One of the major bank lobbies has fired a salvo in the battle over formalizing stablecoins in the United States.

Why it matters: It was never going to be enough to get a law passed in the U.S. There was always going to be a bureaucratic fight, too.

Driving the news: The Bank Policy Institute sent four letters to the Office of the Comptroller of the Currency Friday objecting to the five national trust charter applications sought by different stablecoin issuers.

Between the lines: The Genius Act, which establishes a clear pathway for legal issuance of stablecoins in the U.S., requires that issuers operate under either a federally or state-chartered entity.

• Traditional banks argue that a national trust-bank charter amounts to an unfair shortcut for stablecoin issuers, who are eyeing broader, bank-like activities — such as payments — than those "regulatory-light" charters were ever intended to permit.
• For crypto firms, the charters offer a major advantage: a streamlined route to federal legitimacy that avoids the patchwork complexity and limits of state-level licenses.

Zoom in: Trusts don't provide banking services as we traditionally know them. Instead, they steward assets for some entity that needs those assets for its operations.

• Like, for example, managing a giant pile of U.S. treasuries and some cash for backing the value of a given stablecoin.
• It's what may or may not happen next that the BPI is arguing over.

In its letters, BPI first objects that the applicants' filings are too heavily redacted to allow for meaningful public feedback.

• Further, it objects to the legal permissibility of the proposed trust charters.
• The group also raises concerns about the risk that would be added to the system by linking stablecoins and the digital asset world into the regulated financial system.

What they're saying: "Just as the OCC should not (and we offer, never would) grant a national trust bank charter to an institution solely focused on, for example, the subprime mortgage market, the OCC should not grant a charter to an institution solely focused on the digital asset market," the Bank Policy Institute's Paige Paridon writes in its letter about the proposed Ripple National Trust (with similar language in the other letters).

Amid this tug-of-war, Ripple's stablecoin — Ripple USD (RLUSD), issued by the company behind the top-five cryptocurrency XRP — crossed the $1 billion market cap mark for the first time.

• One of the newer stablecoins, Ripple USD joins a list of just 12 dollar-tracking stablecoins with market caps over $1 billion.
• Another that just crossed the mark: global dollar, or USDG, which is offered by a consortium of crypto companies.

What we're watching: How long BPI and other bank lobbies can keep the bureaucratic deliberations dragging on.

• "We note that the potential issuance of a stablecoin by a national trust bank raises complex and highly consequential legal and policy questions that can and should be carefully resolved only after extensive public notice and comment and consultation with other federal banking agencies," Paridon argues.
• That's a lot more steps ahead of finalization.

While Democrats fret about the governor's race in New Jersey, prediction market bettors see it very differently.

Why it matters: Once again, prediction markets are expressing a level of confidence that is not showing up in pre-election polling, just like in the last presidential election.

• If the prediction markets get this one right, it will be another feather in the cap of crowd wisdom.

The latest: The most recent poll in the race shows Democrat Mikie Sherrill edging out Republican Jack Ciattarelli, but only just. That squares with similar polling, saying the blue state will make this close.

• Meanwhile, yesterday afternoon, Polymarket, Kalshi and PredictIt all had Sherrill at better than 80% odds of winning.

What we're watching: The prediction markets don't think it's close — but the pollsters do. If the result is decisive, it'll be another win for prediction markets as the better source of truth.

The intrigue: Stand With Crypto rates Sherrill as strongly pro-crypto.

• The group had a 65,000-person rally amid the primaries.

Between the lines: Polls and prediction markets do answer slightly different questions.

• Polls report on who people say they plan to vote for, not the odds of a candidate winning.
• Prediction markets report on what outcome bettors expect.
• So, a voter who would prefer that Ciattarelli wins might not be willing to bet a single cent that he will.

The two methods can give very different results and yet both can be technically correct.

How it works: Imagine an election with a 100-person electorate, all of whom absolutely always vote and answer questions honestly.

• Now, imagine someone polled all of them and 51 of them said they were going to vote A and 49 would vote B.
• The poll would show 51 to 49, but based on the known behavior of those voters, the prediction market would come out with 99% odds for A.

What's next: The final results in New Jersey. The real polls are open now.

Several new spot cryptocurrency ETFs sneaked onto the market last week, but they didn't have much impact on those asset prices so far.

The big picture: Only the Solana ETF had any success, with tens of millions of inflows in the first week, but it had basically no impact on the cryptocurrency's price.

• Solana has a $93 billion market cap, so tens of millions is not that meaningful yet.
• So far, the ETF is smaller than the largest digital asset treasury companies buying SOL.

In the weeds: Litecoin was devised as digital silver to bitcoin's digital gold a long time ago, but it hasn't had much of a narrative for years.

• Its main claim to recent fame came when PayPal started offering cryptocurrency to its users. It only offered bitcoin, ether, litecoin and bitcoin cash at first.
• HBAR is the cryptocurrency for Hedera, a blockchain governed by a council of corporations. It's the 28th largest by market cap.

The bottom line: Solana had encouraging results in its first week out, but HBAR and LTC ETFs had lackluster debuts.

• Outside of Bitcoin, specific cryptocurrencies lack brand recognition among investors.

👴 Global regulators are taking another look at recommended bank capital requirements around holding cryptocurrency. (Bloomberg)

🔵 Circle removed restrictions on legal firearms purchases from its terms of service. (DL News)

😖 A $93 million DeFi exploit puts another $285 million worth of connected positions in a likely insolvent position. (The Block)

👻 DeFi money market leader Aave will buy back $50 million of its tokens annually. (The Defiant)

🦀 Bonus: An intriguing take on why bitcoin price just isn't moving that much even though all the conditions are right. (Visser Labs)