Legal Concerns Overshadow Sui Stablecoin Launch

One SUI treasury is making an ambitious gamble, launching two stablecoins based on the token’s blockchain. SUI Group has partnered with Ethena Labs to release these tokens by the end of 2025.

The firm plans to add utility to SUI’s blockchain, providing a possible new use case for altcoin DATs everywhere. However, extreme regulatory and market pressures could collapse the project entirely.

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SUI Treasury Launches Stablecoins

In July, Mill City Ventures made headlines by rebranding to SUI Group, a digital asset treasury (DAT), raising $450 million to invest in the token. One month ago, it publicly announced a $330 million stockpile, and has continued accumulating since.

Today, however, this SUI treasury took the unorthodox step of planning to launch two stablecoins.

According to SUI Group’s press release, the firm is partnering with Ethena Labs to develop these stablecoins. On the surface, this company has a very specific reason for being the first DAT to launch a stablecoin: adding utility to SUI’s infrastructure.

USDC is currently the most popular stablecoin on SUI’s blockchain, but this treasury could change this paradigm. These two new assets, suiUSDe and USDi, could therefore establish a new use case for DATs. This is an ambitious experiment, but executives seem optimistic:

“SUI Group is evolving beyond a traditional DAT company to become an infrastructure builder with a long-term vision of creating a next-generation ‘SUI Bank’, that functions as a central liquidity hub for the ecosystem. We believe this initiative will add another powerful mechanism to drive liquidity, utility, and long-term value across the Sui blockchain,” claimed Chairman Marius Barnett.

Bold Strategy or Desperate Gamble?

However, a slightly deeper look unveils a whole host of problems. First of all, the entire DAT sector is facing declining mNAVs and stock performance. Even the largest and most established whales are cracking under the pressure.

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In other words, SUI Group’s stablecoin gambit may be a necessary measure to stand out in this shrinking market.

Moreover, it’s unclear how either of these SUI stablecoins will fit with impending US regulations. The GENIUS Act mandates that issuers hold reserves in US Treasuries, and firms like Tether have been taking great pains to prepare for this.

If SUI Group invested most of its capital into this token, how will it acquire enough Treasuries?

Furthermore, US regulators launched a massive probe into DAT firms one day ago. Treasury firms are already under a ton of suspicion for insider trading allegations, and a SUI holder picks today to launch a stablecoin? The company’s own statement explicitly discusses adding long-term value to the token network it’s heavily invested in.

A Fork in the Road for DATs Everywhere

All that is to say, this SUI stablecoin plan could go one of two different ways. The bullish scenario is that it all works out smoothly, proving a valuable new use case for altcoin DATs. Aspiring firms could begin stockpiling lesser-known tokens to exert novel influence on their blockchain ecosystems.

On the other hand, though, this could fall apart spectacularly. Regulatory scrutiny or plain old market logic could put this plan to bed despite SUI Group’s best efforts. SUI’s token price hasn’t even been doing particularly well in recent weeks.

If this bold plan can’t deliver, it’d be a bearish sign for DAT firms everywhere.