securitize. Hyperliquid's USDH experiment ended with Coinbase buying out Native Markets. And Grove launched a $1B-per-day liquidity layer for tokenized RWAs.

Chris, The Defiant contributing editor, and Partner at Storaker Advisory

Vast commodity reserves. Locked in the ground, locked out of markets. AetherStrike tokenizes them on-chain. Every commodity. Every risk profile. Putting the real in real world assets.

CLARITY Act Survives Markup. The Real News Isn't Yield.

Senate Banking voted 15-9 on Thursday to advance the Digital Asset Market Clarity Act to the floor. Sens. Ruben Gallego (D-Ariz.) and Angela Alsobrooks (D-Md.) crossed over. Sen. Elizabeth Warren filed 44 of the 130-plus amendments; none passed. The bill now heads to staff-level reconciliation with the Senate Agriculture Committee's parallel draft, with floor action expected in early June and the White House targeting a July 4 signing.

The yield compromise dominated mainstream coverage. That's the sideshow. The substantive change for institutional tokenization is buried in Title III: the Senate substitute creates two new asset types: 1) a "network token," a digital commodity that derives value from a distributed ledger, presumed non-security, 2) an "ancillary asset" category where the initial issuance can be an investment contract but the token itself isn't a security in secondary markets.

For BlackRock, Franklin Templeton, Securitize and their issuer clients, this is the legal architecture that lets a tokenization desk run a capital raise without dragging the token into the security perimeter forever.

Pair that with the new Regulation Crypto exemption — SEC registration relief for raising the greater of $50M per year for four years or 10% of outstanding ancillary asset value — and you have, for the first time, a federal funding rail for token issuers that doesn't have to route through Reg D or Reg A. James Seyffart at Bloomberg Intelligence told CoinDesk this could move the on-chain RWA market from ~$15B today toward $100B+ within three to five years.

Don't sleep on Section 604. It codifies FinCEN's 2019 guidance into statute — non-custodial software is not money transmission. Coin Center led its support letter with it. Post-Tornado Cash, that's the difference between DeFi front-end developers and federal indictments. It's also the only piece of the bill that credentialed DeFi advocacy groups uniformly celebrate.

Two risks worth watching on the floor. The bank lobby (ABA, Bank Policy Institute) lost the yield fight in committee and called the Tillis/Alsobrooks compromise "evasion"; expect floor amendments narrowing what "bona fide activities" means. And NASAA — state securities regulators — opposes Section 308's preemption of state law for digital commodities. That's the cleanest structural objection likely to surface in debate. Democratic floor strategy will be ethics-heavy: Van Hollen's amendment to ban sitting officials' crypto business ties failed 11-13 in committee but resurfaces on the floor. Getting to 60 means convincing roughly seven more Democrats — and the World Liberty Financial bank charter application is the precise pressure point they'll use.

Sources: Senate Banking Committee Releases 309-Page Clarity Act Draft • Senate Banking bill text • Section-by-section summary • CoinDesk markup recap (May 14) • Coin Center support letter • Davis Polk client update • NASAA concerns letter

TRADFI & FINTECH

BlackRock Files Two Tokenized Funds. One Bets on BNY. One Bets on Securitize.

Trade press read BlackRock's May 8 SEC filing as "Securitize again, after BUIDL." It's actually two filings. Treating them as one misses the most interesting choice BlackRock just made: the firm didn't pick a transfer-agent winner.

One filing is a Form 485APOS adding a tokenized share class to an existing $6.1B traditional money-market fund — the BlackRock Select Treasury Based Liquidity Fund (BSTBL). Ethereum-only at launch, ERC-20, and — the news — BNY Mellon Investment Servicing as the on-chain transfer agent. The SEC's Corp Fin staff statement in January 2026 made clear that tokenization doesn't change the legal character of a security; Davis Polk, Sullivan & Cromwell and Morgan Lewis read that as a green light for tokenizing share classes of existing registered funds rather than launching de novo blockchain-native vehicles. BSTBL is the first major test from a top-five asset manager. If approved, Vanguard, State Street and Fidelity have a 485APOS template.

