Crypto Meets Wall Street: Bitcoin Treasuries, Worldcoin Identity, and Stablecoin Interest Raise Big Questions

Bitcoin Treasuries, Biometric Proof of Personhood, and Stablecoin Interest: A Crypto Crossroads

As crypto continues its uneasy tango with traditional finance, a wave of new developments—from eyeball-scanning identity protocols to stablecoins behaving like banks—is raising fundamental questions about the future of decentralization, regulation, and human identity online.

Crypto vs. Wall Street: Who’s Playing Whom?

There’s a strange theater unfolding between crypto markets and public equities. Bitcoin treasury companies—firms that hold bitcoin on their balance sheets and, increasingly, go public—are causing some to wonder if the stock market is being duped by crypto optimism.

Matt Levine quipped, “It looks a little bit like crypto keeps playing a prank on the stock market, and the stock market keeps falling for it.” A recent example: Cantor Equity Partners (CEP), a SPAC (Special Purpose Acquisition Company), is now trading at $50—a 5x premium—after announcing a deal to form a new bitcoin-native firm, “Twenty One,” with Tether and SoftBank.

Investors are essentially betting that $100 million in bitcoin will somehow be worth $500 million once parked inside this new venture. If that sounds familiar, it’s because this mirrors the speculative mania of 2021, when SPACs regularly traded at wildly inflated valuations. History, it seems, may be repeating.

Stablecoins: Currency or Savings Vehicle?

Another question gathering momentum is whether stablecoins—cryptocurrencies pegged to the U.S. dollar—should be allowed to pay interest. On its surface, it feels logical. After all, brokerages like Vanguard and Fidelity already let users earn interest and pay bills from money market accounts.

But allowing stablecoins to pay interest would effectively transform them into narrow banks, a model the Federal Reserve has long resisted. Narrow banks don’t lend—they just park customer funds in low-risk assets like T-bills. Critics argue this is financially unproductive and socially regressive.

Yet Austin Campbell, a respected voice in digital finance, offers a counterpoint: If stablecoins can’t pay interest, the yield doesn’t vanish—it simply enriches executives. Exhibit A: Tether. In Q1 alone, its owners paid themselves a $2.3 billion dividend, despite the company reporting just $1 billion in profits. That dividend represents a staggering 19.5% quarterly return. It's no surprise that competitor Circle recently turned down a $5 billion buyout offer.

Adding to the complexity, USD1—the Trump family-linked stablecoin—was used in a recent $2 billion transaction between Binance and UAE investment firm MGX. The deal raised eyebrows and questions about conflicts of interest at the highest levels.

Worldcoin and the Battle for Online Identity

Meanwhile, a different kind of innovation is surfacing—this one in the identity space. Worldcoin, now available in the U.S., is turning heads with its promise of “proof of personhood.” Users verify their identity through a biometric iris scan, which is then converted into a cryptographic hash stored on the blockchain.

Critics liken it to sci-fi surveillance tech, but supporters—including Vitalik Buterin—argue it solves real problems: bots, spam, deepfakes, and fake job applications. As the internet fills with AI-generated content, being provably human may soon become a core requirement.

Sam Altman, the project’s high-profile backer, calls it “a way to make sure humans remain central and special in a world filled with AI.” While it may seem ironic—Altman’s AI ventures contribute to the problem he’s solving—his point remains: CAPTCHAs aren’t cutting it anymore.

And if identity must be verified, users will likely have to choose between three options: governments, corporations, or decentralized crypto protocols. From a privacy standpoint, the latter may be the least bad option.

Crypto’s Identity Crisis

These developments—eyeball-based ID, stablecoins inching toward banking, bitcoin going public via SPAC—reveal a growing tension in crypto's identity. What was once a cypherpunk movement pushing for decentralization is now rubbing elbows with Wall Street, regulation, and real-world politics.

Contributing your crypto to publicly traded bitcoin treasuries? That might be profitable—but it’s hard to argue it’s cypherpunk. Yet many in the community are embracing it.

Maybe it’s as simple as: number go up.