Swiss bank UBS (UBSG.S), opens new tab has completed the merger of its domestic unit with Credit Suisse’s operations in its home market, the bank said on Monday, adding that the head of the Credit Suisse business was leaving the bank.
Andre Helfenstein, CEO of Credit Suisse Switzerland, has decided to leave the bank following the merger of UBS Switzerland AG and Credit Suisse (Schweiz) AG, the bank said.
Following the merger, UBS Switzerland has taken on all the rights and obligations of Credit Suisse, with the process expected to ease the migration of clients and operations to the UBS platform.
Sabine Keller-Busse, president of UBS Switzerland, said the step was an important milestone in the integration of Credit Suisse UBS following last year’s takeover.
“The migration of the majority of client transactions in Switzerland to the UBS platform will take place in 2025 and will be gradual, with tailored updates to our clients,” she said in a statement.
UBS has already begun to move over clients from Credit Suisse in Hong Kong and Singapore.
The merging of the entities also paves the way for UBS to speed up progress on its plan to axe 3,000 jobs in Switzerland. Globally analysts have estimated more than 30,000 staff could be cut.
Debate has been vigorous in Switzerland about the size and power of the enlarged UBS, which analysts say has a dominant position in areas such as the Swiss loan and debt markets since it took over Credit Suisse in a state-engineered rescue.
However, Switzerland’s financial regulator last month ruled that the takeover did not create any competition concerns, despite recommendations from the country’s antitrust watchdog that it merited further scrutiny.
Banks in Germany, France and elsewhere in the EU have lent more than 1.4 trillion euros ($1.5 trillion) to the commercial real estate sector, leaving some lenders vulnerable to “cracks” in the market, the bloc’s banking watchdog said on Tuesday.
In its latest risks report, the European Banking Authority (EBA) said banks faced “elevated uncertainty” from geopolitical factors, with analysts seeing the French parliamentary election as a potential risk.
Capital levels are “comfortable”, but caution is needed as payouts rise on the back of higher profits, the EBA said.
“Planned payouts in 2024 reach nearly 100 billion euros for the covered sample of banks, which is the highest volume for years,” the EBA said in the report, which surveyed about 80% of the banking sector.
It also scrutinised banks’ exposure to property, private credit and non-bank financial intermediaries (NBFI) such as investment funds.
“Structural and cyclical factors have caused cracks in commercial real estate markets,” EBA said.
Total EU bank exposures to real estate have risen 40% to 1.4 trillion euros over the past decade, with several, mainly smaller banks, having exposures that are now multiples of their equity, making them vulnerable to downturns, the watchdog said.
“Although banks domiciled in France and Germany reported the largest exposure, exceeding 280 billion euros, followed by banks in the Netherlands that reported 175 billion euros, only German banks reported an elevated share of their total client lending towards CREs,” it said, referring to commerical real estate borrowers.
EU banks have already set aside 31 billion euros against loans to real estate going sour, and the risks should be “manageable”, EBA said, adding that Denmark’s capital buffer for property risk is one way of mitigating such risks.
As of December 2023, the NBFI sector accounted for more than a quarter of bank-issued debt, and growth in private credit or lending by NBFI directly to households and business, has been “rapidly accelerating” in several EU states, EBA said.
“The downturn of the real estate market might also have stronger repercussions on market stability, negatively affecting NBFIs significantly exposed to the segment,” the report said.
EU banks’ exposures to NBFI reached 9.2% of total assets in 2023, bringing welcome competition for borrowers, but also risks such as potentially lower lending standards, EBA said.
“To detect potential contagion channels early on, supervisors and macroprudential authorities also need to have a particular focus on the direct and indirect linkages between banks and NBFIs,” it added.
The bloc’s executive European Commission has begun scoping out a macroprudential framework for NBFI. EBA said transparency should be improved, with better data on linkages between banks and non-banks also needed.
A “German Government (BKA)” labeled cryptocurrency wallet has sold another $52 million worth of Bitcoin, sparking suspicions that the government is selling its vast BTC holdings.
The wallet associated with the German government transferred 832.7 Bitcoin in four individual transactions on July 2.
The wallet sent 100 BTC to Coinbase, 150 BTC to Bitstamp and 32.74 BTC to Kraken, according to Arkham Intelligence data.
The lion’s share, or 550 BTC worth over $32 million, was sent to the wallet “139Po,” which remains unknown but has previously received funds from the German government, including 500 BTC on June 25 and 800 BTC on June 20.
Tracking the selling patterns of large Bitcoin holding entities can give investors valuable cues about the Bitcoin price since large sell orders can create more downward price pressure.
German government could introduce more Bitcoin selling pressure
The BKA-labelled wallet, which holds over 43,850 BTC worth over $2.75 billion, could threaten Bitcoin’s price due to more potential selling pressure.
The Bitcoin price has been in a downtrend since the beginning of June, falling over 7.3% during the past month. BTC found a local bottom above the $58,450 mark on June 24 before bouncing back above the current $62,000 mark, according to Bitstamp data.
Bitcoin has amassed significant support at the $61,500 mark. However, a move below it would liquidate over $1 billion worth of cumulative leveraged long positions across all exchanges, according to Coinglass data.
Is the German government actively selling BTC?
Besides the largest transfer worth $32 million, the rest of the Bitcoin was transferred to centralized exchanges, which signals that Germany’s government is potentially looking to sell its Bitcoin.
Cointelegraph has approached Germany’s Federal Criminal Police Office (BKA) for comment.
The German government-labeled wallet first sparked suspicions of potential Bitcoin selling on June 19, when it executed a 6,500 BTC transfer worth over $425 million.
Before the transfer, the wallet held nearly 50,000 BTC since February 2024. The funds are believed to have been seized from the pirate movie website operator Movie2k.
The intersection of artificial intelligence and blockchain seems to be a growing focus for venture capitalists and innovators worldwide. Companies developing solutions based on these technologies disclosed substantial capital raises in June, many of them seed rounds.
One of these protocols is Sentient, which raised $85 million in funding to develop an open-source artificial intelligence platform. The round was led by Peter Thiel’s Founders Fund, Pantera Capital, and Framework Ventures.
The startup is an AI research organization that wants to enable developers to monetize their open-source models and data, similar to other ecosystems such as the Super Intelligence Alliance.
Another startup, ORA, also uses AI models and blockchain to generate revenue for developers. In early June, the protocol raised $20 million from Polychain, HF0 and Hashkey Capital. It is working on a mechanism that will entitle anyone who buys a token to own and share revenue generated by an AI model.
“I am particularly excited about opportunities at the convergence of AI and Crypto, although even that distinction will sound dated in a few years,” Pantera Capital’s portfolio manager Cosmo Jiang told Cointelegraph.
Jiang said that, in the future, every business will use AI as a tool, just as every business has adopted the internet in the past 20 years:
“There won’t be a distinction between “AI businesses” and “Non-AI businesses” […] As such, we expect many blockchain-enabled businesses will explicitly solve problems with or related to AI.”
Pantera is also an investor in Bittensor, a decentralized platform for building and using AI models. It functions like a marketplace where users can create, train and share AI models, earning rewards for contributing to the network.
The funding was made in early 2024, and the amount invested has not been disclosed. “It is a meaningful position in our portfolio,” said Jiang about the token deal. The venture firm, traditional in the blockchain space, has allocated $200 million to AI projects.
This edition of Cointelegraph’s VC Roundup features another batch of startups that raised capital in June.
Lombard raises $16M seed round for Bitcoin restaking
Lombard has closed a $16 million seed funding round to develop a Bitcoin restaking ecosystem in collaboration with Babylon. Polychain Capital led the round, along with participation from dao5, Nomad, Foresight Ventures, and ABCDE.
Major exchanges, including OKX and Bitget, also contributed. The startup’s flagship product is LBTC — a liquid and yield-bearing representation of BTC that can move across decentralized finance protocols as collateral, according to Lombard.
The product is expected to unlock liquidity from BTC staked on Babylon’s protocol. Former executives from Argent, Coinbase and Maple Finance are behind the startup.
Redacted secures $10 million funding co-led by Spartan Group for “entertainment datasphere”
Redacted has raised $10 million in a funding round co-led by Spartan Group, with participation from Saison Capital, Animoca Brands, and Polygon Ventures.
The startup promotes a Web3 entertainment ecosystem that integrates blockchain and artificial intelligence to create an “entertainment datasphere,” which will allow users to play, trade, and watch content while earning rewards — a process known as farming.
The Redacted leadership team is said to include backgrounds from companies such as Tesla, Bank of America, Kraken, and LEGO. The team has allocated more than 50% of the tokens to its community and ecosystem.
A group of advisers and consultants from companies such as Saison Capital, Confiction Labs, King/Candy Crush, Amazon, and Microsoft is assisting in the design and building of the ecosystem.
RedStone closes $15 million Series A round led by Arrington Capital
Modular oracle developer RedStone has closed a $15 million Series A round led by Arrington Capital, with participation from SevenX, IOSG Ventures, Spartan Capital, White Star Capital, Kraken Ventures, Amber Group, Protagonist, gumi Cryptos, Apeiron (Samara Group), among others.
RedStone’s total value secured (TVS) has reached over $4 billion, according to the protocol. The startup claims to have more than 110 clients across 60 chains, including Pendle, Morpho and Venus. In January, RedStone became the only oracle to integrate with TON (The Open Network) and secured a $500 million staking commitment from EtherFi in April.
It provides data feeds to Ethereum, zkSync Era, Avalanche, Base, Polygon, Linea, Celo, Optimism, Arbitrum, Fantom, BNB Chain, Blast, and Bitcoin layer 2s such as Merlin Chain and BOB.
Covalent closes $5M round to offer long-term data availability across Asia
Blockchain infrastructure firm Covalent has announced the closing of a $5 million strategic funding round led by RockTree Capital, with participation from CMCC Global, Moonrock Capital, and Double Peak Group.
The funds will be used to expand Covalent’s operations in Asia and support long-term data availability in China, Korea, Singapore, and other regions. The startup has been working on its modular data infrastructure layer with Ethereum Wayback Machine (EWM) since 2019 and claims to have integrated with over 225 blockchains and 240 million wallets.
Covalent’s structured data pool is used for decentralized artificial intelligence training. Former BitMEX CEO Arthur Hayes serves as Covalent’s strategic adviser.
DePIN Base Camp announces six startups for Web3 accelerator program
Outlier Ventures has announced the six startups selected for the DePIN Base Camp accelerator program. The remote 12-week is a collaboration between Outlier, Peaq and Borderless Capital. The selected startups are Aydo (United Arab Emirates), Kaisar Network (Vietnam), Roam Network (Finland), ROVR (Hong Kong), TouchBrick (USA), and YOM (U.K.).
These startups are building products in Internet of Things hardware networks, decentralized computing and AI, wireless network optimization, digital twin technology, cybersecurity, and cloud gaming and metaverse.
Throughout the program, the teams will receive support from Outlier on product roadmap, community building, entity structuring, and fundraising. Meanwhile, peaq will share its expertise in building and running a DePIN. In addition, each team will receive investment from Borderless Capital.
Every once in a while, headlines about $100 million or larger Bitcoin and crypto futures contracts liquidations appear, causing novice investors and non-expert analysts to point to excessive leverage by retail traders as the culprit.
Gamblers are undoubtedly responsible for a large portion of these risky bets, especially when the liquidation is concentrated on retail-oriented exchanges such as Bybit and Binance, but not every futures liquidation is the result of reckless leverage use.
Not all futures liquidations are caused by leverage
Some trading strategies used by professionals also end up being liquidated during sudden sharp price moves, but they do not necessarily represent a loss or a sign of excessive leverage. The Chicago Mercantile Exchange (CME), OKX and Deribit typically exhibit a much lower liquidation ratio when compared to retail-driven exchanges, indicating that those traders are usually deploying more advanced strategies.
Using futures markets, especially perpetual contracts (inverse swaps), is fairly easy. Almost every crypto exchange offers 20x or higher leverage, requiring just an initial deposit, known as margin.
However, unlike regular spot trading, a futures contract cannot be withdrawn from the exchange. These leveraged futures contracts are synthetic, but they also offer the possibility to short, meaning one can bet on the price downside.
These derivatives instruments have unique benefits and can improve a trader’s outcomes, but traders who become overly confident seldom end up being profitable in the mid- to long term. To avoid falling into this mental trap, pro traders usually deploy three different strategies aiming to maximize profits without relying solely on directional trades.
Forced liquidations on low-liquidity pairs
Whales use futures contracts to exploit volatile markets by targeting low-liquidity pairs. They open highly leveraged positions, anticipating forced liquidations due to insufficient margins. This triggers a chain reaction, pushing the market in a preferred direction.
For instance, if a price drop is desired, large amounts are sold, causing other traders to be liquidated and sell as well, further driving down the price. Though it seems money is being lost initially, the cascading effect benefits the strategy.
Executing this tactic requires substantial capital and multiple accounts. It effectively leverages market mechanics to create a significant impact, and understanding market behavior is crucial for this approach.
Cash and carry trading
The cash and carry trade involves purchasing an asset in the spot market and simultaneously selling a futures contract on that same asset. This strategy locks in the price difference between the spot and futures prices. Traders hold the asset until the futures contract expires, profiting from the convergence of these prices at maturity.
This arbitrage approach is low-risk and capitalizes on pricing inefficiencies between the markets. It is particularly effective in stable markets, providing consistent returns irrespective of overall market volatility, making it a favored strategy among risk-averse investors.
Funding rate arbitrage
Perpetual contracts (inverse swaps) charge a funding rate typically every eight hours to balance buyers and sellers. This rate varies with market leverage demand. When buyers (longs) demand more leverage, the funding rate becomes positive, making buyers pay fees.
Market makers and arbitrage desks exploit these differences by opening leveraged positions and hedging them by buying or selling in the spot market. They also explore differences between exchanges or between perpetual and monthly contracts.
This strategy, called funding rate arbitrage, involves capitalizing on varying rates across markets, requiring constant monitoring and precise execution to maximize profits while managing risk effectively.
In essence, using derivatives requires knowledge, experience and a substantial capital reserve to withstand market volatility. However, strategies like funding rate arbitrage can be effective even in less volatile markets, where there is minimal price action. These approaches prove that it is possible to use leverage prudently, maximizing profits even in calmer market conditions.
Data from Cointelegraph Markets Pro and TradingView showed BTC price action attempting to cement gains, which accompanied the monthly close.
Despite an overall failure to tackle key resistance levels above $64,000, Bitcoin traders had renewed cause for optimism as July got underway.
“Bitcoin has resumed its uptrend,” popular trader and analyst Rekt Capital summarized in one of several news posts on X (formerly Twitter).
Rekt Capital highlighted the monthly close as a key sign of strength, with a chart showing a breakout from the downtrend that characterized June.
“The goal? To build a foundation from which it will be able to springboard to the Range High area at ~$71500 over time,” he explained.
Fellow trader Daan Crypto Trades, meanwhile, placed emphasis on United States dollar liquidity trends. As Cointelegraph reported, these are crucial for crypto market performance, with expectations of positive repercussions increasing last month.
“During this range, the BTC price has moved mostly in line with USD Liquidity,” he asserted on the day alongside a comparative chart.
“We just saw a big decrease into a nice move up during this end of the quarter into the new quarter. Liquidity has moved little this year but both BTC & Stocks have been front running a future expansion of USD liquidity.”
Market analyst Cole Garner went further, suggesting that recent Federal Reserve liquidity changes could have a tangible short-term impact on BTC price strength.
“Biggest Fed Net Liquidity rate-of-change spike in 15 months,” he observed.
“Last time that happened, bitcoin rose ~40% in one week. Not assuming a repeat, but you love to see it.”
Bollinger Bands demand BTC price breakout
Technical indicator data likewise teased signs of increased volatility hitting Bitcoin next.
On weekly timeframes, Bollinger Bands were constricting to levels only seen a handful of times in Bitcoin’s history — a classic precursor to major breakouts.
The phenomenon was observed on X by popular analyst Matthew Hyland.
Tether is increasing its presence in Turkey by partnering with a local cryptocurrency firm to promote industry knowledge.
The firm, issuer of the Tether stablecoin, has signed a memorandum of understanding (MoU) with local crypto platform BTguru to evaluate digital asset-related educational initiatives in Turkey, it announced on July 2.
BTguru positions itself as a technology and strategy partner, specializing in virtual crypto assets “for primarily banks.”