The second filing is a standalone fund — the BlackRock Daily Reinvestment Stablecoin Reserve Vehicle (BRSRV). Multi-chain from day one, $3M minimum, Securitize Transfer Agent LLC running the public-chain register. The structural detail mainstream wires missed: BRSRV is engineered to hold stablecoin issuer reserves under the GENIUS Act regime. GENIUS bars stablecoin issuers from paying interest to holders. There is nothing stopping the issuer from parking reserves in a yield-bearing tokenized MMF and capturing the yield at the entity level. BRSRV is purpose-built for exactly that flow.

The interesting move is the dual rail. BSTBL runs on BNY. BRSRV runs on Securitize. No one inside BlackRock is willing to bet that a single transfer agent should own the entire institutional tokenization stack — and that hedge is more bullish for the category than another BUIDL clone would have been. Securitize, fresh off its May 4 FINRA approval to custody and atomically settle tokenized securities, plus the working Solana trading venue with Jump and Jupiter that launched a day later, now has every regulated piece of an on-chain IPO stack. The BlackRock filing validates the transfer-agent leg; the trading leg landed days earlier.

Notable absence: XRPL. Ondo, Kinexys by J.P. Morgan, Mastercard MTN and Ripple completed the first cross-border tokenized Treasury redemption on XRP Ledger the same week — but BlackRock's deployment plan is Ethereum and Solana. The institutional public-chain shortlist is consolidating. Larry Fink's 2026 chairman's letter compared tokenization to the internet circa 1996 and disclosed BlackRock now manages $65 billion in stablecoin reserves; Robert Mitchnick has framed 2026 as a "show-me" phase with a 24-36 month path to mainstream institutional use. These filings are the show.

Sources: BlackRock Files for New Tokenized Fund With SEC, Taps Securitize Again • Bloomberg (May 8) • CoinDesk (May 9) • CryptoSlate (GENIUS workaround) • SEC Corp Fin statement on tokenized securities (Jan 28, 2026) • Davis Polk client update • Larry Fink 2026 Chairman's Letter • Securitize FINRA approval

WATCH THIS WEEK

CLARITY Act: Who wins and who loses?

Lewis Cohen (Cahill) and Joseph Chalon (Sharplink) broke down the significance of this week’s development for the Clarity Act.

The most decentralized staking protocol just got a big upgrade.

Saturn One improves Rocket Pool's capital efficiency, helping node operators to stake with less ETH, while increasing capacity for liquid stakers. A withdrawal buffer stabilizes rETH prices and enables faster exits, while MEGAPOOL validators reduce bond requirements and increase yield for operators. The upgrade also introduces a fee switch for the RPL token, transforming it into an ETH-accrual token that captures protocol revenue instead of relying on inflationary rewards. Saturn One strengthens Rocket Pool’s decentralised staking model, improves economics for rETH holders, node operators, and RPL stakers, and lays the groundwork for future upgrades.

Now is the best time to stake your ETH with Rocket Pool.

OTHER STORIES WORTH YOUR TIME

Grove Launches Basin: Up to $1B/Day in Onchain Liquidity for Tokenized RWAs

Grove launched Basin, a DeFi protocol routing up to $1 billion per day of stablecoin liquidity against tokenized real-world assets. The pitch: institutional-grade RWAs — tokenized Treasuries, private credit, real estate — historically settle slowly back to dollars when investors want out, which caps the size of the on-chain RWA position serious capital is willing to take. Basin treats that as an infrastructure problem rather than a balance-sheet one. The launch lands in the same week as BlackRock's filings and Ondo/Ripple/JPMorgan's first cross-border tokenized Treasury redemption — the RWA stack is being filled out in parallel by different specialists.

Read more →

Coinbase Takes Hyperliquid's Stablecoin Rail. The Native-Issuer Bet Lost.

Native Markets — the startup that won Hyperliquid's September governance vote to issue USDH — agreed to sell its brand assets to Coinbase, ending the eight-month native-stablecoin experiment. USDC, already at roughly $5 billion of supply on Hyperliquid, becomes the canonical quote asset under an upgraded framework called AQAv2; Circle staked 500,000 HYPE as part of the deal. The economics tell the story: USDH never crossed $100M in supply against USDC's $5B, and the projected $150-220M of annual yield never materialized for the ecosystem. Coinbase will share "the vast majority" of yield — the same model USDH pioneered — but a startup is gone and an incumbent owns the rail. One user on X: "The honest read is the incumbent just bought the table."

