Crypto Roundup: Grayscale Backs Zcash, UK Expands BoE Mandate to Stablecoins, StarkWare Tests Quantum-Resistant Bitcoin

Grayscale has argued that Zcash (ZEC) could mount a credible challenge to Bitcoin's entrenched network effects as artificial intelligence raises the stakes for financial privacy. In a research note, Grayscale head of research Zach Pandl said Zcash benefits from arriving later to the market, combining Bitcoin-like monetary characteristics with optional transaction privacy that could prove increasingly valuable as AI enables more sophisticated analysis of on-chain financial activity. The bullish case follows a roughly 19-fold surge in ZEC over the past year, though its market capitalization remains under 1% of Bitcoin's. Grayscale cautioned that Zcash remains a high-risk asset and warned further gains are unlikely to be linear, noting that competitors such as Litecoin have historically struggled to erode Bitcoin's liquidity advantage. Institutional interest is also growing: Nasdaq-listed Cypherpunk Technologies recently acquired a $33.33 million mining fleet from Winklevoss Capital, now accounting for roughly 18% of Zcash's network hashrate.

The UK government is moving to place stablecoins at the center of an expanded Bank of England mandate focused on digital payments innovation. HM Treasury announced on Thursday plans to give the BoE a secondary objective supporting innovation in payment systems and emerging forms of digital money, while preserving financial stability as its primary remit. The new mandate will explicitly cover payment systems that use digital settlement assets such as stablecoins, aligning with broader UK efforts to update its regulatory framework and coordinate more closely with US counterparts on digital asset policy.

Meanwhile, StarkWare researcher Avihu Levy demonstrated a quantum-resistant Bitcoin spending transaction on Bitcoin mainnet without requiring a protocol change, a notable milestone given longstanding concerns that future quantum computing breakthroughs could compromise Bitcoin's elliptic curve cryptography. The test highlights a growing effort across the Bitcoin ecosystem to harden the network against quantum threats using existing signature schemes and layered solutions rather than contentious forks, though widespread deployment would still require ecosystem-wide coordination among wallet providers, miners and exchanges.