6.25 AI Daily Report Crypto Assets Market Heats Up, Regulation and Innovation Go Hand in Hand

1. Headlines

1. Federal Reserve Chairman Powell delivered a significant speech, signaling a pause in interest rate hikes.

Federal Reserve Chairman Powell stated during his testimony in Congress that if inflation and the labor market continue to be weak, the Fed may cut interest rates earlier. This comment is seen as a signal to pause interest rate hikes, triggering significant market volatility.

Powell emphasized that the Federal Reserve will adjust monetary policy in a timely manner based on economic data, and the current stance is to "maintain a moderately restrictive" position. He pointed out that although the inflation rate has decreased, it is still far above the target level of 2%. At the same time, the job market remains tight, and wage increase pressures persist.

Powell's speech has sparked speculation in the market about the Federal Reserve's next move. Analysts believe that Powell's wording indicates that the Fed is seeking the right moment for a policy shift. If economic data in June and July continues to weaken, the Fed may pause interest rate hikes at the September meeting.

On the other hand, Powell also emphasized the importance of cryptocurrency regulation. He stated that while the Federal Reserve does not have the legal authority to purchase Bitcoin, a robust regulatory framework needs to be established to mitigate the risks posed by cryptocurrencies.

Powell's speech has sparked widespread discussion in the market regarding the Federal Reserve's policy outlook. Some analysts believe that if the economy slows further, the Fed may begin a rate-cutting cycle within the year. However, there are also views that inflationary pressures still exist, and the Fed may continue to maintain a hawkish stance.

2. Bank for International Settlements warns: Stablecoins are unlikely to become the core of the monetary system.

The Bank for International Settlements (BIS) warned in its latest annual report that stablecoins are unlikely to become a core part of the monetary system, as they have failed to meet the three key tests of "singularity, resilience, and integrity."

The BIS points out that stablecoins lack singularity because they rely on different issuing institutions and reserve assets. At the same time, stablecoins also lack resilience and cannot respond to economic shocks like sovereign currencies. In addition, the stablecoin ecosystem is also incomplete and cannot provide comprehensive financial services.

The BIS's warning has sparked heated discussions in the industry. Supporters believe that stablecoins can serve as a complement to the traditional financial system, providing financial services to the unbanked population. However, critics are concerned that stablecoins may undermine the status of sovereign currencies and pose risks to financial stability.

Analysts point out that the BIS warning reflects the cautious attitude of regulators towards stablecoins. As the stablecoin ecosystem continues to evolve, the establishment of a regulatory framework will become crucial. Only by establishing a sound regulatory system can stablecoins gain wider recognition and adoption.

In addition, stablecoin issuers also need to improve transparency, strengthen reserve management and risk control to enhance market confidence. Some analysts believe that stablecoins may require further innovation to meet regulatory requirements and user demands.

( 3. Eight major banks in South Korea join forces to issue a won stablecoin, challenging the dominance of the US dollar.

According to reports, eight major banks in South Korea are planning to establish a joint venture to issue a Korean won-based stablecoin to challenge the dominance of the US dollar stablecoin in the digital asset market.

The eight banks include KB Kookmin Bank, Shinhan Bank, and Woori Bank, among others. They will jointly invest to issue a Korean won stablecoin, aiming to strengthen South Korea's influence in the digital asset space.

Analysts believe that this move reflects the South Korean government's and financial institutions' emphasis on the development of digital currencies. The issuance of a Korean won stablecoin can not only meet domestic demand but also help promote the use of the won in international markets.

At the same time, South Korea is also accelerating the construction of a regulatory framework for digital currencies. South Korean financial regulators are formulating relevant regulations to standardize the operations of digital asset exchanges and stablecoin issuers.

However, it is not easy for the Korean won stablecoin to challenge the dominance of the US dollar. Currently, most mainstream stablecoins are based on the US dollar. The international status and liquidity advantage of the dollar allow it to dominate the digital asset market.