Read more →

SG Forge's EURCV Surges 200% YoY as the Euro Stablecoin Category Gels

Societe Generale's digital-asset subsidiary SG Forge grew its euro-backed stablecoin EURCV by more than 200% year-over-year, per Token Terminal data published May 13. Onchain euros now total more than $760 million in supply, with 66% on Ethereum. The growth coincides with MiCA enforcement bedding in across the EU and the launch this quarter of the Qivalis consortium — 19 European banks including BNP Paribas, BBVA, ING and UniCredit — building a MiCAR-compliant common-rail euro stablecoin. The euro stablecoin market is becoming a real category, not a niche.

Read more →

Tokenized ETFs Cross $430M Onchain, Led by Ondo's S&P 500 Tokenization

Tokenized exchange-traded funds crossed $430 million in combined on-chain market cap, per Token Terminal. Ondo Finance's IVVon — a tokenized iShares Core S&P 500 — leads the category and is up roughly 150% month-over-month on Ethereum. The data point matters because tokenized equity exposure had been the slow part of the RWA build-out — Treasuries and private credit moved first. A tokenized SPY-equivalent crossing $430M is the proof that on-chain S&P 500 access is now a product, not a thesis. Pair this with Securitize, Jump and Jupiter putting tokenized U.S. equities on Solana the prior week — institutional equity exposure is being assembled on-chain through multiple lanes simultaneously.

Read more →

Circle Launches Agent Marketplace: USDC-Native Procurement for Autonomous Agents

Circle launched Agent Marketplace, part of its broader Agent Stack, designed to let autonomous agents discover and pay for trusted services using programmable, usage-based economic models. The setup is straightforward: agents with USDC balances need a structured way to procure services and settle payments; Circle is offering both the registry and the rails. This is the second AI-agent payments infrastructure shipment in two weeks — AWS launched Bedrock AgentCore Payments on Coinbase's x402 protocol days earlier, with the x402 Foundation now including AWS, Coinbase, Google, Stripe and Visa. Stablecoins are quietly becoming the default settlement layer for machine-to-machine commerce.

Read more →

Even more this week:

• Bitwise launches Hyperliquid Spot ETF (BHYP) on US exchanges — the second spot HYPE ETF available following Grayscale's offering.

• Privy launches Euphoria, a mobile-first derivatives platform — live on mainnet — gamifies crypto derivatives trading via social competition.

• 21Shares' Hyperliquid ETF Attracts $1.2M Inflows in US Debut — the third spot HYPE ETF to launch in the US, drawing a "very solid" opening day despite volumes trailing other recent crypto ETF debuts.

• JPMorgan Files Second Tokenized Money Market Fund for Stablecoin Issuers — the JLTXX fund on Ethereum is designed to satisfy GENIUS Act reserve requirements, positioning JPMorgan as a key plumbing provider for the regulated stablecoin ecosystem.

• DTCC Picks Chainlink as Data Layer for 24/7 Tokenized Collateral Platform — the Collateral AppChain will use Chainlink's Runtime Environment to automate eligibility checks, margin calls, and settlement across global markets, with a production launch slated for Q4 2026.

• Anthropic Flags Unauthorized Tokenized Shares — the Claude maker updated its terms to void any unapproved stock transfers, explicitly naming eight platforms including Hiive and Forge, as on-chain venues were pricing Anthropic at a $1.5T implied valuation — roughly 4x its last funding round.

• Circle Q1 2026 Earnings Call Recap — USDC on-chain transaction volume surged 263% YoY to $21.5 trillion, with Circle reaffirming full-year guidance and disclosing the $222M Arc token presale led by a16z.

• Galaxy to Manage $125M DeFi Yield Fund Seeded by Sharplink's ETH Treasury — the Galaxy Sharplink Onchain Yield Fund will deploy $100M of Sharplink's staked ETH into DeFi liquidity protocols, with Galaxy contributing $25M and handling protocol selection and risk management.

• Circle Raises $222M in Arc Presale at $3B FDV — the stablecoin-native Layer 1's native token presale was led by a16z crypto ($75M) with participation from BlackRock, Apollo, ARK Invest, ICE, and others.

That wraps this week's Converge. If you found this useful, forward it to a peer who's still figuring out where stablecoins, tokenization and on-chain markets are actually headed.

Tips, corrections, pushback? Reach the editors at editorial@thedefiant.io.

See you next Friday.