As part of the agreement, Tether will assess the development of programs to introduce private and public stakeholders in Turkey to the benefits of cryptocurrency and blockchain technology.
The MoU also aims to promote peer-to-peer (P2P) technology using BTguru’s connections to facilitate discussions with financial institutions in the country.
Additionally, Tether and BTguru will explore real-world asset tokenization use cases for banks and evaluate regional payment network scenarios.
Tether to evaluate what business lines can be introduced into Turkey’s banking verticals
According to Tether CEO Paolo Ardoino, Tether and BTguru are committed to promoting the transformative potential of digital assets and P2P technologies.
“This MOU has the potential to provide a solid foundation for the responsible and informed use of digital assets. We are excited to be part of a movement that could promote freedom and educate people across Türkiye,” Ardoino said.
BTguru partner Can Bukulmez said that the new collaboration with Tether aims to introduce new business lines with the stablecoin firm. The partnership will also evaluate what business lines can be introduced into Turkey’s banking verticals and emerging digital assets businesses.
Turkey emerges as a global cryptocurrency hub
Tether’s expansion in Turkey comes amid cryptocurrency adoption, which has been gaining traction in the country at a significant pace. According to data from Binance, Turkey ranks fourth in transaction volume and 12th in adoption, with a rate of 40%, making it a significant player in the global crypto ecosystem.
Turkey’s stablecoin purchases also make up a significant share of the country’s gross domestic product, accounting for 4.3% of its GDP, which is the highest among global economies, according to Chainalysis.
“With the interest of the Turkish community in digital assets and blockchain technology, Turkey emerges as one of the leading global hubs for crypto with a dynamic ecosystem, active participants, and significant transaction volumes,” Binance TR general manager Mücahit Dönmez said in a statement on July 2.
Tether and Binance’s growing efforts to participate in the Turkish crypto ecosystem follow a massive hack of the local crypto exchange BtcTurk. According to Peckshield, hackers stole more than $100 million in crypto from BtcTurk on June 22.
The events also follow a local regulatory milestone. In late June, the Financial Action Task Force (FATF) removed Turkey from its gray list, citing “significant progress” in improving its regime for Anti-Money Laundering (AML) and countering terrorist financing.
As Cointelegraph previously reported, the FATF’s AML requirements, including those related to cryptocurrency, have accelerated the urgency for Turkey to introduce crypto regulations in 2024.
“Because it’s France” was how Jean-Claude Juncker, European Commission president at the time, explained Brussels’ decision in 2016 to give leeway to the large, founder member of the European Union on the bloc’s budget rules.
That patience continued even as the EU endured a sovereign debt crisis that almost sunk the euro and forced smaller, more indebted nations such as Greece and Portugal to adopt swingeing austerity measures.
But any indulgence for French exceptionalism may come to an end if France’s snap election produces a eurosceptic, far-right government in Paris that could strain ties with other European capitals and test the very foundations of the euro project.
Marine Le Pen’s National Rally (RN) insists it would not blow up the French budget. But questions persist about how it would fund costly spending plans within the eurozone’s newly minted budget rules and whether the European Central Bank could step in to help if financial markets turn on France.
“If a country can just ignore the rules and be helped by the central bank, you’ll get a lot of doubts about the future value of the euro and the future cohesion of the euro,” said Holger Schmieding, an economist at Berenberg.
Such concerns are not on the official agenda of Thursday’s EU summit. But with the RN leading polls in the two-round vote starting June 30, they are bound to occupy the minds of President Emmanuel Macron’s fellow leaders.
Senior German government sources said they were dismayed by Macron’s surprise decision to call elections that could usher in an RN-led government. One compared it to former UK premier David Cameron’s ill-fated gamble on an “in-out” Brexit referendum.
In Italy, with an even bigger debt pile than France, a tinge of Schadenfreude over France’s misfortunes is offset by fears that a French crisis could extend across the Alps, said Francesco Galietti of Rome-based political risk consultant Policy Sonar.
Otmar Issing, the ECB’s first chief economist and one of the euro’s architects, compared the debt of Italy and France to “a sword of Damocles hanging over the monetary union”, bound to fall unless the problem is tackled.
“You can pull the hair by which it is attached but it cannot hold for ever,” he said in an interview.
Even Greece is not cutting France any slack, with central bank governor Yannis Stournaras stressing that all member states needed to respect EU rules.
NO MORE INDULGENCE
Polling points to the RN emerging as the largest party, with or without a clear majority to pursue an awkward “cohabitation” with Macron until the 2027 presidential election.
France’s fiscal credibility is already at stake with the International Monetary Fund questioning how it will reduce a budget deficit running at around 5.1% this year and its credit rating downgraded by two agencies.
In truth, France’s fiscal sins far pre-date Macron. It has run budget deficits greater than the EU-mandated 3% for most of the 25 years since those rules came into force.
Brigitte Granville, economist at London’s Queen Mary University and author of “What ails France?”, said its rejection in the 1990s of German proposals for more complete political union reflected a desire to retain sovereignty over its finances.
She expected the RN, which long ago dropped calls to leave a single currency broadly accepted by French voters, to moderate its plans just enough to please Brussels if it came to power.
“They don’t have a choice unless they want to leave the euro,” Granville said in an interview.
RN statements to that effect have reassured investors, who were demanding a premium of just 70 basis points to own 10-year French bonds rather than their safer German counterparts – a far cry from peaks of 190 points for France and nearly 560 points for Italy during the 2011 debt crisis.
ECB chief economist Philip Lane told Reuters the moves in the French bond market did not appear “disorderly”, meaning they don’t meet one of the conditions for the central bank’s intervention.
CAUTIONARY TALES
Observers point to cautionary tales ranging from Greece, where a leftwing government was brought to its knees by financial and political pressure, to Britain, where Prime Minister Liz Truss was forced to resign after unveiling a budget that unnerved investors.
Most analysts emphasise the ECB has the tools to stem contagion from a French crisis by buying bonds of other countries that do respect the EU’s fiscal framework, meaning Paris might find itself isolated at times of need.
“There is, of course, a possibility that Frankfurt would intervene if the problems with France were to have some kind of external negative effects on other countries, like Italy,” former ECB policymaker Ewald Nowotny said.
An EU official cited Rome as a model for Paris after Prime Minister Giorgia Meloni toned down her anti-EU rhetoric once elected in 2022.
This, along with her support for the EU’s stance on conflicts in Ukraine and Gaza, has helped Italy keep the Commission and financial markets on-side despite repeatedly raising its deficit forecasts.
Jeromin Zettelmeyer, director of the Bruegel economics think tank in Brussels, said RN’s rhetoric thus far did not suggest it was seeking a major confrontation with the Commission that could trigger a financial crisis.
However he said that if its officials ended up running key ministries, they could hamper EU moves to reform energy markets, advance the green transition and boost the bloc’s competitiveness by reforming its capital markets.
“If the far-right gets elected that is bad news for EU integration because they would control the government positions involved in most dimensions of EU policy-making,’ he said.
“The question is whether that is reversible or existential.”
Big U.S. lenders are expected to show they have ample capital to weather any renewed turmoil during this week’s Federal Reserve health checks, but will be conservative on investor payouts amid economic and regulatory uncertainties, analysts said.
The central bank on Wednesday will release the results of its annual bank “stress tests” which assess how much cash lenders would need to withstand a severe economic downturn and how much they can return to investors via dividends and share buybacks.
The results come a year after three large banks failed and as higher Fed interest rates continue to squeeze regional lenders’ margins and their commercial real estate (CRE) portfolios. Weakening consumer demand has also dampened sentiment on the trajectory of the economy.
With more mid-sized banks in the mix this year, the tests should provide fresh insight into the health of those lenders.
Introduced following the 2007-2009 financial crisis, the annual exercise is integral to banks’ capital planning.
The results will also likely fuel Wall Street banks’ campaign to ease draft capital hikes proposed by the Fed, which they say are unnecessary because big banks are already flush with cash.
Bank groups will be scouring Wednesday’s results for evidence that boosts their case, while being cautious on payouts since big dividends and buybacks could hurt banks’ argument that extra capital demands would impede their capacity to lend.
“The stress test could be used as a proxy battle in the overall capital regulatory reform war,” said Ed Mills, an analyst at Raymond James. “There could be some increase in returning capital to shareholders but it is expected to be modest as capital norms are yet to be finalized.”
This year 32 lenders will be tested. Wall Street giants JPMorgan Chase (JPM.N), opens new tab, Citigroup (C.N), opens new tab, Bank of America (BAC.N), opens new tab, Goldman Sachs (GS.N), opens new tab, Wells Fargo (WFC.N), opens new tab and Morgan Stanley (MS.N), opens new tab usually attract the most scrutiny.
Citi and Goldman, as well as smaller lender M&T Bank (MTB.N), opens new tab, are expected to perform well due to changes in their balance sheet mixes, said analysts at Keefe, Bruyette & Woods (KBW).
With some lingering investor jitters about regional banks, mid-sized lenders including Citizens, KeyCorp (KEY.N), opens new tab and Truist (TFC.N), opens new tab are likely to be in the spotlight too, as will Discover Financial Services (DFS.N), opens new tab, whose compliance problems helped make it a takeover target.
“KeyBank is well capitalized with strong credit quality and deposit profiles,” a bank spokesperson said, adding Key also has a moderate risk profile with a wide range of funding sources.
Spokespeople for Wells Fargo, Citi, Morgan Stanley, Truist and M&T Bank declined to comment while Goldman Sachs, JPMorgan, Citizens and Discover did not respond to requests for comment.
CRE EXPOSURE
The industry has performed well in recent years, although some critics say the tests are too easy. The Fed faced criticism after the 2023 bank failures for not having probed lenders’ ability to withstand higher rates, for example.
Analysts expect all 32 banks will show capital in excess of regulatory minimums. Last year, the central bank found the 23 banks tested would suffer a combined $541 billion in losses in a severe economic downturn, but that would still leave them over twice the capital required under Fed rules.
This year’s test is similar in its severity, but includes around 10 banks that are tested less frequently.
The Fed’s 2024 “severely adverse” scenario envisages the unemployment rate jumping 6.3 percentage points, compared with 6.4 points in 2023, to a peak of 10%. It includes sharper declines in the stock and bond markets this year, but slightly less severe dips in home prices and the overall economy.
As with 2023, the test also envisages a 40% slump in CRE prices, an area of concern as lingering pandemic-era office vacancies and high rates continue to stress landlords.
How well a bank performs dictates the size of its stress capital buffer (SCB) – an extra cushion of capital the Fed requires banks to hold to weather the hypothetical economic downturn, on top of regulatory minimums needed to support daily business. The larger the losses under the test, the larger the buffer.
Piper Sandler and KBW analysts predict that SCBs will mostly be flat across the group, although KBW expects Citi’s will fall after the bank sold most of its international consumer loans and that Goldman’s will likewise decline thanks to lower exposure to equity and real estate investments. M&T Bank’s efforts to reduce its CRE exposure should also result in a smaller SCB, said KBW.
KeyCorp and Truist, meanwhile, could experience an increase in their SCBs from a hypothetical hit to their income, KBW said.
Christopher Wolfe, head of North American banks ratings at Fitch, said investors will be watching how banks’ CRE loans perform.
“The banks have been keeping aside reserves of up to 10% for the office loan portfolio and CRE will be a focus but mainly for regional banks compared to large lenders,” he said.
Canadian crypto and Web3 startups could benefit from “lower taxes” and regulations that cater to “pre-commercial specialist technology companies,” said a Toronto ETO official.
Hong Kong government entities dedicated to attracting foreign investments visited a tech conference in Toronto, Canada, to advertise its offshore ready-to-move technology hub for Canadian crypto and Web3 startups.
The Hong Kong Economic and Trade Office in Toronto (Toronto ETO), Invest Hong Kong (InvestHK) and StartmeupHK (SMUHK) co-hosted an event at Collision 2024 in Toronto, highlighting Hong Kong’s crypto-centric landscape.
Speaking at the event, Toronto ETO director Emily Mo underscored existing startup-friendly regulations, such as lower taxes than in Canada and Hong Kong’s willingness to work with “pre-commercial specialist technology companies.” She added:
“There is a creative mindset on Web3/virtual assets developments. Fintech, health technology, green technology and property technology, etc, are trending in Hong Kong and Asia these days.”
Tax treaty between Canada and Hong Kong
Mo said that Canadian businesses in Hong Kong are allowed to receive public and private funding.
The governments of Canada and Hong Kong have had a double tax agreement in place for more than a decade. It was designed to avoid double taxation and prevent fiscal evasion regarding taxes on personal and corporate income.
On June 22, Hong Kong Legislative Council member Johnny Ng Kit-Chong announced the formation of the Subcommittee on Web3 and Virtual Asset Development to promote the development of Web3 and digital assets in Hong Kong.
The council seeks feedback on several critical aspects of Web3 policy development, including balancing technical, legal and regulatory frameworks to create a cohesive environment for Web3 development with robust and clear regulations.
Crypto exchange exodus in Hong Kong
In May, all crypto exchanges operating without a license in Hong Kong were forced to shut down. While more than 20 exchanges had initially applied for a crypto license, most withdrew it after failing to meet the set requirements.
One Hong Kong-based cryptocurrency exchange, Gate.HK, said it would relaunch its services after reconstructing its platform to comply with Hong Kong’s regulatory requirements. These requirements include establishing Anti-Money Laundering and Counter-Terrorist Financing measures. The company stated:
“Gate.HK is actively working on the aforementioned overhaul. We plan to resume our business in Hong Kong in the future and contribute to the virtual asset ecosystem after obtaining the relevant licenses.”
Crypto exchanges that retracted their license applications include prominent global players such as OKX, Huobi HK and Bybit, among others.
Data from Cointelegraph Markets Pro and TradingView showed BTC price strength staging a tentative recovery after the Wall Street open.
Bulls had suffered the day prior, as a trip to seven-week lows of $58,500 sparked a cascade of capitulations.
Bitcoin’s relative strength index (RSI) reading on four-hour timeframes hit its lowest levels since August 2023 — the last time BTC/USD gave up bull market support lines such as the short-term holder aggregate cost basis.
“Range held where it needed to,” popular trader Daan Crypto Trades confirmed in one of his latest updates on X.
“Yesterday was the largest net selling day in Bitcoin in over a year. RSI levels also hit levels not seen in a year.”
Data from monitoring resource CoinGlass put total BTC long liquidations for June 24 at just under $150 million.
“Massive liquidity zone at $65K and all the way up to that point,” Daan Crypto Trades continued.
“I think that would be a good level in the short term to target and see how the market looks by then. Invalidation is losing the range low at ~59K.”
Talk of the psychological — if not physical — impact of the Mt. Gox bankruptcy proceedings continued to circulate.
“We think there will continue to be selling pressure in the market as markets try to digest what 140,000 BTC means for markets and prices that in,” trading firm QCP Capital wrote on the topic in part of its latest update to Telegram channel subscribers.
“Existing Mt Gox creditors are probably unhedged given how expensive it is to hold perp positions and option positions for long periods of time.”
QCP noted that BTC’s price had bounced near its 200-day exponential moving average (EMA), currently at almost exactly $58,000. The last time BTC/USD traded below that trendline was in October.
Bitcoin squares off with U.S. dollar
Fellow trader Skew nonetheless warned of ongoing strength for the United States dollar — traditionally a headwind for risk assets and crypto — and suggested that this would continue in the short term.
Applying Elliott Wave theory to the U.S. Dollar Index (DXY), however, Matthew Dixon, CEO of crypto rating platform Evai, argued that the picture was conversely bearish for dollar bulls.
“A valid 5 waves down for DXY is a very promising sign for BTC & Crypto,” he commented on the 15-minute chart.
“If we now get a three wave retracement, ideally to around the 0.618 Fib then we would expect a further 5 waves down as a minimum, which would give risk assets a further boost.”
Recently, a new Bitcoin-based protocol called MetaID has been released, with the ambitious goal of building Web3 entirely on Bitcoin. The devs behind MetaID believe that Bitcoin is the most suitable carrier for Web3. While this may seem like an ambitious plan, judging from the protocol’s history and the release of related infrastructure, it appears that they have been preparing for this protocol for a long time. In fact, few Web3 applications based on the MetaID protocol are already running on Bitcoin.
The following is an interview with Sunny Fung, one of the initiators of the MetaID protocol, conducted by Bitcoin columnist Clarissa Yorke.
