Headline: Qatar Central Bank Launches CBDC Project
The Qatar Central Bank (QCB) has initiated the first phase of its Central Bank Digital Currency (CBDC) project, focusing on large-value payment settlements between major banks. The project, which will run until October, will focus on researching distributed ledger technology, artificial intelligence, liquidity, and securities trading. The QCB began researching CBDC technology in March 2022 and confirmed the project’s launch in June of the same year. QCB Governor Sheikh Bandar bin Mohamed bin Saoud al-Thani stated that the central bank is evaluating the pros and cons of issuing a CBDC. The day before announcing the CBDC project, the QCB launched a new financial technology sandbox, providing a fast testing and evaluation process. This project is part of the country’s development strategy.
Data: Nearly 500,000 Tokens Created on Solana Blockchain in May
Due to the low entry barriers and the increasing demand for creating popular memecoins, nearly 500,000 tokens were launched on the Solana blockchain in May. According to data from The Block Pro, Solana saw the creation of 455,000 tokens in May, compared to 177,000 tokens on the Ethereum Layer2 Base and 39,000 tokens on the BNB chain. The number of tokens created on the Ethereum mainnet and Layer2 networks Arbitrum and Optimism was less than 20,000.
Market Trends
As of writing, according to Coingecko data:
– BTC recently traded at $68,797.32, with a daily change of +1.6%.
– ETH recently traded at $3,766.02, with a daily change of -0.4%.
– BNB recently traded at $606.75, with a daily change of +3.9%.
– SOL recently traded at $164.78, with a daily change of +1.0%.
– DOGE recently traded at $0.1582, with a daily change of +0.8%.
– XPR recently traded at $0.52, with a daily change of +1.3%.
Policy
Wisconsin Pension Plan May Increase Investment in Spot Bitcoin ETF
David Krause, a finance professor at Marquette University, stated that the Wisconsin Investment Board (SWIB) purchased $164 million worth of shares in BlackRock’s iShares Bitcoin Trust and Grayscale’s Bitcoin Trust in the first quarter. This investment is likely just the beginning, and it is expected that SWIB will further increase its investment, with other pension plans potentially following suit. As of the end of 2023, SWIB manages approximately $156 billion in assets, with Bitcoin ETFs accounting for 0.1% of its investment portfolio. Krause believes that this investment is a “testing of the waters” to gauge public response to Bitcoin ETFs.
In the first three months of this year, nearly 500 institutional investors allocated funds to spot Bitcoin ETFs, with the largest holder being hedge fund Millennium Management, holding $2 billion, which is 3% of its total assets.
Dubai DFSA Reduces Cryptocurrency Recognition Fee to $5,000
The Dubai Financial Services Authority (DFSA) announced adjustments to its cryptocurrency regime, reducing the recognition fee from the previous $10,000 per token to $5,000. The revision aims to enhance the regulatory framework for tokens within the UAE’s special economic zones. The revision also allows domestic investor funds to invest in unrecognized tokens, with exposure limited to 10% of the fund’s total assets. DFSA CEO Ian Johnston stated that this change does not signify a relaxation of regulations but rather aims to better facilitate innovation.
UK Digital Securities Sandbox Feedback Focuses on Caps and Digital Currencies
The joint consultation by the Bank of England and the Financial Conduct Authority (FCA) regarding the UK Digital Securities Sandbox recently concluded. The feedback primarily focused on caps and digital currencies. The sandbox, launched in January of this year, relaxed certain legal requirements for central securities depositories (CSDs) and supported distributed ledger technology (DLT) and tokenization experiments.
Despite the instant settlement advantages of blockchain, there was little discussion in the documents regarding digital currencies. UK Finance believes that not utilizing on-chain digital currencies is a missed opportunity and disadvantageous to non-bank institutions. The Global Blockchain Business Council and the International Regulatory Strategy Group (IRSG) also called for the use of systemic stablecoins.
UK Finance proposed setting caps based on companies, while the IRSG warned that low caps would hinder the sandbox’s attractiveness to institutions, especially when testing digital gilt-edge bonds. The IRSG also noted that many legal adjustments were merely clarifying that existing laws apply to digital securities. The Global Blockchain Business Council emphasized that the sandbox design favors existing institutions, making it costly for startups to participate. The International Capital Market Association (ICMA) and other feedback providers called for increased flexibility, but this would increase the regulatory workload.
