This week, the United States passed the cryptocurrency regulatory reform bill, indicating a policy shift. China expanded the pilot of the digital yuan in Hong Kong, while the US opposes CBDC. According to the deposit repledge platform, Swell and Bedrock tokens have the highest proportion. MetaMask plans to add support for Bitcoin, and Phantom wallet beats PayPal. The Trump campaign team accepts cryptocurrency donations, and Hong Kong may allow Ethereum spot ETF pledging. ZkSync plans to generate tokens and conduct airdrops this week. Uniswap Labs responds to the SEC’s lawsuit, calling it “weak and incorrect.” Yuga Labs abandons CryptoPunks due to opposition. The London Stock Exchange will list cryptocurrency ETP for the first time.The small cracks between the Warren faction and the White House, Senate leadership, and one-third of the Democratic caucus in the House of Representatives have grown into a larger wedge. This is a significant political shift. Whether it will lead to a real policy shift for the current Democratic administration or any future single-party government remains to be seen. – Alex Sohn
China Expands Digital RMB Payment System to Hong Kong
On Friday, May 17th, the Hong Kong Monetary Authority (HKMA) and the People’s Bank of China (PBoC) announced the expansion of the digital RMB pilot program to Hong Kong, facilitating the setting up and use of digital RMB wallets for Hong Kong residents. The digital RMB, also known as the digital currency of the central bank (CBDC) issued by the Chinese government, has been piloted in mainland China as early as 2019. It is the largest and most advanced CBDC pilot in the world. According to an article by the Atlantic Council in 2023, there are 13.61 billion RMB in circulation on the digital RMB network, with 260 million wallets.
This marks the first time the digital RMB is being piloted outside of mainland China. Eddie Yue, the Chief Executive of the HKMA, stated, “We are delighted that Hong Kong, as the first place to conduct cross-border digital RMB pilot, has become the first place outside of the mainland to allow residents to set up digital RMB wallets locally. By expanding the digital RMB pilot in Hong Kong and leveraging the advantages of ‘Faster Payment System’ 24×7 all-weather service and real-time transfer, users can top up their digital RMB wallets anytime, anywhere without the need to open a mainland bank account, making it convenient for Hong Kong residents to make payments to mainland merchants. We will continue to work closely with the People’s Bank of China to gradually expand the application of digital RMB, enrich the functions of digital RMB wallets available to Hong Kong residents, and intensify efforts to promote more retail merchants in both places to accept digital RMB.”
Earlier this year, the Hong Kong Monetary Authority announced that they are progressing with the testing of their own CBDC, known as e-HKD. It is worth noting that unlike other CBDCs being experimented by governments worldwide, the digital RMB does not utilize blockchain or distributed ledger technology. However, while the Chinese government is advancing the digital RMB, they are also committed to the Blockchain Service Network (BSN). BSN is a universal blockchain similar to Ethereum, where companies and software developers can build blockchain-based applications. In December 2023, the Chinese Ministry of Public Security announced that they would launch a decentralized identity service called RealDID on the BSN.
On Thursday, May 23rd, the Republican-led House of Representatives passed a bill to prevent the Federal Reserve from issuing a CBDC to individuals. The bill, introduced by Majority Whip Tom Emmer, a Republican representative from Minnesota, in September 2023, stated, “Unless designed to be open, permissionless, and private – mimicking cash – a government-issued CBDC is nothing more than a CCP-style surveillance tool that will be used to undermine the American way of life.”
Our Take:
The United States and China continue to take drastically different approaches to digitizing their respective currencies. China recognizes the clear advantages of the digital RMB, such as simplifying cross-border payments, expanding the public use of RMB, and the advantages of 24×7 operation and real-time transfers, and is doubling down on advancing the digital RMB system by expanding it to the first region outside of mainland China. As an international gateway to mainland China, Hong Kong is a significant global financial center, and the digital RMB system will be introduced to a global audience here for the first time.
