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 concentrate on researching distributed ledger technology, artificial intelligence, liquidity, and securities trading. The QCB began studying 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 assessing the advantages and disadvantages of issuing a CBDC. A day before announcing the CBDC project, the QCB launched a new fintech sandbox, providing a fast testing and evaluation process. The project is part of the national development strategy.
Data: Nearly 500,000 Tokens Created on Solana Blockchain in May
In May, nearly 500,000 tokens were launched on the Solana blockchain due to the low entry barrier and the increased demand for creating popular memecoins. 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 Performance
As of the time of writing, according to Coingecko data:
BTC recent trading price is $68,797.32, with a daily change of +1.6%;
ETH recent trading price is $3,766.02, with a daily change of -0.4%;
BNB recent trading price is $606.75, with a daily change of +3.9%;
SOL recent trading price is $164.78, with a daily change of +1.0%;
DOGE recent trading price is $0.1582, with a daily change of +0.8%;
XPR recent trading price is $0.52, with a daily change of +1.3%.
Policy
Wisconsin State Pension Plan Considering Increased Investment in Bitcoin ETF
David Krause, a finance professor at Marquette University in the United States, stated that the Wisconsin Investment Board (SWIB) purchased shares of BlackRock’s iShares Bitcoin Trust and Grayscale’s Bitcoin Trust worth $164 million in the first quarter. This investment is likely just the beginning, and SWIB is expected to further increase its investment, with other pension plans possibly 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 “trial run” aimed at testing public reaction 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, which holds $2 billion, accounting for 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 $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 an effort 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) on the UK Digital Securities Sandbox recently concluded. The feedback 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 immediate settlement advantages of blockchain, there was little discussion in the documents regarding digital currencies. UK Finance believes that the omission of on-chain digital currencies is a missed opportunity and disadvantages 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 suggested that caps should be set by companies, while the IRSG warned that low caps would hinder the sandbox’s attraction to institutions, especially when testing digital gilts. The IRSG also pointed out that many legal adjustments merely clarify the application of existing laws to digital securities. The GBBC emphasized that the sandbox design favors existing institutions, making it costly for startups to participate. The ICMA and other respondents called for increased flexibility, but this would increase 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, made in 1708 and valued at around $9 million, previously belonged to Empress Catherine of Russia. Galaxy Digital stated, “The tokenization of this instrument, known for its unparalleled craftsmanship and storied provenance, marks a significant step forward 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 financing Galaxy’s global market business.
Marketnode Plans to Launch Blockchain-based Fund Settlement Infrastructure in Late June, Tokenized Credit Products in Q1 2025
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 introduce tokenized credit products (such as bonds and loans) in the first quarter of 2025. Prior to this, Marketnode announced the completion of its Series A funding round led by HSBC, with the funding amount undisclosed.
Cryptocurrency
SBF Returns to Metropolitan Detention Center in Brooklyn, New York
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 facilitate contact with his appellate attorneys, as requested by Judge Lewis Kaplan.
Bankman-Fried was sentenced to 25 years in prison last year for multiple counts of fraud related to the collapse of the cryptocurrency exchange FTX. Another FTX official, Ryan Salame, was sentenced to seven and a half years in prison last week.
Binance CEO: No Delisting of Unauthorized Stablecoins in Spot Trading
Binance CEO Richard Teng clarified in a post on X platform that there will 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 regarding regulated stablecoins will be shared soon.
Bitfarms’ Mining Revenue Drops 45% to $7 Million in May
Mining company Bitfarms reported earnings of 156 BTC (approximately $7 million) in May, a 42% decrease compared to April. The company attributed the decline to it being the first full month of the “post-halving economy.” The total amount of BTC held by Bitfarms 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 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 determine the upgrade of the protocol’s governance structure and fee mechanism to better reward UNI governance token holders. Despite the foundation stating that the decision was “unexpected” and apologizing for it, this is not the first time a vote on implementing “fee switch” has been delayed, transferring a proportionate amount of protocol trading fees to token holders. Nor is it the only instance where the interests of token holders conflict with other “stakeholders” of Uniswap. Cryptocurrency law expert Gabriel Shapiro believes that this is another example of DeFi protocols treating token holders as “second-class” citizens, whose desires are subordinated to a small group of stakeholders.
Key Economic Developments
US Major Stock Indices Close Mixed
The three major US stock indices closed with mixed results, with the Dow Jones Industrial Average down 0.3%, the S&P 500 up 0.11%, and the Nasdaq up 0.56%. Nvidia rose nearly 5%, reaching a new all-time high.
99.9% Probability of No Change in US Fed Rates in June
According to CME’s “Fed Watch,” there is a 99.9% probability of no change in US Federal Reserve rates in June, with a 0.1% probability of a 25 basis point rate hike. The probability of no change in rates by August is 83.4%, with a cumulative 25 basis point rate cut probability of 16.5%.
Goldilocks
What is Liquidity Staking?
Liquidity staking allows stakers to maintain the liquidity of their staked tokens by using alternative tokens and earn additional income through DeFi protocols. Liquidity staking enables cryptocurrency holders to participate in staking without giving up control over their holdings. This changes the way users engage in staking. Projects like Lido have introduced liquidity staking, tokenizing staked assets in the form of tokens and derivatives.