Clarissa: Can you please explain what MetaID is?
Sunny: MetaID is the first designed specifically for building Web3 apps on Bitcoin. Here’s a simple example: Imagine a decentralized version of X.com and Telegram built on Bitcoin using MetaID. With MetaID, these apps could interact seamlessly, allowing you to send a DM from your X account directly to a Telegram user. The best part? Your data is secured by Bitcoin’s network, meaning no central authority can ban your account or delete your info. While many people see Bitcoin primarily as digital gold, we believe its potential goes way beyond that. Bitcoin’s UTXO architecture and ability to store data on-chain make it the perfect foundation for Web3 apps.
So MetaID is a protocol about enabling web3 on Bitcoin.
Clarissa: Could you tell me other aspects that make MetaID stand out compared to the others?
Sunny: The biggest difference between MetaID and other protocols is that MetaID organizes scattered on-chain data into tree-like structures, using ‘people’ as the classification method. Data from other protocols is like scattered stones and bricks, while MetaID data is like piles of structured building materials classified by ‘people’, making it easy for us to build skyscrapers.
Plus, MetaID introduces models for declarative modification, deletion, hiding, and privacy handling of data. These data processing capabilities are precisely what other protocols are missing, and they’re a must for building large-scale Web3 apps.
Clarissa: Please explain history of MetaID.
Sunny: MetaID isn’t a new protocol created in 2024. The idea came in 2020. The first version of MetaID was released in April 2020, based on the MetaNet protocol, and has undergone nearly 4 years of development. Before the release of v2, MetaID had already accumulated over 170,000 users and more than 21 million transactions with more than 10 MetaID apps running at its peak.
Clarissa: Which parts of the ecosystem are already complete and which are being worked on to be launched in the near future?
Sunny: Yes. over the past year, we have done a lot of work for MetaID v2. It has truly been an arduous process.
Luckily, The main protocol is now complete, and theoretically, we can start building Web3 apps on Bitcoin from today. But having just the protocol isn’t enough. That’s why we’ve also built a lot of infrastructure, including the open-source MetaID indexer (https://github.com/metaid-developers/man-indexer) and MetaID dev SDKs (https://github.com/metaid-developers/metaid).
Currently, our ongoing work mainly focuses on launching MRC20, a MetaID asset issuance protocol, and enabling cross-chain functionality.
Clarissa: Could you give me some more detail on how the PIN data works?
Sunny: Sure, PIN is the core concept of MetaID.
PIN is the smallest data unit and the most core concept in MetaID. Each PIN is like a brick of Lego, different PINs can be combined to create various Web3 applications. Eeach PIN inscribed is an NFT and introduced capabilities such as creator, holder, modification, deletion, hiding, encryption, and a POP value for value assessment. As a result, various complex Web3 applications and DataFi applications can be built using PINs.
I hope this fig can roughly explain how PIN organizes data:
Clarissa: Could you explain me a little more about data being inscribed as an NFT? It seems to me something amazing.
Sunny: Yes, making data into NFT is interesting. We’ve drawn inspiration from Ordinal theory and the colored coins principle, where we color and label each satoshi on the Bitcoin network as a piece of on-chain data. Since a satoshi is the smallest unit in the Bitcoin network, it is atomic, indivisible, and can be freely circulated. Therefore, in MetaID, all data is a satoshi and also an NFT.
Therefore, PIN=Sats, it also gains security properties from Bitcoin.
Afterword
In the context of the thriving Bitcoin ecosystem, MetaID bringing more possibilities to Bitcoin is a very good thing for the industry. It remains to be seen whether Bitcoin has the natural advantages in the future Web3 competition as Sunny Fung suggests. Additionally, whether the protocol can be adopted by a wider range of developers also seems to be a major challenge that MetaID must address.
A “German Government (BKA)” labeled cryptocurrency wallet has sold over $54 million worth of Bitcoin.
The German government’s wallet sold 900 Bitcoin in three individual transactions on June 25.
The first 200 BTC transaction was sent to the Coinbase exchange, while the second 200 BTC transfer was sent to the Kraken exchange.
However, a third transaction, worth 500 BTC, or over $30 million, was sent to wallet “139Po,” which remains unknown, according to onchain intelligence provider Arkham Intelligence.
While wallet “139Po” remains unknown, it is not the first time the German government has interacted with it. The German government previously sent 800 BTC to the address on June 20 and another 500 BTC on June 19, just six days ago.
Following today’s transfers, the wallet still holds 46,359 Bitcoin, according to Arkham Intelligence.
Will the German government tank Bitcoin below $60,000?
The government-labeled wallet holds over $2.8 billion worth of BTC and could introduce significant selling pressure that could tank Bitcoin’s price below the key $60,000 psychological mark.
Bitcoin price has been in a downtrend, falling 11% on the monthly chart and over 7% on the weekly, trading just above $61,000 as of 9:40 am UTC, according to Bitstamp data.
According to popular analyst Willy Woo, technical chart patterns suggest that Bitcoin might experience a correction lasting up to four weeks before its price rally resumes.
The analyst wrote in a June 22 X post to his over 1.1 million followers:
“Eyeballing this model… probably 1-4 weeks more of cooling down before #Bitcoin price action is sufficiently boring. Chart: Intensity of speculators playing casino games.”
More Bitcoin selling pressure from Germany and Mt. Gox?
The German government-labeled wallet first sparked suspicions of potential Bitcoin selling on June 19, when it executed a 6,500 BTC transfer worth over $425 million.
Besides the transfer to the untagged wallets, the majority of the Bitcoin is transferred to centralized exchanges, which signals that the government is potentially looking to sell Bitcoin.
Prior to the transfer, the wallet held nearly 50,000 BTC since February 2024. The funds are believed to have been seized from the pirated movie website operator Movie2k.
However, July could introduce more Bitcoin selling pressure since collapsed cryptocurrency exchange Mt. Gox announced that would start repaying its defunct users.
More than $9.4 billion worth of Bitcoin is owed to approximately 127,000 Mt. Gox creditors, who have been waiting for over 10 years to recover their funds. This could introduce significant selling pressure for Bitcoin.
Bitcoin (BTC) failed to reclaim $65,000 after the June 18 Wall Street open as analysts predicted further BTC price downside.
Moving averages topple as BTC price goes under $65,000
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD struggling to maintain support near key trendlines.
Bitcoin shed another 3% on the day, continuing a downtrend now responsible for up to $7,900 of losses since it began on June 9.
With various support levels now on the radar, market participants began to warn that many of these lacked conviction under current conditions.
For Keith Alan, co-founder of trading resource Material Indicators, multiple moving averages (MAs) were now a problem after spot price slipped through them.
“I set a trailing stop loss before leaving town to protect some profits in case Bitcoin dumped. That wick to $64k last night scaled me out of a position,” he revealed to followers on X.
“Hopefully I’ll be able to buy back cheaper and won’t regret that move. I’m optimistic. Losing the 21, 50 and 100-Day moving averages are not exactly shining beacons of strength.”
Next up for a retest, as Cointelegraph reported, was the short-term holder cost basis at just under $64,000 as of June 18.
“BTC approaching short-term holders’ cost basis around $63.8k, don’t want to see consecutive days closed below. Typically serves as a good line in the sand for trends,” William Clemente, co-founder of crypto research firm Reflexivity, wrote in part of a commentary on the topic.
Analyzing order book activity, popular trader Daan Crypto Trades warned that “spoofing” was rife, with large blocks of liquidity being posted and removed in a possible attempt to drive BTC price in a certain direction.
“A good bunch of those orders got filled,” he acknowledged as BTC/USD headed lower after the Wall Street open.
Altcoins lose big as Bitcoin “sneezes”
Updating Telegram channel subscribers, trading firm QCP Capital offered an alternative perspective on crypto market forces.
Far from bad news, it suggested, Bitcoin and altcoins were suffering from a lack of news altogether.
“While BTC seems to have sneezed, alts seemed to have caught a cold as they drop 20-30% over the weekend,” it wrote.
“We attribute this weakness in majors to a lack of news flow. Boring markets usually shakes out weak hands, and nobody likes to pay 11% ann. to hold a long position in perps.”
QCP thus suggested a wait-and-see approach to “boring” markets.
The total altcoin market cap traded down 7.5% on the day at $219.06 billion.
Ether’s price reaching the $10,000 mark could be the most “asymmetric bet” in the current cryptocurrency market conditions, according to one popular analyst. Can Ether reach the $10,000 mark during the current bull cycle?
Ether to $10,000 could be the best bet in crypto
Ether’s price reaching $10,000 could be the best bet in the current market, according to popular crypto analyst Tyler, who wrote in a June 16 X post:
“The most asymmetric bet in crypto today is Ethereum to $10,000. As annoying as that is, just the way the chips have fallen. We trade the market, not our emotions.”
Ether’s price is down over 4% on the weekly chart, trading just below the $3,400 mark as of 1:10 pm in UTC, according to TradingView data.
Ether’s price has been in a downtrend for over two weeks since May 27, when it rose to a range high of $3,939 before being rejected from the $4,000 psychological mark.
Can Ether ETFs boost ETH’s price to $10,000?
Despite the bullish prediction, Ether is still struggling to rise above the $4,000 psychological mark.
Moreover, Ether is currently down over 30% from its all-time high of $4,891 in November 2021. A hypothetical move to the $10,000 mark would imply an Ether price increase of over 194% from the current levels.
ETH’s price faces significant resistance at the $3,500 mark. A potential move above would liquidate over $534 million of cumulative leveraged short positions across all exchanges.
Short liquidations would surpass $1 billion if Ether were to rise above the $3,586 mark, according to CoinGlass data.
Ether’s price action could be boosted by institutional inflows from the first spot Ether exchange-traded funds (ETFs), which are expected to start trading by July 2, according to Bloomberg ETF analyst Eric Balchunas.
However, Securities and Exchange Commission Chair Gary Gensler provided a broader timeframe for when spot Ether ETFs might begin trading, indicating that it could happen within the next three months by the end of September.
In Bitcoin’s case, ETF inflows were a significant part of its price rally. By Feb. 15, Bitcoin ETFs had accounted for about 75% of new investment in the world’s largest cryptocurrency as it surpassed the $50,000 mark.
Ether supply on exchanges hits eight-year low
Ether could also see a price breakout due to a potential supply squeeze, as Ether’s supply on cryptocurrency exchanges sunk to an eight-year low.
This could translate into more upward momentum, according to popular crypto analyst Quinten. Quinten François wrote in a June 18 X post to his 112,000 followers:
“Ethereum supply on exchanges is at an 8-YEAR LOW. Meanwhile, institutional demand will be unlocked through the ETH ETF in July. You don’t need to have a degree to understand what is about to happen.”
Brazil’s tax authority is reportedly planning to seek information from foreign cryptocurrency exchanges to find out how they operate in the country and whether its citizens are complying with the country’s new tax laws or not.
The Receita Federal do Brasil (Federal Revenue of Brazil) is expected to publish an ordinance summoning these firms for further information later this week, according to a June 18 report from Reuters citing comments from Brazilian officials.
“It’s an area of concern for us to understand first how they operate here, whether there’s any illegality or not,” Andrea Chaves, DFR’s Deputy Secretary of Inspection told Reuters.
“We are also concerned about having information on Brazilian wealth subject to taxation.”
Up until now, only local cryptocurrency exchanges have been obligated to report transactions conducted on their trading platforms.
Last December, Brazil passed a law mandating Brazilians to pay a 15% income tax on cryptocurrency profits and dividends earned on foreign exchanges.
The Brazilian tax authority intends to collect around $4 billion (20 billion Brazilian reals) in the 2024 financial year.
Binance, Coinbase, OKX and KuCoin are among the notable trading platforms operating in the country. Binance currently holds the largest market share in Brazil, accounting for 79% of all transactions — though it has lost some of its dominance to Brazil’s Mercado Bitcoin and Mexico-based Bitso in recent months.
Meanwhile, Brazil saw a spike in cryptocurrency trading activity in the first few months of 2024, increasing 30% year-on-year to $6 billion between January and May.
A recent Kaiko report revealed that it is the largest market player in Latin America and the seventh-largest worldwide in terms of fiat currency trade.
Stablecoin transfers remain the main source of cryptocurrency activity in Brazil.
Prospects for retail crypto trading in Canada are looking good, and a convergence of factors, including the local regulatory environment, is likely to continue driving market growth.
“We have certainly seen retail come back,” Dean Skurka, CEO of Canadian crypto asset platform WonderFi, told Cointelegraph’s Sam Bourgi at the Collision event in Toronto.
Canada experiences lucky convergence for crypto
Skurka said the convergence of the interest rate cut by the Bank of Canada, leading to greater discretionary spending by the public, along with strong interest in Bitcoin and Ether exchange-traded funds that put crypto “in favorable standing [with] a broader audience” and the expected impact of the BTC halving promise a strong retail market.
“It’s not going to happen overnight,” Skurka said, but indicators of public receptiveness to crypto are there. New signups spiked at WonderFi along with the all-time high price for BTC, he noted. He expected to see it in the next six to 12 months.
WonderFi, which had early backing from billionaire celebrity Kevin O’Leary, has acquired an impressive stable of crypto firms that it plans to combine into a single entity, thanks to its merger with Coinsquare in July 2023. That firm is regulated by the Canadian Investment Regulatory Organization.
WonderFi has also acquired Bitbuy and Coinberry. It reached $1 billion in assets under management at the end of 2023.
WonderFi looks abroad and appreciates home
Canadian regulators have addressed staking and the crypto spot market, and Skurka predicted crypto derivatives — such as futures — to be the next to be regulated. As WonderFi begins implementing plans to expand into the Asia-Pacific region, it has gained new perspective on the Canadian regulatory environment.
Canadian regulators “further ahead” compared with their Asia Pacific colleagues, Skurka said. The firm’s experience with Canadian regulators will inform its actions in APAC markets. WonderFi will make public its activities in APAC within months.
Other industry figures have shown less enthusiasm for Canadian regulation. Rules introduced by the Canadian Securities Administrators in February 2023 led to the withdrawal of several crypto firms from the country.
A large memecoin holder, or whale, has made a $3.7 million profit after selling their MAGA (TRUMP) tokens amid the current market sell-off.
Whale wallet “0x52C0” has sold over 171,000 TRUMP tokens for 414 Ether worth $1.44 million in the past 24 hours, for a total profit on their investment of over $3.7 million.
The whale has been selling their TRUMP tokens at the $8.38 mark, according to a June 18 X post by Lookonchain.
Looking at the savvy whale, 28% of their wallet still consists of TRUMP tokens worth $372,000. Their largest holding is the BasedAI (BASEDAI) token, worth $921,000 at the time of writing and accounting for over 71% of the wallet.
At its peak valuation on June 2, the whale wallet was worth $7.53 million, according to CoinStats.
Why is the TRUMP token down?
The whale started locking in their profits just as the TRUMP token started its price decline.
The token fell over 30% in the 24 hours leading up to 9:00 am UTC to trade at $7.88. The memecoin is down over 37% on the weekly chart, according to CoinMarketCap data.
Trump-related cryptocurrencies started falling amid rumors that Donald Trump’s team launched an “official” token on Solana.
Pirate Wires claimed in a June 17 X post that Trump’s 18-year-old son, Barron, was “spearheading” the token under the name TrumpCoin (DJT).
However, Trump’s team hasn’t confirmed the token launch, and blockchain data firms such as Bubblemaps seem confident that DJT isn’t linked to the presidential candidate.
Large holders are taking note of the marketwide memecoin sale, which saw some of the most popular meme tokens log double-digit gains.
Leading memecoins Dogecoin and Shiba Inu fell 13% and 18% on the daily chart, while Pepe tanked 13%, and Solana-based Dogwifhat (WIF) fell over 20%, according to CoinMarketCap data.
The total market capitalization of memecoins fell 9.4% to $46.6 billion in the past 24 hours, while trading volume rose 79% to $6.25 billion.
Other TRUMP token whales have also taken note of the decline and started locking in profits. Wallet “0x35D1” sold their tokens for a $648,000 profit, while trader sighduck.eth sold their tokens for an over 1,500% gain of $1.88 million.
The Central Bank of Ireland has approved 15 different VASPs from June 7, 2024, including Crypto.com, Coinbase, Gemini, Ripple and others.
The Central Bank of Ireland (CBI) has given a nod to another major cryptocurrency company, Crypto.com, as a virtual asset service provider (VASP).