Meanwhile, the Federal Reserve’s stance on CBDCs appears to have not significantly changed since their research on CBDCs in 2022, as covered in a previous Galaxy Research newsletter. At the same time, U.S. lawmakers, primarily Republicans, are doubling down on their opposition to CBDCs, recently passing legislation called the “CBDC Anti-Surveillance Act” that limits the Federal Reserve from even attempting to develop anything resembling the Chinese digital RMB in an effort to protect civil liberties and freedoms. Instead, U.S. lawmakers may push for legislation to establish a comprehensive regulatory framework for stablecoins issued by private companies. Last month, Senators Cynthia Lummis of the Senate Banking Committee and Kirsten Gillibrand of the Senate Agriculture Committee introduced the “Lummis-Gillibrand Payment Stablecoin Act,” as covered in a previous Galaxy Research newsletter.
Assuming that the U.S. and China continue to pursue different policies regarding the use of CBDCs and other digital currencies, China is likely to lead the innovation of CBDC infrastructure, while the U.S. leads the adoption of privately issued, dollar-denominated stablecoins. As former CFTC Chairman J. Christopher Giancarlo said in an interview with CoinDesk, CBDCs may increasingly be used as a means of governance by countries that are subject to U.S. sanctions and seek to avoid them in the future. If the U.S. does not export its CBDC network, it may have to maintain the core status of the U.S. dollar in the global financial system and compete in the new digital era by involving private, U.S.-based stablecoin issuers, which indeed has the advantage of protecting Americans’ financial privacy but also has the disadvantage of lower capital efficiency. For more information on the pros and cons of stablecoins, please read the Galaxy Research report on digital dollars. – Christine Kim
Chart of the Week
Last week, we focused on the total value of all assets deposited into the EigenLayer and Karak staking platforms. This week, we narrow the scope to a subset of assets deposited into Karak, specifically the Liquid Re-staking Tokens (LRT).
LRTs are tokenized claims on assets deposited into EigenLayer. Essentially, re-staking these LRTs on Karak is equivalent to using EigenLayer deposits to secure Karak’s Active Validation Services (AVS). This concept is similar to the dynamics of Beacon Chain deposits, where Liquid Staking Tokens (LST) are deposited on re-staking applications to secure AVS. This trend is incentivized by loyalty programs that allow users to accumulate and increase loyalty points from various sources.
The chart below shows the trend of top-tier LRTs deposited on Karak. As of May 23, 2024, there are 66,500 of such LRTs deposited on the re-staking application. Magpie LRTs are not included in the chart.
To build upon these deposits, we can compare them to the total supply of the corresponding LRTs. The chart below tracks the supply share of each LRT deposited on Karak. Among the observed LRTs, Swell’s re-staked ETH, rswETH, has the largest deposit share on Karak, at 10.63%. Users depositing rswETH on Karak can earn loyalty points from the re-staking application itself, in addition to a triple multiplier on Swell points. Bedrock’s uniETH has the second-highest share at 6.5%, with depositors earning a 1.5x multiplier on Karak points and a 5x multiplier on Bedrock points. The remaining LRTs have smaller supply shares on the re-staking application, each at 2% or less, but still enjoy a double multiplier on loyalty points.
Other News
MetaMask plans to add Bitcoin support
Phantom Wallet overtakes PayPal, becomes the second-largest app on Google Play Store
Trump campaign accepts cryptocurrency donations, including Dogecoin and Shiba Inu
Hong Kong may allow Ethereum spot ETFs for pledging
ZkSync plans to mint tokens this week, with an airdrop in mid-June
Uniswap Labs responds to Wells Notice, calling SEC’s legal action “weak and incorrect”
Yuga Labs “will no longer engage” with CryptoPunks due to strong opposition to a new series
Republican-led House of Representatives passes anti-CBDC bill
London Stock Exchange to list its first cryptocurrency ETP
Tags
CBDC
DOGE
ETP
SEC
Ethereum
Bitcoin
Source link:
https://news.marsbit.cc/20240527152900877612.html
Note: The views expressed in the above article are solely those of the author and do not constitute investment advice.
Original article link: https://www.bitpush.news/articles/6802729
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