Analysts point out that the success of the Korean won stablecoin will depend on multiple factors, including the regulatory environment, user adoption levels, and international cooperation. If it can achieve broad recognition, the Korean won stablecoin is expected to become a regional digital currency option.

) 4. The New York Stock Exchange applies to launch Trump social media Truth Social cryptocurrency ETF

According to reports, the New York Stock Exchange ### NYSE ### has submitted an application to the U.S. Securities and Exchange Commission ( SEC ) to launch Bitcoin and Ethereum ETF products for former President Trump's social media platform Truth Social.

This application is seen as an important step for the New York Stock Exchange's entry into the cryptocurrency market. If approved, Truth Social's cryptocurrency ETF will become the first approved spot cryptocurrency ETF product in the United States.

Analysts believe that the NYSE's launch of cryptocurrency ETF products reflects the growing interest of traditional financial institutions in digital assets. As one of the largest stock exchanges in the world, the NYSE's participation will bring more institutional funds into the cryptocurrency market.

However, the SEC has maintained a cautious stance on the approval of cryptocurrency ETF products. Previously, the SEC has rejected applications for similar products multiple times, citing a lack of adequate regulation and transparency in the cryptocurrency market.

Analysts point out that whether the NYSE's application can be approved will depend on the SEC's assessment of the cryptocurrency market. If the SEC believes that the regulatory framework is sufficiently robust, it is possible that the NYSE's application will be approved.

On the other hand, Truth Social, as the applicant, has also sparked some controversy. Trump has repeatedly criticized cryptocurrencies during his tenure, so the launch of a cryptocurrency ETF product by Truth Social is seen as "self-contradictory."

( 5. The artificial intelligence track has become a new focus of the TOKEN2049 conference, as entrepreneurs seek breakthroughs.

At the TOKEN2049 cryptocurrency conference held in Singapore, the artificial intelligence )AI### track has become a new focal point of attention. More and more entrepreneurs and investors are beginning to pay attention to the combination of AI and cryptocurrency.

During the conference, several AI+crypto start-ups conducted roadshows, attracting the attention of numerous investors. These companies are dedicated to applying AI technology to areas such as cryptocurrency trading, analysis, and risk management.

Analysts believe that AI technology is expected to bring new development opportunities to the cryptocurrency industry. AI can improve trading efficiency, optimize risk management, and provide users with smarter investment advice.

However, the AI + crypto track also faces some challenges. On one hand, the application of AI technology in the cryptocurrency field is still in its early stages and needs further exploration and innovation. On the other hand, the transparency and fairness of AI algorithms are also being questioned.

In addition, the development of AI technology has raised concerns regarding regulation and ethics. Some analysts have called for the establishment of corresponding regulatory frameworks to ensure the responsible use of AI technology in the cryptocurrency sector.

Overall, the TOKEN2049 conference reflects the strong interest of the cryptocurrency industry in AI technology. With the continuous development of AI technology, it is expected to bring new opportunities and challenges to the cryptocurrency industry.

2. Industry News

( 1. Bitcoin price breaks through the $106,000 mark, market sentiment turns optimistic.

The price of Bitcoin has risen by about 0.8% in the past 24 hours, breaking through the $106,000 mark, reaching a high of $106,790. This increase is mainly driven by several factors:

Firstly, the geopolitical situation in the Middle East is easing, with Israel and Iran reaching a ceasefire agreement, leading to a reflow of risk capital into the risk asset market. Secondly, Federal Reserve Chairman Powell made balanced remarks, suggesting that if inflation and employment data continue to weaken, the possibility of an earlier rate cut increases, which provides support for risk assets.

In addition, the demand for Bitcoin from institutional investors continues to rise. The ProCap fund, led by well-known investor Anthony Pompliano, recently spent $386 million to acquire 3,724 Bitcoins, positioning them as a financial reserve asset for the company. This move has attracted market attention and reflects institutional recognition of Bitcoin's long-term value.