Crypto.com, one of the world’s largest crypto trading platforms, announced on June 11 that it had received VASP approval in Ireland. The approval allows Crypto.com to expand its offering in the country, including crypto-to-fiat exchanges and fiat wallets.
Crypto.com’s president and chief operating officer, Eric Anziani, said the approval shows the company’s commitment to compliance and responsible innovation.
“We are excited to broaden our offering in Ireland, enabling consumers to engage with the most comprehensive crypto product offering,” the exec added.
Crypto.com declined to comment to Cointelegraph on the specifics of new crypto services enabled in Ireland with the latest VASP approval.
Ireland has approved 15 entities as VASPs
In obtaining the approval, Crypto.com joins several crypto firms regulated by the country’s central bank, including the United States-based crypto exchange Coinbase.
The full list of registered VASPs in Ireland features 14 entities as of June 7, including major industry firms like Ripple, the Winklevoss brothers’ Gemini exchange, MoonPay, Standard Chartered’s Zodia custody platform, Paysafe and others.
Seven companies on the list received approvals in Ireland in 2023. In 2024, the CBI approved four others, including Foris DAX Global, Fortuna Digital Custody, Ramp Swaps and Crypto.com.
Some crypto firms opted to leave Ireland
The Central Bank of Ireland’s approval of Crypto.com marks another milestone in the country’s growing interest in the crypto industry.
Coinbase, the largest crypto exchange in the U.S. by trading volumes, selected Ireland as its European crypto hub in late 2023.
Coinbase chose Ireland to help it comply with Europe’s major cryptocurrency regulatory framework, the Markets in Crypto-Assets Regulation.
Other major companies, including Ripple and Gemini, have also been cementing their presence in Ireland while facing issues from U.S. regulators.
On the other hand, Circle Internet Financial — the company behind the world’s second-largest stablecoin, USD Coin — announced plans to return to the U.S. and move away from Ireland in May 2024.
Data from Cointelegraph Markets Pro and TradingView showed a 3% dip taking Bitcoin to lows of $67,320 on Bitstamp after the daily close.
Lacking support at the key $69,000 level, Bitcoin bulls failed to stave off a downward move through thin exchange order book liquidity.
The day prior, Keith Alan, co-founder of trading resource Material Indicators, had warned that insufficient bids could be a warning sign for BTC price strength.
“Sure we have some laddered bid support in here, but not a heavy, heavy concentration of it — and really, it’s not even heavy down to $60,000 if I can be completely honest,” he said during his latest YouTube update.
An accompanying chart covered order book liquidity for the BTC/USDT pair on the largest global crypto exchange, Binance.
In a subsequent post on X, Material Indicators noted that with the latest move down, Bitcoin had formally rejected $69,000 as support and had also given up the 21-day moving average — a key short-term trendline.
“Support at the 21-Day Moving Average and the R/S Flip at $69k have both been invalidated,” it read.
“This move isn’t over. In fact I expect these killer whale games to continue up to and through JPow’s comments on Wednesday and economic reports on Thursday.”
As Cointelegraph reported, the week’s main potential volatility catalyst for Bitcoin and crypto price action is United States macroeconomic data — the Consumer Price Index (CPI) and Producer Price Index (PPI) — along with the Federal Reserve’s latest interest rate decision and accompanying press conference by Chair Jerome Powell.
“So far CPI/PPI has been around the highs of this range & FOMC resulting in local lows,” popular trader Skew continued on the topic.
Mixed opinions on Bitcoin support
In his own market analysis, meanwhile, fellow trader and commentator Credible Crypto suggested that the outcome of the down move may not be as radical as a trip to $60,000.
With liquidity being added and pulled from the market at will by large-volume traders, appetite for BTC could spare bulls any lower than even $65,000.
“We continue to see spot absorption on each and every move down, even on lower timeframes,” he summarized to X subscribers.
Credible Crypto noted that overhead resistance at $72,000 had been “pulled immediately” once Bitcoin began reversing.
“What are the odds we front run range lows and 62-65k and just reverse from here? I think they are decent,” he concluded.
“No guarantees of course, but we will know soon enough with developing PA over the next 24 or so hours.”
As BTC continues to trade sideways at high levels, the bull market momentum is unstoppable, and platform tokens are once again drawing attention.
This article analyzes and compares the platform tokens of several leading platforms, focusing on three dimensions: platform token earnings, buyback and burn, and fee discounts for investors’ reference.
The earnings from platform tokens consist of two major parts: active earnings, which refer to the token’s own price increase, and passive earnings, which include dividends, new token offerings, airdrops, and other benefits. According to CoinMarketCap data, the performance of the top ten platform tokens by market capitalization over the past year is as follows:
Data shows that MEXC’s platform token MX has increased by 101% over the past year, surpassing even BNB, while OKX’s platform token OKB has seen an annual increase of less than 5%.
Additionally, comparing other second-tier exchanges, Bitget’s passive earnings (from new token offerings and airdrops) fall far short of MEXC’s. MX’s passive earnings are significantly higher. According to statistics, since last July, MEXC has been airdropping tokens to MX holders every month, with an average of over 150 token airdrops each month. Over six months, a total of 927 project tokens were airdropped, resulting in an APY of up to 76%. As shown below:
In 2024, MEXC further increased its airdrop intensity, with an average of nearly 250 tokens airdropped per month from January to April. The APY reached 107%, far surpassing BGB holders.
According to the MEXC official website, airdrop participation is a simple process. Users need only hold MX to receive all new token airdrops for free. Compared to other platform tokens, MEXC’s airdrops have a significantly lower entry barrier, allowing more MX holders to enjoy higher returns.
In fact, MX’s token price is severely underestimated during the bull market. After users receive token airdrops by holding MX, if they convert these earnings into MX tokens, they can easily achieve a compounding effect, thus achieving tremendous profit potential.
Trading fee discounts: MX offers the biggest savings
Using platform tokens to offset trading fees is a common promotional strategy on cryptocurrency trading platforms. Each platform has its own discounts, as summarized below:
Conclusion
In the bull market’s complex investment landscape, cryptocurrency users may consider positioning themselves in platform tokens that have stable value support, excellent performance, and from up-and-coming platforms that can generate various expected returns. MX is an important alternative in this regard, as it can effectively mitigate investment risks and achieve better investment returns.
Former United States President Donald Trump is ramping up his advocacy for cryptocurrency, now setting his sights on becoming the “crypto president.”
He made the comment during a fundraising event in San Francisco, co-hosted by Craft Ventures’ general partner, David Sacks, and tech billionaire Chamath Palihapitiya, according to a recent Reuters report.
At this gathering, Trump purportedly affirmed his commitment to cryptocurrency, asserting his readiness to champion the industry’s advancement, while cautioning against the Democratic Party’s purported inclination towards stringent regulations.
The fundraising event proved to be a significant boon for Donald Trump’s promotional efforts, reportedly netting a substantial $12 million in support ahead of the November 5 U.S. presidential election.
Trump’s Crypto Support Comes in Contrast to Biden
Donald Trump’s embrace of cryptocurrency aligns with his broader strategy to distinguish himself from the policies espoused by the current administration, particularly in light of President Joe Biden’s recent decision that drew ire from the crypto community.
Just a week prior, Biden faced criticism after vetoing a resolution aimed at overturning the controversial U.S. Securities and Exchange Commission (SEC) Staff Accounting Bulletin (SAB) No. 121.
This bulletin, which mandates institutions holding cryptocurrency assets to record them as liabilities on their balance sheets, has been a point of contention within the industry.
Trump’s vocal support for cryptocurrency is not new, as evidenced by several recent public statements.
On May 26, he reiterated his stance that the United States must assert its dominance in the crypto sector.
“Our country must be the leader in the field, there is no second place,” he said at the time in a post on Truth Social, a social media platform owned by Trump Media and Technology Group.
Furthermore, he has recently announced that his presidential campaign would accept cryptocurrency donations.
The fundraising page, which allows eligible individuals to donate in crypto using Coinbase Commerce, displays logos for Bitcoin, Ethereum, Dogecoin, Shiba, XRP, USD Coin, SOL, and 0x (ZRX).
Earlier this month, Trump also made a promise to grant a presidential pardon to Ross Ulbricht, the founder of Silk Road, if he is re-elected in November’s election.
Voters Consider Candidates’ Stance on Crypto
As reported, a survey conducted by the Harris Poll has revealed that one in three voters in the US consider a candidate’s position on cryptocurrencies before making their voting decision.
Another survey conducted by leading crypto venture capital firm Paradigm reveals that Trump’s poll numbers for the 2024 US Presidential Election enjoy significant support from the crypto community.
The survey, which included 1,000 registered voters, found that 48% of crypto owners plan to vote for the former president, while 39% intend to vote for current U.S. President Joe Biden.
Likewise, a recent report from Coinbase claimed that California voters who own cryptocurrencies are expected to have a significant impact on the 2024 elections.
From June 6 to 9, more than 185 million people from the European Union’s 27 member states voted for candidates to serve a five-year term in a new European Parliament, the legislative branch of the political bloc.
This pivotal event will shape the political direction of the EU for five years, and crypto and blockchain are no exception.
The election results are mixed: The Christian Democrats won 10 seats, while the Social Democrats hung on, losing only four seats, and the pro-business (and pro-crypto) Renew Europe Group lost 23 seats.
The Greens also took a beating, losing 18 seats, while far-right parties made notable gains.
So, what plans do these parties have for the crypto and blockchain industries?
Cointelegraph reviewed the election manifestos of various parties and interviewed a number of members of the European Parliament about their plans for the future.
European People’s Party (EPP), or Christian Democrats — 186 seats (gained 10)
The EPP Group, the largest and one of the most influential political groups in the European Parliament, generally holds a cautious yet forward-looking stance on cryptocurrencies, the digital euro and blockchain technology.
The group recognizes the transformative potential of blockchain and digital currencies in enhancing financial services and economic efficiency. However, it emphasizes the need for robust regulatory frameworks to prevent misuse, ensure consumer protection and maintain financial stability.
MEP Stefan Berger, a member of the EPP Group who helped negotiate the EU’s major crypto regulation — Markets in Crypto-Assets (MiCA) — told Cointelegraph:
“Crypto assets are gaining importance and have their place as a complement to the traditional financial system. We see crypto assets as forward-looking technologies with diverse possibilities for consumers and businesses and support balanced regulation that allows room for further development and innovation.”
The EPP supports the current MiCA law but also sees the potential for future adjustments. Berger said, “MiCA creates trust in the industry, provides security for founders and offers the European Economic Area a significant competitive advantage. It is clear that in the future, we will also need a legal framework for NFTs that benefits consumers and the entire industry.”
The EPP supports a more relaxed tax policy for crypto. Berger said the party wants to “strengthen Europe as an innovation location and reject restricting the adoption of crypto assets through restrictive tax policies.”
The party is also keen to explore the potential of blockchain technology outside of crypto.
“Blockchain can bring efficiency gains in public administration processes and enable new applications. This strengthens citizens’ trust in the state and administration,” said Berger.
Progressive Alliance of Socialists and Democrats (S&D) — 135 seats (lost 4)
The S&D Group is cautiously optimistic about blockchain and cryptocurrencies. The group recognizes the potential benefits of these technologies in promoting financial inclusion and improving public services. However, its primary concern is the regulatory and social implications.
S&D calls for strict rules to prevent fraud, money laundering and tax evasion. It supports the idea of a digital euro, seeing it as a tool to increase the effectiveness of monetary policy and protect consumers.
Renew Europe — 79 seats won (lost 23)
Renew Europe, a centrist and liberal political group, has been a prominent voice in the European debate on crypto. The group held the rapporteurship for the report on digital finance, which the European Parliament approved in 2020.
Since then, Renew Europe has consistently called for a robust regulatory framework for crypto assets to ensure the EU is ready for structural digital transformations.
Renew Europe also champions a proactive, innovation-friendly approach to blockchain and digital assets. The party views blockchain technology as a key driver of transparency, efficiency and growth across various sectors.
The group supports developing and establishing a digital euro, which it sees as essential for maintaining the European Union’s competitiveness in the digital age. Renew Europe describes the digital euro as “an ambitious project that should preserve public money as a monetary anchor, strengthen Europe’s strategic autonomy in the payments sector and promote financial inclusion.”
Additionally, Renew Europe strongly advocates for a European digital identity. The party believes that a secure and universally recognized digital ID system will enhance trust in digital transactions, streamline administrative processes and improve access to public and private services.
European Conservatives and Reformists Group (ECR) — 73 seats (gained 4)
The ECR Group holds a pragmatic and cautious view on cryptocurrency, reflecting its broader conservative and reformist principles.
The group sees blockchain and cryptocurrencies as promising tools for economic growth and modernization. According to the ECR, these technologies could make Europe’s financial sector more competitive and efficient, benefiting businesses and consumers alike. It believes cryptocurrencies should be integrated into a diverse financial ecosystem and support the MiCA regulation
However, the ECR supports stringent Anti-Money Laundering measures to combat the misuse of cryptocurrencies. It also calls for robust cybersecurity measures to defend against hacking and other threats.
The ECR is skeptical about a digital euro, calling it “a solution looking for a problem” and attributing the popularity and rise of cryptocurrencies to what it describes as irresponsible monetary policy.
The group argues that existing solutions, such as instant payments, already offer the benefits touted by proponents of a digital euro without the associated risks or complications.
Identity and Democracy (ID) — 58 seats (gained 9)
While the ID Group, known for its populist and nationalist tendencies, does not have an official stance on digital currencies and blockchain, member parties such as Germany’s Alternative for Germany (AfD) have some thoughts, at least on a digital euro.
The AfD sees the euro as fundamentally flawed and unable to sustain a union of 20 diverse economies. The party thinks that euro bailouts, often at Germany’s expense, are further evidence of its structural inadequacy.
The AfD opposes the introduction of a digital euro by the European Central Bank. The party sees it as a threat to cash, which is essential to protecting individual freedom and privacy from government overreach and surveillance. The party advocates for the preservation of cash as a constitutional right, fearing that a digital euro could undermine this fundamental liberty.
In contrast, Marine Le Pen of France’s National Rally (also a member party of the ID Group) has softened her stance despite a history of skepticism toward cryptocurrencies.
After initially calling for a ban on Bitcoin in 2016, Le Pen now supports strict regulation rather than an outright endorsement of crypto or blockchain technology.
The Greens/EFA Group has no overarching policy on cryptocurrencies or blockchain.
Paul Butcher, an EFA policy adviser, explained to Cointelegraph: “As a European political party, we are an alliance of our member parties, which have different views on the subject or have not developed policies on the sector. As a result, we have not yet discussed this issue at our General Assemblies or at the EFA Congress, where our 2024 manifesto was developed.”
However, the EFA supports the principle of subsidiarity and the MiCA regulation. Butcher said the party welcomes MiCA “as a starting point for a European-wide regulatory framework on crypto assets, which by their nature cross borders and cannot be adequately regulated at the national or regional level alone.”
“However, when it comes to taxation and specific measures to promote the sector, we seek to safeguard the right of the member states and regions to legislate in these areas.”
The EFA also recognizes the potential of crypto assets to give individuals greater freedom and ownership over their financial affairs. Butcher added: “We support this competition in the traditional banking sector and would like to see it develop in line with appropriate regulations to ensure that investors are protected while still being able to choose self-custody if they so wish.”
The Greens/EFA Group takes a cautious and socially conscious stance on blockchain. It acknowledges its potential for enhancing transparency and sustainability in various sectors, such as supply chain management and energy.
However, it is wary of the environmental impact of certain cryptocurrencies, particularly those relying on energy-intensive consensus mechanisms, such as proof-of-work.
The Greens/EFA Group supports exploring a digital euro, provided it aligns with sustainability goals and contributes to social welfare.
The Left in the European Parliament (GUE/NGL) — 36 seats (lost 1)
The Left is critical of cryptocurrencies, expressing concerns over their potential to facilitate illicit activities and exacerbate economic inequality. It is wary of the speculative nature of cryptocurrencies and the risks they pose to financial stability.
According to the Left, “crypto assets are an ecological disaster.” The German Left party’s election manifesto calls for banning Bitcoin and crypto mining to save energy.
MEP Chris MacManus (Ireland) said he had “no interest in creating a market for or in fostering the use of crypto assets,” adding that “at their worst, they are pyramid schemes, or used by criminal gangs for money laundering, or defrauding working people, and they can waste huge amounts of energy for no purpose.”
