👀 Google vs. the UK

What’s going on here?

British regulators want to put Google on a tighter leash, hoping to impose new rules that’ll make the firm roll over.

What does this mean?

Alphabet-owned Google handles over 90% of online searches in the UK. That gives the tech giant a lot of power – too much, according to regulators. The current setup, they say, makes it tough for users to switch search providers and hard for rivals to compete. So now, using strict new digital laws passed last year, the UK’s proposing that Google be given “strategic market status”. That’d let regulators demand more transparency and impose a certain set of rules on the company, meaning Google could be required to change how it ranks search results and uses existing content in its AI-generated summaries. Safe to say the firm isn’t thrilled: Google’s had the whole search-and-ads bone for some time now, and it’s not particularly interested in sharing.

Why should I care?

For markets: Regulators want to teach Big Tech new tricks.

This isn’t an isolated incident. Google’s currently fighting against European regulators, too – and it looks to be losing that battle. The firm’s facing a $4.8 billion fine for allegedly using Android to shut out rivals. And in the US, Google recently lost not one but two cases for hogging the search and ads market. Investors, pay attention: all this scrutiny can stall innovation, raise compliance costs, and chip away at profit margins.

The bigger picture: It’s a tug of war.

Once upon a time, regulators gave tech giants a simple telling off for peeing on the rug. Now, they’re scoring legal wins and imposing massive fines, pushing the tension between innovation and oversight higher than ever. Google says that the UK’s new rules could delay product launches in the country, denying Brits its latest treats. Regulators, for their part, want to keep things fair without blocking development.

What’s going on here?

Circle’s stock bolted out of the gate when the crypto platform went public earlier this month – but it finally slipped on Tuesday and took a bit of a tumble.

What does this mean?

Circle runs one of the biggest stablecoins out there: USDC. The token is “pegged” to the US dollar, so each one is backed by an equivalent dollar-denominated asset – things like government bonds, as well as actual greenbacks. Theoretically, that makes stablecoins less volatile than regular cryptocurrencies. And they're all the rage right now. The US is writing landmark new legislation to govern the coins, and even the president has his own token. All that excitement has led investors to pile into Circle, sending the stock galloping up 750%. But the firm’s sky-high valuation has raised some eyebrows, and it looks like that was more than just sass. Investors reined the stock in on Tuesday, pulling it down 15%.

Why should I care?

For markets: Maybe it’s all just FOMO…

Critics question whether US consumers really want to ditch their credit cards, worried that the attention stablecoins are getting is being driven by hype rather than actual fundamentals. But Coinbase doesn’t seem bothered. The biggest US crypto exchange is hard at work building infrastructure to support the stablecoin boom. Makes sense: Coinbase now earns more from stablecoins than anything besides trading, with income from that segment up 50% over the last year.

The bigger picture: …or maybe stablecoins are here to stay.

Stablecoins seem to be edging their way into the core of traditional finance. Wall Street’s biggest banks recently announced plans to issue a joint one for sending and receiving payments. And now, fintech company Fiserv is launching a token to bring stablecoin tools to thousands of smaller banks. It’s teaming up with – yep – Circle to do so, along with Solana and others. And if stablecoins are successfully built into major financial systems, stocks of the firms involved could soar.