Analysts believe that after Bitcoin's price breaks through the $106,000 mark, it may continue to rise in the short term. However, potential pullback risks should also be watched. Investor sentiment has shifted to the greed zone, with the fear and greed index rising to 66. If there is a lack of positive momentum moving forward, the market may see profit-taking.

Overall, the price of Bitcoin is expected to maintain a strong performance in the short term. However, investors need to closely monitor the impact of macroeconomic data, geopolitical situations, and changes in regulatory policies, and prudently manage risks.

) 2. Ethereum price breaks through $2,470, with continued capital inflow into spot ETFs.

The price of Ethereum has increased by about 2% in the past 24 hours, surpassing $2,470. This surge is mainly driven by the continuous inflow of funds into Ethereum spot ETFs.

Data shows that the total net inflow of Ethereum spot ETFs reached $0.73 billion yesterday, with the cumulative net inflow amount surpassing $4 billion, setting a new high since its listing a year ago. This reflects institutional investors' optimistic long-term outlook on Ethereum.

Analysts point out that Ethereum, as a "blue-chip stock" in the cryptocurrency space, tends to perform relatively well during times of market volatility. As the Ethereum ecosystem continues to develop and its application scenarios expand, its long-term investment value is widely recognized.

In addition, Ethereum is about to welcome the major upgrade of "Ethereum 2.0", transitioning from a proof-of-work consensus mechanism to a proof-of-stake, which is expected to significantly improve transaction speed and energy efficiency. This expectation also adds momentum for the rise in Ethereum's price.

However, analysts also remind that the price of Ethereum may experience certain fluctuations in the short term due to the trends of Bitcoin. Investors need to closely monitor the subsequent capital flow situation and carefully manage risks.

3. The performance of altcoins is diverging, and market hotspots are rapidly rotating.

With Bitcoin and Ethereum leading the way, the performance of altcoins has shown divergence. Some popular altcoins like Solana and Cardano rose by 1.5% and 1.2% respectively, while many other coins have experienced declines.

Analysts say that the current altcoin market lacks a strong and sustainable theme, and market hotspots are rapidly rotating. Investor sentiment is easily influenced by short-term market trends, leading to frequent flows of funds between different cryptocurrencies.

From a technical perspective, the price movements of some altcoins are approaching key resistance levels. If they cannot effectively break through, it may trigger profit-taking. Meanwhile, the uncertainty of the macroeconomic and geopolitical situation may also exacerbate volatility in the altcoin market.

Overall, in the absence of a dominant theme of certainty, the altcoin market may maintain high volatility in the short term. Investors need to have an in-depth understanding of the fundamentals and technical aspects of individual coins, and carefully manage risks. At the same time, it is also important to closely monitor the trends of major asset classes and manage risks effectively.

4. Regulatory benefits are frequently appearing, injecting new momentum into the development of the cryptocurrency industry.

Recently, there have been frequent positive developments in the cryptocurrency regulatory field, injecting new momentum into the industry's growth.

First, the U.S. Senate Banking Committee released principles for the structure of the cryptocurrency market, aimed at promoting a fair competitive environment and regulating tokenized security trading, among other things. This marks a gradual improvement of the regulatory framework in the United States.

Secondly, the European Union has completed the revision of the relevant implementing regulations for the MiCA crypto asset market legislation, laying a legal foundation for the regulation of crypto assets.

In addition, Federal Reserve Chairman Powell reiterated that the Federal Reserve does not oppose banks providing services to cryptocurrency companies, as long as they adhere to risk management standards and protect consumers. This clears the way for the banking industry to participate in the cryptocurrency market.

Analysts believe that reasonable regulation will undoubtedly create a favorable environment for the long-term healthy development of the cryptocurrency industry. As regulations become clearer, institutional investors' confidence will further strengthen, propelling the industry's development into a new stage.

However, some analysts have also reminded that the effectiveness and enforcement of regulations still need to be tested over time. Investors need to be patient and pay attention to the specific implementation of regulatory policies.