“I see little or no social or economic benefit to these tools of speculation. I accept the reality that crypto assets exist, and short of banning them, they must be regulated.”
The Left supports a digital euro designed to enhance public control over the monetary system and promote economic justice. It advocates for strict regulatory measures to curb speculation, protect consumers and ensure digital financial innovations serve the broader public interest.
Non-Inscrits
Non-Inscrits are MEPs who do not belong to one of the recognized political groups listed above.
Volt Europa — 5 seats won (plans to join Renew in EU Parliament)
Volt Europe, a pro-European federalist party focused on innovation and digital rights, holds a progressive stance on cryptocurrencies.
It believes cryptocurrencies are significant within the traditional financial system and advocates for protecting users’ digital rights while ensuring compliance with financial regulations. Pauline Raabe, who handles public relations for Volt Europe, told Cointelegraph:
“Cryptocurrencies are already intertwined with the traditional financial system, as evidenced by the recent emergence of Bitcoin [exchange-traded funds]. As such, it is an asset class that is here to stay, and therefore, our main concern is its impact on society and the economy.”
Volt supports the introduction of a digital euro without limits and with remuneration to foster competition in the market for deposits and payment services. Its approach to regulation, including MiCA, emphasizes the need for clarity and consistency across the EU to avoid unnecessary red tape for investors and companies.
Regarding taxation, Volt proposes treating crypto investments like any other investments. It aims to harmonize European investment regulation to create an integrated market for financial investments. As part of this harmonization effort, the party supports the creation of mutual funds and exchange-traded funds with crypto assets.
Regarding blockchain technology, Volt sees its potential applications in digital identities, e-health and certificate diffusion. It advocates for further research and development to advance the cryptographic foundations of blockchains and support innovative firms exploring their real-world applications.
“Volt wants to triple the budget of the Horizon Europe program. To facilitate innovative startups, Volt strives to establish a full-scale European venture program and to support entrepreneurs in fitting into the regulatory framework of the EU by, for example, creating regulatory sandboxes.”
European Christian Political Movement (ECPM) — 4 seats won
According to Adriana Rus, the ECPM’s communications manager, the party generally supports technological progress as long as it “does not threaten human dignity and fundamental rights, such as the right to privacy and freedom of speech, and the environment is not harmed.”
Some ECPM members are particularly critical of initiatives like the European digital wallet and eID, believing they compromise privacy and anonymity. However, beyond these concerns, the ECPM has not established a detailed policy on cryptocurrencies.
Balancing innovation with regulatory oversight
The newly elected European Parliament will significantly influence the future of cryptocurrency and blockchain technology in the EU. Each political group has a different perspective: The EPP Group favors balanced regulation to support growth and innovation, while the S&D Group prioritizes strict rules to prevent misuse and supports the development of a digital euro. Renew Europe advocates for a proactive stance on digital assets, pushing for a digital euro and a European digital identity.
Given the Parliament’s diverse composition, debates and potential adjustments to frameworks like MiCA are expected. The presence of far-right and conservative parties adds complexity, with some skeptical of the digital euro and prioritizing stringent Anti-Money Laundering measures. Meanwhile, smaller groups like the Greens and the Left emphasize environmental concerns and social justice in digital finance.
Some euro zone banks have fallen short of the European Central Bank’s climate-related goals and may face fines, a senior ECB supervisor said in an interview published on Wednesday.
The ECB has handed banks a list of deadlines for factoring in risks relating to climate change, from floods and droughts to a transition to new energy sources, into the way they do business.
But some banks have fallen behind schedule, Kerstin af Jochnick, a member of the ECB’s Supervisory Board, told Spanish newspaper Cinco Dias.
“We have notified a few banks that, based on our current assessment, they have not met the interim milestones, which means they face the prospect of having to pay a so-called pecuniary penalty,” af Jochnick said.
International financial authorities must give consideration to legal risks surrounding the potential winding up of global banks, Swiss Finance Minister Karin Keller-Sutter was quoted as saying on Wednesday.
In an interview with the Frankfurter Allgemeine Zeitung newspaper, Keller-Sutter was asked whether rules to deal with banks deemed “too big to fail” need to be standardised internationally so that such lenders can be wound up.
Keller-Sutter said she was in contact about that with the Financial Stability Board, a body that monitors the global financial system, and other finance ministers, including Germany’s Christian Lindner, who she is meeting in Berlin.
“I’d like to raise awareness that winding up (a bank) may sometimes not be possible due to international legal risks. In the case of Credit Suisse, that was clearly a risk,” she said, referring to the Swiss bank that collapsed last year.
“There are considerable doubts that recapitalisation via compulsory participation of creditors, that is, a “bail-in”, would work,” Keller-Sutter said.
“I’m looking primarily at the United States. The big banks are heavily invested there. That’s why American supervisory authorities would have to agree to a winding up.”
Managing this risk is why the Swiss government wanted systemically relevant banks to back their foreign subsidiaries with up to 100% equity, she said.
“The equity backing of the foreign subsidiary must be so large that it can be sold or liquidated in a crisis without damaging the Swiss parent company. That was exactly the problem with Credit Suisse,” she said.
The demise of Credit Suisse roiled financial markets and led to its takeover by long-term rival UBS, prompting the Swiss government to set out its own measures for too big to fail entities in April.
UBS formally absorbed the parent company of Credit Suisse last week. Ratings agency S&P on Tuesday revised up UBS Group AG’s outlook to stable from negative, saying that “tail risks from the group’s integration and restructuring have eased”.
Bitcoin gained 2.5% on June 3 to $69,400, sparking hopes that it might reclaim the $69,000 support level for the first time in 11 days. This positive price movement coincided with a surge in the Bitcoin futures premium to its highest level in seven weeks. But what does this mean for the sustainability of Bitcoin’s rally toward $70,000?
GameStop mania and weaker odds of Fed’s interest rate cuts
Some analysts believe that Bitcoin’s recent price jump was partly influenced by GameStop’s (GME) impressive 36% rally. This surge in GameStop stock rekindled memories of the 2021 anti-traditional finance sentiment when retail investors banded together to challenge the status quo. This sentiment appears to have spilled over into the memecoin sector as Floki gained 16.5%, Dogwifhat (WIF) 9%, and Bonk rallied 7.5%.
Additionally, comments from the Federal Reserve Bank (Fed) of Minneapolis’s Neel Kashkari have added to the uncertainty. The Fed official stated that he doesn’t foresee a rate cut anytime soon, citing Americans’ strong aversion to inflation. This stance, although not universally shared among Fed officials, is seen as negative for the housing and stock markets. As a result, some investors are turning to alternative investments like Bitcoin.
Global geopolitical tensions have also played a role in Bitcoin’s recent price action. Australia’s decision to order Chinese investors to reduce their stakes in a rare earths miner has heightened uncertainty in global markets. This move coincided with a 1% gain in gold and a sell-off in U.S. Treasuries, with the 5-year yield dropping to 4.42% from 4.59% on May 31.
Bitcoin derivatives support further price gains
The Bitcoin futures premium reflects the difference between the monthly contracts derivatives markets and the spot level on regular exchanges. Usually, a 5% to 10% annualized premium (basis) occurs to compensate for the extended settlement. In essence, a higher premium suggests that traders are willing to pay more for future contracts, indicating bullish sentiment.
While the overall nonfungible token (NFT) space saw a 54% drop in sales in May, digital collectibles on Bitcoin reached a new milestone.
On June 4, NFT data tracker CryptoSlam showed that NFTs on the Bitcoin blockchain reached a total all-time sales volume of over $4 billion. The data combined the NFT sales, which were $3.97 billion, and the wash sales, which were $82 million.
In the last 30 days, Bitcoin-based NFTs recorded a sales volume of $171 million, taking the top spot in terms of sales volume by blockchain. The network was followed by Ethereum, which had $159 million and Solana, which recorded $90 million in the past month.
Bitcoin NFTs are still far from Ethereum
Even though Bitcoin-based NFTs are leading the charts in 30-day volumes, the network is only the fourth-largest blockchain in sales. It follows the Ronin blockchain, which holds the top three spot with $4.2 billion in all-time sales.
Solana-based NFTs hold the second place, with a $5.5 billion record for all-time sales. Meanwhile, the Ethereum network retains the top spot for NFT sales, with a whopping $43.8 billion in recorded sales.
Bitcoin NFTs also hit by market slump
The broader NFT market also saw lower sales volumes in May. On May 31, CryptoSlam showed a 54% decline in monthly NFT sales volume compared to April. In April, NFTs saw over $1 billion in sales, while May recorded a volume of $624 million.
The decline in sales volume also affected Bitcoin-based collectibles. The data showed that NFTs based on Bitcoin experienced a 68% decline in sales in May.
Bitcoin transaction value hits yearly high
Apart from Bitcoin NFTs recording a new all-time milestone for sales, the network also saw a new record in transaction value. On May 28, Bitcoin transactions reached an estimated value of over $25 billion, its highest in the last year.
Bitcoin explorer Blockchain.com showed that Bitcoin holders moved about 367,000 BTC on the blockchain on May 28. At the time, Bitcoin’s price hovered around $69,000, making the transactions worth $25.5 billion.
United States President Joe Biden has vetoed a resolution that would have overruled the U.S. Securities and Exchange Commission (SEC) Staff Accounting Bulletin (SAB) No. 121.
“This reversal of the considered judgment of SEC staff in this way risks undercutting the SEC’s broader authorities regarding accounting practices,” Biden wrote in an official response to Congress voting to repeal the cryptocurrency accounting guidelines, which requires institutions that custody crypto assets to record crypto holdings as liabilities on their balance sheets.
The guidelines were set to take effect on April 11 but were met with considerable backlash from the crypto community and lawmakers alike.
Lawmakers in the House of Representatives voted to repeal the SEC’s guidance by a margin of 228 to 182 and passed the bill to the Senate. Once there, senators voted to repeal SAB-121 by a significant margin of 60 to 38 in favor.
“We’re disappointed that the admin chose to overrule bipartisan majorities in both Houses of Congress who recognized the harm created by SAB 121,” crypto advocacy group the Blockchain Association declared in its X post.
U.S. Senator Cynthia Lummis argued that Biden went against the “will of the American people” by intervening and preventing the guidelines from being revoked.
Israel launches digital shekel experiment
Israel intends to expedite the development of its in-house central bank digital currency (CBDC), the digital shekel. The Bank of Israel (BoI) plans to involve various service providers in co-developing an advanced digital payments ecosystem centered on the digital shekel.
Project Rosalind is a joint experiment between the Bank for International Settlements (BIS) and the Bank of England. It aims to develop prototypes for an application programming interface (API).
As part of the challenge, the BoI will provide a sandbox environment attached to a layer of API. Participants will compete to build real-time CBDC payment systems for the general public.
Paraguay proceeds with crackdown on crypto mining
Property containing 2,738 crypto mining units was seized in Salto del Guairá, Paraguay after the National Electricity Administration (ANDE) detected an unmetered power connection in the area.
A bill to ban crypto mining and other crypto-related activities is before the country’s senate, pending comprehensive legislation and assurances from the national power supplier.
ANDE used artificial intelligence and power distribution analysis to zero in on the electricity theft, which it estimated was worth 1.1 billion guarani ($146,000) per month.
Five transformers were also seized on the property. The operators of the illegal operation may face criminal charges.
At least two other actions against illegal crypto farms — one in Salta del Guairá — were carried out in Paraguay in May, although those raids had much more modest results. All the government actions involved multiple agencies, including the National Police of Paraguay.
Hong Kong kicks out all unlicensed crypto exchanges
All cryptocurrency exchanges that have not applied for an operational license with the Securities and Futures Commission (SFC) of Hong Kong are legally required to cease operations in the region immediately.
In an effort to minimize risks for investors, Hong Kong regulators issued a clear ultimatum to cryptocurrency exchanges: either apply for a license by Feb. 29 or shut down their operations within three months.
During this period, more than 22 cryptocurrency exchanges applied for licenses to maintain their presence in the region. However, many of these exchanges ultimately decided to withdraw their applications just before the deadline.
While most exchanges did not provide any reasons for the surprise turn of events, Hong Hong-based Gate.HK cited the need for a “major overhaul” of its trading platform before it could comply with Hong Kong’s regulatory requirements.
The Qatar Central Bank (QCB) has completed the infrastructure for a central bank digital currency (CBDC) project and launched the first phase of an experimental project. The QCB will look at settlements of large payments among large local and international banks.
Few details of the project were released. The state news agency said it would focus on distributed ledger technology, artificial intelligence, enhancing liquidity and transactions with securities. The project will run through October.
The QCB began studying CBDC technology in March 2022 and confirmed that it was launching a project in June of that year. According to a press report, QCB governor Sheikh Bandar bin Mohamed bin Saoud al-Thani said at the Qatar Economic Forum in May, “We are in the foundation stage and evaluating the pros and cons of issuing the CBDC.”
Keeping up with the neighbors
The neighboring United Arab Emirates (UAE) was a founding member of the mBridge project, along with China, Hong Kong and Thailand. It has already used mBridge to transfer remittance payments to India and for wholesale transfers among the mBridge project members. The UAE also participated in a CBDC proof-of-concept, called Project Aber, with Saudi Arabia that ended in 2020.
A day before the announcement of the CBDC project, the QCB launched a new fintech sandbox. The Express Sandbox offers a “reduced testing period, rapid testing cycles, and a streamlined overall evaluation process” for eligible participants. Like the new sandbox, the CBDC project was described as part of official national development strategies, although none of the strategies mention CBDC explicitly.
Cryptocurrency frowned on
The Qatar Financial Centre Regulatory Authority — a business development jurisdiction in the country — banned virtual asset services from operating there in 2020. The Financial Action Task Force criticized Qatar in 2023 for not enforcing that ban and lacking an understanding of “more complex forms of money laundering and terrorist financing.”
Rumors circulated in the crypto community in March that the Qatar Investment Authority would invest heavily in Bitcoin, but there is doubt about the likelihood of that.
The International Monetary Fund now expects China’s economy to grow 5% this year, raising its forecast from 4.6% a few weeks ago to reflect a strong expansion at the start of 2024 and additional support from the government.
The Fund expects the momentum to continue, raising its gross domestic product forecast for next year to 4.5% from 4.1%, according to a press release published Wednesday. China is targeting growth of around 5% this year. In the first quarter it reported a better-than-expected expansion of 5.3%, although a drawn-out slump in housing continues to weigh on domestic demand.
The Fund expects the momentum to continue, raising its gross domestic product forecast for next year to 4.5% from 4.1%, according to a press release published Wednesday. China is targeting growth of around 5% this year. In the first quarter it reported a better-than-expected expansion of 5.3%, although a drawn-out slump in housing continues to weigh on domestic demand.
“We certainly are seeing that consumption is recovering but it has some ways to go,” the Fund’s First Deputy Managing Director Gita Gopinath said in an interview with Bloomberg News earlier this week. “The strength we’re seeing in public investment remains. Private investment is still weak, mainly because of the weakness in the property sector.”
The IMF has called on Beijing to provide more monetary and fiscal support for the economy, including further steps to resolve the housing crisis, which has persisted despite repeated efforts by authorities to put a floor under prices and boost demand.
In the IMF’s Wednesday statement, Gopinath said the priority should be to “mobilize central government resources to protect buyers of pre-sold unfinished homes and accelerate the completion of unfinished pre-sold housing, paving the way for resolving insolvent developers.”
Earlier this month Chinese officials announced a new effort to shore up real estate markets, easing down-payment requirements for buyers and providiing 300 billion ($42 billion) of central bank funding to help local governments purchase excess inventory from developers.
Gopinath said more is needed. “Fiscal policy should prioritize providing one-off central government financial support for the real estate sector,” she said in the statement, while low inflation means there’s also room for further monetary easing.
BTC price action shows sensitivity to Mt. Gox events, leaving $69,000 unclaimed as new support — to the frustration of Bitcoin bulls.
saw four-day lows into the May 28 Wall Street open after holiday BTC price action deceived bulls.
Bitcoin wobbles on Mt. Gox fund movements
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hovering below $68,000 after spiking to weekly highs.
The trip to $70,600 during the Memorial Day holiday in the United States came without institutional involvement, for example in the form of demand for the spot Bitcoin exchange-traded funds (ETFs).
Despite rapidly gaining momentum, Bitcoin’s latest rally failed to endure for long before the market retraced all of its progress.