Blockchain Applications
Galaxy Digital Tokenizes Violin Worth Approximately $9 Million
Galaxy Digital, owned by Michael Novogratz, announced that it has tokenized a Stradivarius violin owned by Yat Siu, co-founder of Animoca Brands. The violin, crafted in 1708 and valued at approximately $9 million, previously belonged to Empress Elizabeth of Russia. Galaxy Digital stated that the tokenization of this instrument signifies a significant advancement in the application of blockchain technology in unlocking the value of unique real-world assets. The statement also mentioned that Siu is using the tokenized violin as collateral for Galaxy’s global market business financing.
Marketnode Plans to Launch Blockchain-based Fund Settlement Infrastructure in Late June, Tokenized Credit Products in Q1 Next Year
Marketnode, a digital asset company founded by Temasek and the Singapore Exchange (SGX), announced plans to launch a blockchain-based fund settlement infrastructure in late June. It is expected to announce more strategic partners for the network, including financial institutions and infrastructure participants, later in 2024, and launch tokenized credit products (such as bonds and loans) in Q1 2025. Prior to this announcement, Marketnode announced the completion of its Series A funding round, with HSBC leading the investment, although the funding amount was not disclosed.
Cryptocurrency
SBF Returns to Metropolitan Detention Center in Brooklyn
Sam Bankman-Fried, co-founder of FTX, has returned to the Metropolitan Detention Center in Brooklyn, New York, after being transferred to prisons in Oklahoma and Pennsylvania last month. This transfer was made to accommodate his appellate lawyers’ access, in accordance with Judge Lewis Kaplan’s request.
Bankman-Fried was sentenced to 25 years in prison last year for multiple fraud charges related to the collapse of the cryptocurrency exchange FTX. Another FTX official, Ryan Salame, was recently sentenced to seven and a half years in prison.
Binance CEO: No Delisting of Unauthorized Stablecoins in Spot Trading
Binance CEO Richard Teng clarified in a post on X platform that there would be no delisting of unauthorized stablecoins in spot trading. However, there will be restrictions on the use of related stablecoins by users in the European Economic Area for certain products. Updates on regulated stablecoins will be shared soon.
Bitfarms’ Mining Revenue Declines 45% to $7 Million in May
Mining company Bitfarms reported earning 156 BTC (approximately $7 million) in May, a 42% decrease from April. The company attributed the decrease to May being the first full month of the “post-halving economy.” The total amount of BTC held by Bitfarms has increased to 850 BTC, valued at $57.2 million based on the May 31 BTC price of $67,300. Established in 2017, Bitfarms currently operates 12 operational Bitcoin mining facilities in Argentina, Canada, Paraguay, and the United States, with one more under development.
Lawyer: Uniswap’s Voting Delay is Another Example of DeFi Protocols Treating Token Holders as “Second-Class” Citizens
The Uniswap Foundation recently postponed a crucial vote that would decide whether to upgrade the protocol’s governance structure and fee mechanism to better reward UNI governance token holders. Although the foundation stated that this decision was “unexpected” and apologized for it, it is not the first time a vote to implement a “fee switch” to pass on a portion of the protocol’s transaction fees to token holders has been delayed. Nor is it the only instance where the interests of token holders conflict with other “stakeholders” of Uniswap. Cryptocurrency legal expert Gabriel Shapiro believes this is another example of DeFi protocols treating token holders as “second-class” citizens, with their desires subordinated to a small group of stakeholders.
Key Economic Developments
US Stock Indices Close Mixed
US stock indices closed with mixed results, with the Dow Jones Industrial Average falling by 0.3%, the S&P 500 rising by 0.11%, and the Nasdaq Composite rising by 0.56%. NVIDIA saw an increase of nearly 5% and reached a new all-time high.
Probability of No Change in US Interest Rates in June is 99.9%
According to CME’s “FedWatch,” the probability of no change in US interest rates in June is 99.9%, with a 0.1% probability of a 25 basis point increase. The probability of no change in interest rates by August is 83.4%, with a cumulative probability of a 25 basis point cut at 16.5%.
Goldipedia
What is Liquidity Staking?
Liquidity staking allows stakers to maintain the liquidity of their staked tokens by using alternative tokens and earn additional yields through DeFi protocols. Liquidity staking enables cryptocurrency holders to participate in staking without giving up control over their holdings, changing the way users engage in staking. Projects like Lido have introduced liquidity staking, tokenizing staked assets in the form of tokens and derivatives.