The volatility came amid new movement of BTC worth $7 billion from wallets linked to defunct exchange Mt. Gox.
“And there is a full retrace of that recent pump as expected,” popular trader Credible Crypto wrote in part of his ongoing commentary on X (formerly Twitter).
“Let’s see what kind of reaction we get here at the lows.”
The latest data from monitoring resource CoinGlass highlighted liquidity concentrations around spot price, with the area around $67,000 now the nearest point of interest below.
Responding to the past 24 hours’ moves, fellow trader Daan Crypto Trades revealed a positive impact on market structure — a removal of leverage.
“All positions entered during yesterday’s move were flushed out and the funding rate is back to neutral,” he wrote on X alongside a chart of open interest data.
“ETH is a bit stronger still but as long as BTC is within its bigger range we’ll keep seeing more of this low timeframe chop.”
BTC price performance thus continued to hinge on overcoming key resistance and flipping it to support.
Bullish BTC price visions unfazed
As Cointelegraph reported, the greatest challenge remains the 2021 all-time highs of $69,000 and the subsequent trip to $73,800 this year.
Zooming out, popular trader Jelle revealed a mere consolidatory structure on monthly timeframes despite the lack of upward momentum since March.
In a further post, he considered a broader BTC price range in place all the way since mid-2017 — when BTC/USD hit historical all-time highs of $20,000 two cycles ago.
“Bitcoin has spent the past 6.5 years inside this rising channel, and I don’t expect that to change anytime soon,” he confirmed.
“If history is any indication, it’s time for another trip towards the highs of the channel. 6-figure Bitcoin is coming.”
A distributed denial-of-service (DDoS) attack attempts to take down a website, computer or online service by flooding it with requests, depleting its capacity and affecting its ability to respond to valid requests.
A DDoS attack involves hackers inserting malware into possibly thousands of internet-enabled devices, collectively referred to as a botnet, and prompting them to deliver a deluge of requests to the target system simultaneously. These compromised machines, individually termed bots or zombies, could be cellphones, desktops, servers or even Internet of Things (IoT) devices. Attackers usually establish direct control over bots by infecting them with malware without the knowledge of the victims.
The influx of incoming traffic overwhelms the target system’s ability to respond to valid requests because the attack consumes too much bandwidth, processing power or memory. In its Q1 2024 DDoS threat report, Cloudflare noted an alarming 50% rise in DDoS attacks in general.
Is a DDoS attack possible on a blockchain network?
Attacking a blockchain network with a DDoS attack is theoretically feasible, though it is more difficult than targeting centralized systems like websites or servers. Blockchain networks are inherently resistant to such attacks thanks to their decentralization.
A blockchain operates as a decentralized distributed ledger, functioning across an array of nodes, which are responsible for validating and processing transactions and creating blocks. Unlike traditional systems, there is no central point of control within a blockchain network. Decentralization makes a blockchain network harder to attack as attackers need to deal with a multitude of nodes.
One way to disrupt the network is by flooding the blockchain with spam transactions, which overwhelms the network and slows down transaction throughput, hindering the timely validation of legitimate transactions. This queues up transactions from genuine users in the mempool, a mechanism in blockchain nodes that stores unconfirmed transactions.
A well-known instance of a DDoS attack was one on the Solana blockchain network, which lead to a 17-hour downtime in September 2021. During Grape Protocol’s initial decentralized exchange offering (IDO) on the Solana-based DEX Raydium, bots bombarded the network with 400,000 transaction loads per second, causing network congestion.
Moreover, DDoS attacks may target decentralized applications (DApps), which are applications built on top of the blockchain, rather than the blockchain network itself. Cryptocurrency exchanges, which play a key role in ensuring liquidity in a blockchain-based ecosystem, frequently fall victim to DDoS attacks, resulting in temporary service outages.
How can DDoS attacks affect blockchain networks?
DDoS attacks can affect blockchain networks via transaction flooding and compromising smart contracts. The objective is to clog the network with fraudulent transactions, slowing it down and, in worse cases, bringing it to a halt.
Transaction flooding
Malicious actors can intentionally overload a blockchain network with a voluminous number of transactions, disrupting its normal operations. The attackers would stir up a volley of transaction requests, usually using automated scripts or specialized software. These transactions resemble legitimate transactions but are designed to squeeze the network.
The attackers broadcast these transactions to the nodes. To achieve consensus, the network propagates the transactions across multiple nodes, which work to process these transactions. However, the sheer volume of incoming transactions overwhelms their processing capacity. The network becomes congested and even genuine transactions get stuck in the backlog. The disruption could affect businesses, exchanges and other services reliant on the blockchain network.
Smart contracts
Hackers can identify vulnerable smart contracts in a blockchain network and flood them with transaction requests. These transactions contain fraudulent instructions or excessive computations to exhaust the functionality of the contract and the underlying network. The execution of code in the smart contract becomes increasingly burdensome, leading to inordinate delays in transaction validation.
As smart contracts are a key part of blockchains, the impact of such an attack may propagate across the network, affecting other smart contracts and transactions, disrupting critical operations and rendering services inaccessible to legitimate users.
Software crashes
Core application software in blockchains has built-in limits regarding the memory allocated and the number of transactions it can process in a block and store in the mempool. When there is a surge in transactions, the software might behave unexpectedly or simply crash.
Moreover, immutability is an inherent characteristic of blockchain transactions, which means they simply cannot be altered once they are recorded in blocks. This mechanism creates a problem when transactions flood the network during an attack. The network gets overloaded with useless transactions, which might be much beyond the software’s ability to handle.
Node failure
Nodes, acting as validators or miners, run the core blockchain software on equipment robust enough to handle the rigorous demand. When malicious actors stream in loads of junk data in a DDoS attack, a node might run out of memory or processing power and crash. A node’s failure due to an attack will increase pressure on the other nodes in the network.
Blockchain networks are essentially an amalgamation of nodes where each receiving node keeps track of the state of the blockchain and broadcasts information regarding transactions to other nodes. Flooding of fraudulent transactions affects the node architecture deleteriously, slowing down the whole network or even pulling it down.
How DDoS attacks affect crypto exchanges
Crypto exchanges are an indispensable part of the blockchain ecosystem, as they make digital assets liquid. They are often the target of the attackers.
When attacking exchanges, the modus operandi of attackers is to exploit vulnerabilities, such as outdated security patches in exchange infrastructure, disrupt operations, extort ransom, or manipulate markets. According to Cloudflare, a major chunk of DDoS attacks on crypto exchanges stemmed from simple service discovery protocol (SSDP) amplification attacks, network time protocol (NTP) amplification attacks and application layer attacks.
An SSDP attack is a reflection-based DDoS attack that exploits universal plug-and-play (UPnP) networking protocols to dispatch a huge amount of traffic to the target system. An NTP attack refers to a technique where the attacker sends a series of small queries that trigger large responses from different bots, multiplying the traffic. An application layer attack refers to an attacker methodology that targets the top layer in the open systems interconnection (OSI) model.
How to prevent DDoS attacks on blockchain networks
To protect blockchain networks from DDoS attacks, security measures are required at the node and network levels. Regular audits take care of vulnerabilities, while redundant infrastructure and stress testing keep the network functioning even during an attack.
Node-level security measures
Nodes should have adequate storage, processing power and network bandwidth to be resilient against DDoS attacks. Strong authentication methods and access controls help to protect network nodes. A completely automated public Turing test to tell computers and humans apart (CAPTCHA) is quite useful in ensuring only legitimate users are able to send transaction requests and prevents bots from infiltrating the network. Load balancing helps in dividing traffic and lessening the effect of node-level attacks.
Network level protection
Putting in place adequate defense mechanisms at the network level is important to safeguard a blockchain network. To identify and reduce the impact of DDoS attacks, firewalls and intrusion detection/prevention systems (IDS/IPS) serve well. Content delivery networks (CDNs) are also helpful in dispersing and absorbing attack traffic.
Audits
To find and fix any vulnerabilities, a thorough audit of various aspects of the blockchain is important. This should include analyzing smart contracts, auditing the integrity of the blockchain’s data structure and validating consensus algorithms. Fault tolerance in consensus mechanisms should be strong enough to resist attacks. Updating the code regularly is important to keep attackers at bay and improve security.
Stress testing
Networks and systems should perform stress tests on blockchain protocols at regular intervals to evaluate their ability to withstand DDoS attacks. This will facilitate the detection of potential vulnerabilities in time, enabling patching of the network infrastructure and upgrading of defense mechanisms.
Redundancy and backup
Blockchain protocols and DApps need to have redundant network infrastructure and backup servers to ensure that the system keeps functioning even when under attack. Nodes located across multiple geographical locations can hold out against a DDoS attack that is limited to a specific region.
Central banks are increasingly adopting generative AI for cybersecurity, with a BIS report indicating that 71% are already using it and more planning to follow.
The Bank for International Settlements (BIS) believes in the potential for widespread adoption of generative artificial intelligence (AI), an area in which many central banks have developed a strong interest.
The BIS, an international financial institution comprising 63 central banks and monetary authorities, surveyed 32 of its central bank members to assess their interest in adopting generative AI tools for cybersecurity. The report found:
“Over two-thirds (71%) of respondents are already using gen AI, and 26% have plans to incorporate such tools into their operations within the next one to two years.”
The BIS predicts all of its members will adopt generative AI to enhance their internal cybersecurity measures. Central banks that have already implemented generative AI have praised its effectiveness in detecting cyber threats compared to traditional tools.
Moreover, generative AI tools have accelerated banks’ response times to cyberattacks and aided in the detection of suspicious trends and anomalies. However, the most common concern for central banks remains the costs associated with implementing generative AI tools.
Additionally, the BIS report highlighted:
“Risks related to social engineering and zero-day attacks as well as unauthorized data disclosure are of highest concern.”
Central banks unanimously believe that generative AI tools can eventually replace cybersecurity staff for conducting routine tasks. BIS anticipates this move to “free up resources” that could be reallocated for other initiatives.
BIS members include the central banks of prominent economies such as Australia, China, France, Belgium, Japan, South Korea, Italy, Switzerland, the United Kingdom, and India, among others.
The BIS recently teamed up with seven central banks to explore asset tokenization within the monetary system alongside private financial institutions.
France, Japan, South Korea, Mexico, Switzerland, the United Kingdom and the United States Federal Reserve Banks are among the participating countries.
Dubbed “Project Agora,” the initiative will build on a unified ledger concept proposed by BIS that bridges tokenized commercial bank deposits and tokenized wholesale central bank money.
Former United States President Donald Trump’s on-chain crypto asset holdings briefly surpassed $10 million on Monday, primarily driven by his largest tokenholding, TRUMP.
On May 27, blockchain intelligence firm Arkham reported that presidential candidate Donald Trump’s crypto asset portfolio topped $10 million.
The surge to a seven-figure portfolio was catalyzed by the MAGA memecoin, TRUMP, which surged to an all-time high of $13.24 on May 27.
According to Arkham, Donald Trump holds 579,290 TRUMP tokens, currency worth around $6.79 million.
The memecoin has surged 53% over the past week following Donald Trump’s crypto endorsements.
“I am very positive and open-minded to cryptocurrency companies, and all things related to this new and burgeoning industry,” he said on May 25.
On May 21, the Trump 2024 campaign launched a fundraising page for people to donate in crypto.
However, TRUMP prices have declined 8.8% since that peak in a fall to $12.04 at the time of writing, according to CoinGecko.
This has caused the entire portfolio to retreat to $9.5 million as crypto markets declined during early trading on May 28.
MAGA was launched in August to donate to U.S. veterans and protect children. While it bears the former president’s name, it is not officially affiliated with or endorsed by Donald Trump.
According to the official website 234.75 ETH has been donated to United States veterans and 204.5 ETH to child trafficking prevention since MAGA launched.
Donald Trump also has a big Ether bag with 464.2 ETH worth around $1.79 million at the time of writing.
He also holds a million MVP tokens worth around $473,000. MVP is another memecoin offering rewards and supporting donations to the Trump election campaign. It hit an all-time high of $0.709 on May 17 but has fallen back 33% since then to trade at $0.477 at the time of writing.
One in three voters in the United States considers a candidate’s position on cryptocurrencies before making their voting decision.
According to a recent online survey conducted by the Harris Poll, 77% of respondents believe that a U.S. presidential candidate should possess at least an “informed perspective” on cryptocurrencies.
The poll, which surveyed likely U.S. voters, was funded by Grayscale, a Bitcoin ETF issuer, and involved over 1,700 participants.
Interestingly, the survey highlighted that voters are equally divided on which political party takes the lead on digital asset issues.
Crypto Finds Increased Political Attention
This recent poll builds upon a previous round of questioning conducted late last year, which indicated that an increasing number of people anticipate cryptocurrency becoming a part of their investment portfolios (47%).
The growing interest in cryptocurrencies could explain the heightened political attention the topic is receiving.
Zach Pandl, Head of Research at Grayscale, said that likely American voters, regardless of their political affiliation, demonstrate a heightened interest in investing in crypto assets and supporting candidates who are well-versed in emerging technologies.
The survey revealed that the majority of respondents (98%) had heard of Bitcoin, indicating its widespread recognition.
Additionally, a significant segment of voters claimed to be familiar with Ethereum’s ether (ETH), with only 46% stating that they had never heard of it.
Moreover, around 17% of voters reported having invested in Bitcoin, placing it on par with bonds as an investment option and surpassing investments in exchange-traded funds (ETFs).
Furthermore, 44% of voters expressed their belief, to varying degrees, that “crypto and blockchain technology are the future of finance,” marking a four-percentage-point increase from responses to the same question asked the previous year.
However, respondents also indicated a desire for government oversight, with 52% stating that they would be more likely to invest in digital assets if the field were subject to more regulations.
Fed Survey Finds 7% of US Adults Using Crypto
The number of United States adults reporting crypto ownership or usage has seen a significant decline, according to the latest annual household survey conducted by the Fed.
The survey, known as the Survey of Household Economics and Decisionmaking (SHED), indicates that approximately 18 million US adults reported using cryptocurrencies in 2023, representing a drop from previous years.
In the 12-month period leading up to October 2023, the survey found that 7% of the surveyed US adults reported using cryptocurrencies, down from 10% in 2022 and 12% in 2021.
These findings from the Federal Reserve survey significantly differ from Coinbase’s claim that 52 million Americans own cryptocurrencies.
Furthermore, another survey conducted by The Harris Poll in December last year revealed that approximately 73% of US voters believe that US presidential candidates should have an informed perspective on innovative technologies like artificial intelligence (AI) and cryptocurrency.
Likewise, a recent report from Coinbase claimed that California voters who own cryptocurrencies are expected to have a significant impact on the 2024 elections.
The White House believes the U.S. Federal Deposit Insurance Corp needs a “fresh start” with a new chair who is not part of the leadership that presided over its long-running cultural problems, a White House official told Reuters on Tuesday.
FDIC Chair Martin Gruenberg finally succumbed on Monday to a months-long scandal over sexual harassment at the agency, announcing that he would step down once the Senate has confirmed a successor, in a move that could kill bank capital hikes and other major Wall Street bank rules sought by Democrats.
Washington insiders and analysts said the White House is under pressure to quickly fill the role and preserve Democratic President Joe Biden’s financial regulation agenda just six months ahead of the U.S. presidential election.
They expect the White House would seek a female nominee already in government who would be better placed to overhaul the agency’s toxic culture and get through the nomination process faster.
“Assuming that the White House were to announce a nominee tomorrow to replace Mr. Gruenberg, the best it could hope for is a vote on the Senate floor in September,” Stifel Chief Washington Policy Strategist Brian Gardner wrote on Tuesday.
The administration is “very conscious” of the tight Senate calendar and wants to put a nominee in front of the Senate Banking Committee as soon as possible, said the official who spoke on the condition of anonymity.
Gruenberg, a Democrat, had clung to his job since the scandal erupted in November, despite many lawmakers demanding he step down. A Monday statement by top Democrat and Senate Banking Chair Sherrod Brown calling for fresh leadership appeared to tip the balance.
A top bank regulator, the FDIC faces a critical moment as regional banks remain under stress following last year’s turmoil, and as it finalizes capital hikes and other major new rules for Wall Street banks.
Under the law, the only way for the administration to replace Gruenberg without handing control of the agency to Republicans is to have the Senate, which Democrats control by one vote, confirm their new pick. But many Washington analysts believe Gruenberg may struggle to hold onto his job much longer, as Republicans continue to pile pressure on Biden to fire him.
A damning independent review this month found widespread misconduct at the FDIC went unaddressed for years, and cited instances in which Gruenberg – who has spent nearly two decades in leadership at the agency – lost his temper with subordinates.
The agency’s deep-seated problems, combined with the uncertainty created by the election, may put off the relatively small pool of viable candidates, said analysts.
“I don’t know who they’re going to find who can get the number of votes quickly and even if they find the perfect person, I wonder if that perfect person would be interested,” said Isaac Boltansky, director of policy research for brokerage BTIG.
POSSIBLE CONTENDERS
Among the candidates who could fit the bill is Christy Goldsmith Romero, a Democratic member of the Commodity Futures Trading Commission (CFTC), said one regulatory and one industry source.
Goldsmith Romero, who declined to comment, is in the process of being re-nominated to the CFTC role, meaning the White House could switch her nomination to FDIC chair quickly, one said.
Treasury Undersecretary for Domestic Finance and former top Federal Reserve official Nellie Liang would also be a strong candidate, having already been Senate confirmed, one of the people said.
While New York State Department of Financial Services Superintendent Adrienne Harris is not Senate-confirmed, she was in contention for Gruenberg’s job back in 2022 and could also be a potentially strong candidate, said two other people.
Spokespeople for Liang and Harris declined or did not respond to a request for comment.
Gruenberg, 71, had been at the FDIC since 2005 and is the longest-serving FDIC board member in the agency’s 89-year history. During that time he served as its chair twice – once under President Barack Obama and the second time under Biden.
While Gruenberg was not found to be directly responsible for the agency’s broad cultural issues, he apologized for misconduct under his leadership and for his own transgressions.
Should he leave the agency without a confirmed replacement, its leadership would fall to Travis Hill, the agency’s vice chair and a Republican who has voted against some of the proposed new rules. The agency would then be deadlocked 2-2.
That could delay indefinitely the Basel capital hikes, and other major draft rules the agency is working on with fellow regulators; those include requirements for some lenders to hold more long-term debt to boost their resilience; restrictions on banker executive pay; and changes to bank merger policies.
White House press secretary Karine Jean-Pierre told reporters on Tuesday that the president “is taking this very seriously.”
U.S. Treasury Secretary Janet Yellen urged German bank executives on Tuesday to step up efforts to comply with sanctions against Russia and shut down efforts to circumvent them to avoid potential penalties themselves that would cut off dollar access.
Yellen said at the start of a meeting with bankers that the Treasury’s new authority to hit banks with secondary sanctions if they aid Russian military-related transactions had helped to frustrate Russia’s efforts to procure goods needed for its war in Ukraine, but more work was needed.
“Russia continues to procure sensitive goods and to expand its ability to domestically manufacture these goods. We must remain vigilant and be more ambitious,” Yellen said.
“I urge all institutions here to take heightened compliance measures and to increase your focus on Russian evasion attempts,” Yellen said in prepared remarks for the meeting in Frankfurt.
In an unusually direct warning, she told the executives to police sanctions compliance among their banks’ foreign branches and subsidiaries and reach out to foreign correspondent banking customers to do the same, especially in high-risk jurisdictions.
“Russia is desperate to obtain critical goods from advanced economies like Germany and the United States,” Yellen said. “We must remain vigilant to prevent the Kremlin’s ability to supply its defense industrial base, and to access our financial systems to do so.”
She later cautioned, however, that the Treasury will be “judicious” in applying any secondary sanction on banks and that the executives she had met on Tuesday had expressed a “very strong commitment” to doing their part.
RAIFFEISEN WARNING
Yellen’s warning comes shortly after the U.S. Treasury successfully pressed Austria’s Raiffeisen Bank, the biggest Western bank in Russia, to ditch a deal involving a Russian tycoon.
Earlier this month, Raiffeisen Bank International (RBI) (RBIV.VI), opens new tab dropped a bid for a 1.5 billion euro ($1.6 billion) industrial stake linked to Russian tycoon Oleg Deripaska after intense U.S. pressure.
The deal’s collapse was a fresh setback for the lender, which faces criticism for its ties to Moscow more than two years since Russia’s invasion of Ukraine. The pressure also underscored Washington’s willingness to take European banks to task over their Russia ties.
Raiffeisen was warned by the U.S. Treasury in writing that its access to the U.S. financial system could be curbed because of its Russia dealings, a person who has seen this correspondence told Reuters.
On May 6, Deputy Treasury Secretary Wally Adeyemo sent a letter to RBI, expressing concern about RBI’s presence in Russia as well as a $1.5 billion deal.
RBI’s announcement followed weeks of pressure over its plan to buy a stake in construction group Strabag, a move designed to unlock bank funds frozen in Russia.
MEANINGFUL CONSTRAINTS
And a senior U.S. Treasury official acknowledged that Western banks face “meaningful constraints” in exiting Russia, but they should not be seeking to expand their Russian businesses as Raiffeisen has.
The official added that Austrian regulators should take a more aggressive posture to avoid reputational risks for a systemic institution.
“The mere fact of the secondary sanctions existing already gets us to our goals in some ways,” the official said on condition of anonymity.
Spokespersons for Germany’s two largest banks, Deutsche Bank and Commerzbank, both said they had significantly reduced their business in Russia and were complying with the sanctions.
Yellen said the most concerning Russian sanctions evasion activity was coming through China, the United Arab Emirates and Turkey. She added that the Treasury “is working to disrupt evasion wherever we see it, from Central Asia to the Caucasus and throughout Europe.”
Yellen, who also gave remarks on the U.S.-European alliance in Frankfurt before attending a meeting of G7 finance ministers in Italy this week, said she sees the global economy outperforming expectations with risks broadly balanced and financial conditions easing since last year’s banking turmoil.
“We also remain vigilant to potential vulnerabilities, including elevated levels of corporate debt, leverage and liquidity mismatches in the non-bank sector, and strains in commercial real estate markets,” Yellen added.
Bitcoin price rallied to the coveted $70,000 mark amid a noticeable surge in spot buying and spot BTC exchange-traded fund (ETF) purchasing, with the cryptocurrency community pondering whether the bull market is just beginning or nearing its peak.
Bitcoin charts and spot ETF activity highlight the trend reversal
Analyst “ELI5 of TLDR” suggested that the majority of on-chain indicators point to a nascent bull market, despite some showing topping patterns. The recent support bounce near $60,000 has sparked increased interest, with Farside Investors reporting approximately $950 million in inflows last week, a figure not seen since March.
Should this trend continue, BTC could potentially exceed expectations. Currently, BTC is trading within a few hundred dollars of $70,000, with the 20-day EMA at $64,371 and a positive RSI indicating that an upward breakout is more likely. Overcoming the $68,000 resistance suggests that BTC price is on the path to $73,777, though this level may trigger a strong bearish response.
Conversely, a break below the moving averages could signal a bearish downturn, with potential drops to $59,600 and $56,552.
Changing U.S. monetary policy buoys Bitcoin price
In the broader economic context, Bitcoin’s 51% year-to-date gain is reflective of investors’ anticipation of U.S. monetary expansion, which saw the M2 monetary base surpass $21.0 trillion in April 2024.
This increase in circulating money hints at rising inflationary pressures despite a period of spending hesitancy by companies and individuals. The United States Federal Reserve’s strategies to manage inflation and avoid a recession could impact the liquidity and, consequently, the attractiveness of scarce assets like Bitcoin.
Exchange reserves hit seven-year low as Bitcoin nears all-time high
Adding to the bullish sentiment, exchange BTC reserves have plummeted to a seven-year low, with CryptoQuant data showing only 1,918,417 BTC available on major trading platforms as of May 19, a significant decrease from the previous year.
This scarcity, coupled with the recent halving event that has halved the potential new supply from miners, makes a bearish stance on Bitcoin increasingly difficult to justify.
Bitcoin has achieved all-time highs against local currencies in several countries across Asia and South America, following a significant 7% surge in its price.
On May 21, Bitcoin reached an intraday and six-week high of $71,650, marking a gain of over 7% within a 24-hour period.
According to CoinGecko, this puts the asset within a 3.4% range of its all-time high in USD terms, recorded on March 14, at $73,738.
Bitcoin Sets New Highs Against Various Fiat Currencies
The surge in Bitcoin’s price has resulted in new record highs against various fiat currencies.
In Japan, BTC hit an all-time high of 11.2 million yen during early trading on May 21.
This marks the first time that the asset has surpassed the 11 million JPY threshold.
The Japanese yen has experienced a weakening trend against the U.S. dollar in recent months, depreciating by 10% since the beginning of the year.
Argentina also witnessed Bitcoin reaching a peak value of 63.8 million Argentine pesos (ARS) on May 21, slightly surpassing the highs seen in mid-March.
The country has been grappling with high inflation, currently standing at a staggering 290%, along with currency devaluation over the past couple of years.
In the Philippines, Bitcoin briefly reached a record high of 4.18 million pesos (PHP) on May 21, surpassing the mid-March highs.
Similar trends were observed in other countries such as Britain, Australia, Canada, Chile, Colombia, Egypt, Norway, India, South Korea, Taiwan, and Turkey, as noted by industry observer Thomas Fahrer on X.
Bitcoin Short Squeeze on the Horizon?
In a recent post on X, crypto analyst Willy Woo highlighted the liquidation of a month’s worth of Bitcoin short positions, suggesting the possibility of a short-squeeze beyond the all-time highs.
Coinglass reported that within the past 24 hours, 79,010 traders were liquidated, with total crypto liquidations amounting to $345 million, of which 78.5% were short positions.
As reported, Markus Thielen, the head of research at 10x Research, previously predicted that a breakthrough above $67,500 could potentially lead to new all-time highs.
Currently, BTC is trading at $70,945, just $2,500 away from reaching a new all-time high in U.S. dollars.
Aside from 10x Research, some other analysts have also turned bullish on Bitcoin following weeks-long consolidation.
Leading trading firm QCP Capital has expressed optimism about Bitcoin’s price momentum, forecasting a potential return to the highs of $74,000.
In a recent note, the firm said it has observed substantial buyers acquiring 100,000 to 120,000 BTC Calls for December 2024, indicating confidence in the upward movement of the cryptocurrency.
“US CPI numbers triggered a break out of the range across risk assets. BTC has since traded back above 66k,” the firm wrote.
Brazil’s central bank unveiled a multi-phase plan to regulate crypto and virtual asset service providers on Monday. It aims to finalize the regulatory proposals by the end of this year.
These regulations will establish rules that verify and enforce greater transparency around the potential benefits and risks of these investments, the bank said. It said it opted for a phased approach to effectively regulate the country’s cryptocurrency service market.
“From this point on, the contributions will be used and the regulatory proposals will be finalized at the end of 2024,” the bank added.
The central bank’s latest decision pushes back the finalization of the process, according to Reuters. It follows a 2022 law that gave the bank the authority to develop these regulations.
During a congressional hearing last year, the central bank’s director of regulation, Otavio Damaso, anticipated completing the crypto regulations by June 2024.
The bank conducted a public consultation on the matter in Dec. 2023, which wrapped up in January. Following this, it announced a new public consultation scheduled for the second half of this year.
The central bank told Reuters that the first consultation aimed to collect feedback from the public on the proposed regulations. It also addressed aspects not covered by the 2022 law, such as how virtual asset service providers should segregate their assets.
To address this, it explained that the first public consultation required “reasonable dedication from the teams involved.”
The bank is also moving forward with regulating stablecoins, particularly those used for payments and foreign exchange.
Brazil Blocks Crypto Donations in Elections
In a move to crack down on cryptocurrencies in campaign finance, Brazilian authorities solidified a ban on crypto donations to political parties and candidates last week.
The electoral court defended its ban, emphasizing the need for transparency and traceability in campaign financing. It stated its commitment to protecting elections “from irregular or illicit practices.”
The Russian crypto mining industry could grow “by between 20% and 40%” in 2024, a new report has claimed.
Per the media outlet Overclockers, the claims came from industry insiders in a report from BitRiver.
The latter is Russia’s biggest crypto mining player. The firm is one of the driving forces behind a recent legislative push that could result in the “legalization” of the sector.
Russian Crypto Mining Industry ‘Continues to Grow’
In the report, analysts claimed that the “low cost of electricity” and “the absence of strict regulation by the authorities” were resulting in “good growth dynamics” for crypto miners.
The report’s authors quoted the director of the Industrial Mining Association, Sergei Bezdelov, as stating that the industrial crypto mining market “doubled in size” in 2023.
BitRiver claims that last year domestic Bitcoin miners accrued a combined total of about BTC 54,000.
The firm said that Russia “continues” to be one of the world’s biggest crypto mining powers.
BitRiver also claimed that “over 95%” of Russian miners’ “computing resources” are being used to mine BTC.
However, not all experts agree on this statistic. The Co-founder of the Encry Foundation, Roman Nekrasov, said he believed BTC accounted for 90% of Russian mining efforts.
He said 10% of Russian miners focus on altcoins like Litecoin (LTC) and Kaspa (KAS).
Market Still Largely Unregulated
At present, mining has no legal status in Russia. However, many in Moscow have proposed banning crypto in various forms.
Miners want lawmakers to “hurry up and legalize” their sector, even if that means paying taxes on their earnings.
The Energy Ministry has suggested easing the load on overworked grids by forcing miners to turn off their rigs for a fixed amount of time every year.
The latest legislative proposals reportedly either suggest restricting private mining or allowing energy providers to fine suspected “home” crypto miners.
Low Power Costs Spark More Growth Potential
Legal experts weighed in. They told the report’s authors that legal provisions for crypto and crypto mining already exist in Russia.
Elizaveta Vikhlyantseva, a lawyer at the law firm Vegas Lex, noted that there was nothing in Russian law that “prohibited” the construction of “crypto mining farms.”
Meanwhile, Yaroslav Shitsla, the head of the IT and IP dispute resolution department at the law firm Rustam Kurmaev and Partners, said that “cryptocurrency has already been recognized as property.”
Shitsla pointed to the law “On Digital Financial Assets” as evidence for this claim. And while this may be true, critics have called this law “lacking in substance.”
The Financial Action Task Force (FATF) appears to agree. It has downgraded Russia’s compliance rating accordingly.
Regardless, experts struck an upbeat note. Nikita Vassev, the founder of Terracrypto, claimed that the rapid growth of mining in Russia was due to the low cost of electricity.
Vassev added that Russia’s “climatic conditions” were also favorable for miners.
The expert notes that “the majority of miners choose to operate in Siberia because of the opportunity to save on cooling costs.”
Experts added that there were “many production sites” in the country that could “easily be repurposed for Bitcoin mining.”
Most agreed that the “lack of strict control by local regulators” creates “positive conditions for cryptocurrency-related business.”
The American Bankers Association (ABA) on Monday urged House leaders to back a bill that would stop the Federal Reserve from creating a CBDC for individuals and using it for monetary policy tools.
Congressman Tom Emmer (R-Minn.) introduced the CBDC Anti-Surveillance State Act (H.R. 5403) in Sept. 2023. The bill, which has gained support from 165 cosponsors, is expected to be voted on this week.
“ABA believes strongly that a CBDC, defined as a digital form of central bank money that is widely available to the general public, is unnecessary in the United States and would present unacceptable risks and costs to the financial system,” the association said in the letter to Speaker Mike Johnson and Minority Leader Hakeem Jeffries.
“The dollar is already digital today, and it is unclear how issuing a CBDC would improve financial inclusion or achieve other laudable goals,” it added.
Fed Studying CBDC Despite Reservations from Top Officials
The ABA’s letter also warned that a CBDC would disrupt the current financial system in several ways. It could fundamentally alter the relationship between citizens and the Federal Reserve, weaken the role of banks, worsen economic downturns, and make it harder for the Fed to manage the economy effectively, the letter said.
While the US hasn’t launched a CBDC yet, the government has shown interest in digital currency. The New York Fed’s 12-week pilot program testing a simulated digital dollar is just one example of these ongoing initiatives.
Fed officials, including Chair Jerome Powell and Governor Michelle Bowman, might be hesitant about a digital dollar. But that hasn’t stopped the Fed from actively researching its potential.
ABA Warns of Crippling Impact on Banks
Further, the Fed launching the FedNow Service for instant payments in October has some experts on edge. They worry it could be the building block for a future CBDC.
According to the ABA, a CBDC would do more harm than good. The association fears it would siphon money away from banks and into the Fed, crippling banks’ ability to lend and hindering economic growth across the country. In simpler terms, the ABA sees a CBDC as a powerful competitor that could steal deposits from banks, making it harder for them to provide loans that fuel local economies.
SAUDI Arabia wants to avoid sending the economy into overdrive as it channels investments with the goal of pivoting the nation away from oil dependency.
Finance Minister Mohammed Al-Jadaan said on Tuesday (May 14) that while his country’s massive investments are helping to grow the non-oil economy, the kingdom needs to be careful about “overheating” – which could cause inflation to quicken – and “leakages”.
“If you don’t allow your economy to catch up with your projects, basically what will happen is you will import a lot more,” Al-Jadaan said at the Qatar Economic Forum. As a result, Saudi Arabia could lack the factories and other capacity needed to support its plans, according to Al-Jadaan.
“So giving it more time is actually wise,” he said.
The economic makeover, known as Vision 2030, has been hitting some snags eight years after being unveiled by Crown Prince Mohammed bin Salman. Al-Jadaan has previously acknowledged that there may be delays or acceleration for some projects.
Under the crown prince’s blueprint, Saudi Arabia is pumping hundreds of billions of US dollars into everything from electric vehicles to semiconductors and sports.
“It’s not actually the funding that is the constraint,” the finance minister said on Tuesday. “It’s actually the economic leakage.”
Faster price growth and overheating of the US$1.1 trillion economy would likely result from spending “under the current circumstances of serious inflation pressures around the world and serious increases in the cost of funding”, Al-Jadaan said.
The kingdom’s budget has swung into deficit after its first surplus in years, mainly due to lower energy prices and production and its spending commitments. It now forecasts fiscal shortfalls until 2026.
But Al-Jadaan said he was confident the kingdom will deliver on the plans despite the hefty price tag, as it derives more income from non-oil sources and takes a cautious approach in assuming how much it might earn from crude.
“We are very conservative in our projections and therefore our plans on how the oil revenue will cover that expenditure,” he said.
The government of the State of Qatar is the underwriter of the Qatar Economic Forum, Powered by Bloomberg.
The boss of the euro zone’s most valuable lender BNP Paribas (BNPP.PA), opens new tab on Tuesday played down expectations for a revival of M&A activity in European banking, saying the economics of cross-border and even some domestic deals rarely made sense.
Jean-Laurent Bonnafe’s comments to BNP’s annual shareholder meeting comes after Spain’s BBVA (BBVA.MC), opens new tab last week launched a hostile 12.2 billion euro ($13.20 billion) takeover bid for domestic peer Sabadell (SABE.MC), opens new tab, and after French President Emmanuel Macron said on Monday that Europe needed more banking consolidation.
“If you’re not a domestic player, you can’t buy a player like Sabadell… There’s no way that a non-Spanish bank could position itself as a white knight in a situation like this,” Bonnafe said in response to a question about whether BNP would consider buying Sabadell.
Cross-border banking deals in Europe are rare. Hurdles include differing regulations and labour laws, the lack of a euro zone-wide deposit insurance scheme and politics.
“When you acquire a Texas bank and you’re a Californian bank, if you have 100 cost synergies, and you do the same thing in Europe between two different countries, it’s not 100 cost synergies that you’re going to have, it’s 33,” Bonnafe said.
Euro zone regulators have long wanted more consolidation to boost financial stability and lenders, many of which have smaller market values than they did during the global financial crisis.
Macron, when asked on Monday by Bloomberg TV if he would be willing to countenance the sale of France’s Societe Generale (SOGN.PA), opens new tab to Spain’s Santander (SAN.MC), opens new tab, said: “Dealing as Europeans means you need consolidation as Europeans.”
Bonnafe said even domestic banking deals are tough to make work.
“You have to pay more than the price of the target; you have to buy it at a premium and when you’re bigger, supervision means you need even more,” he said.
Sergio Ermotti, CEO of Swiss bank UBS (UBSG.S), opens new tab – which last year rescued rival Credit Suisse in the biggest banking deal since the global financial crisis – told a Reuters Newsmaker event this week that he wanted to see more deals but was not optimistic.
“It’s going to be very hard to achieve a European consolidation without banking union and a proper framework, but domestic consolidation is still possible within Europe,” Ermotti said. “There has to be a way over time to develop something that is not triggered by a crisis.”
ChatGPT creator OpenAI has announced its latest AI model, GPT-4o, a chattier, more humanlike AI chatbot, which can interpret a user’s audio and video and respond in real time.
A series of demos released by the firm shows GPT-4 Omni helping potential users with things like interview preparation — by making sure they look presentable for the interview — as well as calling a customer service agent to get a replacement iPhone.
Other demos show it can share dad jokes, translate a bilingual conversation in real time, be the judge of a rock-paper-scissors match between two users, and respond with sarcasm when asked. One demo even shows how ChatGPT reacts to being introduced to the user’s puppy for the first time.
“Well hello, Bowser! Aren’t you just the most adorable little thing?” the chatbot exclaimed.
“It feels like AI from the movies; and it’s still a bit surprising to me that it’s real,” said the firm’s CEO, Sam Altman, in a May 13 blog post.
“Getting to human-level response times and expressiveness turns out to be a big change.”
A text and image-only input version was launched on May 13, with the full version set to roll out in the coming weeks, OpenAI said in a recent X post.
GPT-4o will be available to both paid and free ChatGPT users and will be accessible from ChatGPT’s API.
OpenAI said the “o” in GPT-4o stands for “omni” — which seeks to mark a step toward more natural human-computer interactions.
GPT-4o’s ability to process any input of text, audio and image at the same time is a considerable advancement compared with OpenAI’s earlier AI tools, such as ChatGPT-4, which often “loses a lot of information” when forced to multi-task.
OpenAI said “GPT-4o is especially better at vision and audio understanding compared to existing models,” which even includes picking up on a user’s emotions and breathing patterns.
It is also “much faster” and “50% cheaper” than GPT-4 Turbo in OpenAI’s API.
The new AI tool can respond to audio inputs in as little as 2.3 seconds, with an average time of 3.2 seconds, OpenAI claims, which it says is similar to human response times in an ordinary conversation.
Coinbase, the world’s second-largest exchange by trading volume, suffered a major outage on May 14.
Coinbase announced a system-wide outage lasting three hours at 4:19 am UTC. The exchange eventually managed to fully recover by 7:34 am UTC, according to its status page.
While the exact reason behind the outage remains unknown, Coinbase said it will continue investigating the issue.
Coinbase is the world’s second-largest exchange, with a $2.4 billion 24-hour trading volume, compared to the market leader, Binance’s over $18.7 billion trading volume, according to CoinMarketCap data.
Withdrawals and transfers are still offline for some users
Despite announcing that Coinbase systems are fully operational, some users continue facing technical difficulties.
In response to Coinbase’s announcement, pseudonymous X user Rocket commented:
“This tweet is false as millions of people are still unable to withdraw or transfer their assets.”
Numerous other users have also reported that crypto transfers and cash withdrawals remain offline, with some users calling for X’s Community Notes to fact-check Coinbase’s post about its systems being “fully recovered.”
Coinbase’s status page has also noted that it has been facing “degraded transactions” on May 14 but said that the incident has been resolved as of 4:19 am UTC, along with the system-wide outage.
Centralized cryptocurrency exchanges like Coinbase and Binance are usually the first point of contact for mainstream users buying their first digital assets, due to offering a simple user experience compared to decentralized exchanges (DEXs).
Hence, system outages and withdrawal issues on centralized exchanges can be particularly damaging to the mainstream’s trust in the crypto industry.
DEX trading volumes are significantly lower compared to centralized exchanges. On Monday, DEXs amassed over $585 million in global trading volume, which is only a fraction of the $4.6 billion trading volume amassed by centralized exchanges, according to Kaiko Research.
Deutsche Bank, a German multinational investment bank, is collaborating with Singapore’s central bank on asset tokenization.
Deutsche Bank has joined the Monetary Authority of Singapore’s (MAS) Project Guardian, which focuses on asset tokenization in wholesale funding markets and decentralized finance (DeFi) applications.
As part of the collaboration, Deutsche Bank will test an open architecture and interoperable blockchain platform to service tokenized and digital funds. The bank will also propose protocol standards and identify the best approach to contribute to industry progress.
Deutsche’s Asia Pacific head of securities and technology, Boon-Hiong Chan, will be the bank’s lead for Project Guardian. The bank is expected to work closely with Memento Blockchain, a software-based platform targeting DeFi and digital asset management.
Deutsche and Memento Blockchain previously worked together in 2022 and 2023, successfully completing a proof-of-concept known as Project DAMA, which refers to Digital Assets Management Access.
The initiative aims to unlock the potential for a more efficient, secure and flexible solution for digital fund management and investment servicing.
The new Deutsche Bank’s efforts aim to introduce DAMA 2. The development will involve Interop Labs, the initial developer of the major interoperable blockchain, the Axelar network.
Some major cryptocurrency firms, including Ripple, have been working with the Axelar Foundation to add interoperability to their blockchain networks.
Ripple announced a collaboration with Axelar in February 2024, ultimately planning to tokenize real-world assets (RWA) of the XRP Ledger, made interoperable through Axelar.
“It’s now clear that secure blockchain interoperability is required to unlock the trillion-dollar potential in asset tokenization,” Axelar co-founder and Interop Labs CEO Sergey Gorbunov told Cointelegraph.
“Deutsche Bank and Project Guardian are leading innovation toward establishing the open systems that will enable this technology. Axelar is critical infrastructure for institutional adoption, and we’re excited about this collaboration,” he noted.
Initiated by Singapore’s MAS and launched in 2022, Project Guardian is a collaborative initiative between the MAS and other financial market players, including the United Kingdom’s Financial Conduct Authority, Switzerland’s Financial Market Supervisory Authority and Japan’s Financial Services Agency.
Deutsche’s entrance to Singapore’s tokenization project comes a few days after the bank issued a report on stablecoins, raising questions about the transparency of major issuers like Tether.
Tether subsequently slammed Deutsche Bank over its claims, emphasizing that the report failed to provide substantial evidence or concrete data to support the claims.
Tether’s USDT stablecoin has established a major component of the cryptocurrency market, accounting for its biggest share in terms of trades. It’s also the world’s largest stablecoin with a total market value of nearly $111 billion.
Hayden Adams, the founder and CEO of decentralized exchange Uniswap, called on United States President Joe Biden to consider how voters think about crypto when they enter ballot boxes in November.
In a May 12 X post, Adams claimed there was “not much time” for President Biden to change the perception many crypto-focused voters had of his administration’s policies on digital assets. According to the Uniswap CEO, the U.S. President was making a “miscalculation” of assuming crypto would be irrelevant in the 2024 elections and allowing Senator Elizabeth Warren and the U.S. Securities and Exchange Commission (SEC) to “wage total war” on the technology.
“Republicans smell blood in the water and are turning hard towards crypto,” said Adams. “Not much time for Biden to save it. Anyone close to him or [Democratic] leadership should be expressing how serious this is and pushing for immediate reversal on his approach to crypto (public support/plan and reigning in sec + warren).”
In November, U.S. voters will choose whether to elect President Biden to a second term. Since taking office in 2021, he signed one of the first executive orders to establish a regulatory framework for digital assets and nominated Gary Gensler as the SEC Chair.
Under Gensler, the SEC has ramped up enforcement actions against crypto firms offering services or products to U.S. residents, resulting in many criticizing the commission for a seemingly inconsistent approach to digital assets. The regulator has civil cases pending against Kraken, Coinbase, Ripple and Binance.
On May 8, a majority of members of the U.S. House of Representatives voted in favor of a resolution that would overturn an SEC rule placing restrictions on banks holding customers’ crypto. Before the vote, President Biden said he intended to veto the resolution, letting the SEC’s Special Accounting Bulletin 121 stay in place.
With fewer than six months until U.S. Election Day, many in and out of the crypto space have called out the Biden administration for its policies on digital assets — some as a warning like Adams, others as a criticism. Members of Congress are also moving forward with legislation to clarify the roles the SEC and Commodity Futures Trading Commission (CFTC) would play in regulating crypto.
Adopting a potential digital euro won’t displace the Swedish krona, Sweden’s central bank said.
In a staff memo published Tuesday, the Sveriges Riksbank indicated it sees potential benefits for Sweden in the digital euro. It highlighted the possibility of a more robust and competitive payment system.
The bank added that there may be a small shift away from traditional bank deposits. However, the Riksbank believes any impact will be limited due to the proposed cap on individual holdings of digital euros.
Using the digital euro might extend beyond the eurozone. While it’s designed for eurozone countries, a proposal allows non-eurozone members to potentially join the system through agreements with the European Central Bank (ECB). This could give residents and businesses in those countries access to the digital euro on equal footing with those in the eurozone.
Sweden’s central bank downplayed the impact of a potential agreement, arguing that institutional factors won’t “crowd out” the krona. Firstly, payments involving the government are conducted in Swedish kronor, solidifying its position as the primary currency, it said.
“For instance, given we pay our taxes in Swedish kronor, we also prefer to receive our salary in Swedish kronor,” the Riksbank said. “And when businesses pay salaries, their main expenditures, in Swedish kronor, they prefer to charge customers in Swedish kronor.”
Also, Swedes can use digital euros even if they haven’t visited or lived in the eurozone before. Meanwhile, businesses in Sweden can accept digital euro payments, but they must transfer them directly to a bank account, just like businesses in the eurozone.
EU Moves Forward with Digital Euro Exploration
The European Central Bank (ECB) launched a two-year planning stage for the digital euro project late last year. Its goals for this period include finalizing the rules, choosing private sector partners, and running tests and experiments.
According to the EU’s draft proposal, which might be revised before release, advantages with a digital euro are significant. Meanwhile, the potential downsides tied to not having one could be substantial.
The draft rules give the ECB the authority to restrict how much money individuals can hold in digital form. A possible limit of between 3,000 to 4,000 euros is being discussed.
Swedish e-Krona Hinges on Digital Euro
A potential downside of the digital euro is that it could threaten the Swedish krona’s stability. High inflation can lead to price swings. If this becomes a problem in Sweden, businesses might switch to pricing things in euros. People might also choose to hold more of their money in euros (seen as a more stable currency) instead of krona. This “flight to quality” could weaken the krona.
Further, the decision to launch a digital Swedish krona, or e-krona, hinges on the development of the digital euro. An e-krona would bolster the Swedish krona’s position within Sweden if the digital euro becomes widely used, according to the bank.
Additionally, leveraging the technology and regulations built for the digital euro could significantly reduce the cost and complexity of launching an e-krona. Finally, the coexistence of both digital currencies could lead to smoother cross-border payments, it said.
The head of Saudi Arabia’s new investment fund for semiconductor and artificial intelligence technology said the country would divest from China if it were asked to do so by the US.
“So far the requests have been to keep manufacturing and supply chains completely separate, but if the partnerships with China would become a problem for the US, we will divest,” said Amit Midha, the chief executive officer of Alat, an investment firm backed by $100 billion in capital from the Public Investment Fund.
US officials have told their Saudi Arabian counterparts that they need to choose between Chinese and American technology as they aim to build out the Saudi Arabian semiconductor industry, Bloomberg has reported, as part of ongoing talks on a range of national security issues.
Read More: US and Saudis Near Defense Pact Meant to Reshape Middle East
“We are seeking trusted, secure partnerships in the US,” Midha said in an interview with Bloomberg News on the sidelines of the Milken Institute Global Conference in California. “The US is the number one partner for us and the number one market for AI, chips and semiconductor industry.”
Saudi Arabia is vying for regional leadership in advanced technology, with the hopes of creating data centers, AI companies and semiconductor manufacturing. Its ambitions come as the US increasingly scrutinizes the Middle East’s ties to China, over worries that countries like Saudi Arabia and the United Arab Emirates could serve as conduits for Beijing to access technology that Chinese firms are blocked from buying from the US.
The US has already asked Abu Dhabi-based AI firm G42 to divest from Chinese technology, in exchange for continued access to US systems that power AI applications. That agreement paved the way for a $1.5 billion Microsoft Corp. investment in G42.
Alat, meanwhile, will announce partnerships with two US tech companies by the end of June, and will co-invest alongside a US investment firm, Midha said. He declined to comment on which firms are involved in those talks or whether they are focused on AI, chips or a combination of the two.