5. The cryptocurrency derivatives market risk index remains neutral, investor sentiment is cautious.

According to CoinGlass data, the crypto derivatives risk index on June 25 was 59, still within the "neutral volatility" range, reflecting a relatively cautious investor sentiment.

The Crypto Derivatives Risk Index is a composite indicator used to quantify the current level of leverage usage, trading sentiment intensity, and systemic liquidation risk in the market. The index ranges from 0 to 100, with higher values indicating that the market is closer to an overheating or fragile state.

Analysts indicate that the current risk level in the cryptocurrency derivatives market remains neutral, primarily due to the recent stabilization and rebound in the prices of major cryptocurrencies like Bitcoin, which has avoided severe fluctuations. At the same time, investor sentiment is gradually becoming more rational, moving away from extreme greed or panic.

However, some analysts have also reminded that the volatility of the cryptocurrency derivatives market is still higher than that of traditional markets, and investors need to be highly vigilant about risks. It is recommended that investors use leverage wisely, set stop-loss levels, and strictly control risk exposure.

Overall, the current risks in the crypto derivatives market are manageable, but investors should remain cautious, implement risk management, and avoid suffering heavy losses during volatile market conditions.

3. Project News

1. Sui Network: The Rise of the Move Ecosystem Star

Sui Network is a brand new blockchain project developed by a team of engineers who previously worked on Diem. This project is built on the Move programming language and aims to provide high-performance, high-scalability blockchain solutions.

Latest Update: Sui Network has recently completed its token issuance and attracted significant attention after going live on the mainnet. The project employs an innovative parallel execution architecture and dynamic sharding technology, promising to achieve processing capabilities of tens of thousands of transactions per second. Moreover, Sui has introduced a novel object ownership model aimed at simplifying asset management and enhancing security.

Market Impact: As a new star project in the Move ecosystem, the emergence of Sui Network brings new vitality to the entire cryptocurrency field. Its high performance and innovative design are expected to drive the application of blockchain technology across various industries, especially in fields such as gaming, finance, and the Internet of Things. At the same time, the success of Sui will further promote the use of the Move programming language, injecting new momentum into the entire ecosystem.

Industry Feedback: Industry analysts are optimistic about the prospects of Sui Network. Arianna Simpson, a partner at the renowned investment firm Andreessen Horowitz, stated: "The design philosophy of Sui Network is very avant-garde and is expected to become a representative of the next generation blockchain infrastructure." Crypto analyst Lark Davis also believes that Sui's parallel execution architecture and dynamic sharding technology will provide it with significant performance advantages.

2. Aptos: A high-performance blockchain built by former Meta engineers.

Aptos is an emerging blockchain project developed by a team of former Meta engineers. The project aims to build a high-performance, scalable, and secure blockchain infrastructure to provide strong support for Web3 applications.

Latest updates: Aptos recently completed its token issuance and quickly attracted a lot of attention after launching on the mainnet. The project employs an innovative parallel execution engine and smart sharding technology, promising to achieve the processing capacity of tens of thousands of transactions per second. In addition, Aptos has introduced a novel state synchronization mechanism aimed at improving the reliability and consistency of the system.

Market Impact: As a high-performance blockchain built by a team of top engineers, the emergence of Aptos brings new vitality to the entire crypto space. Its innovative design is expected to drive the application of blockchain technology across various industries, especially in finance, gaming, and the Internet of Things. At the same time, the success of Aptos will further promote the use of the Move programming language, injecting new momentum into the entire ecosystem.

Industry Feedback: Industry analysts hold an optimistic view on the prospects of Aptos. Chris Dixon, a partner at the well-known investment firm Andreessen Horowitz, stated: "The Aptos team has rich engineering experience, and their design philosophy is very avant-garde, which is expected to represent the next generation of blockchain infrastructure." Crypto analyst Lark Davis also believes that Aptos's parallel execution engine and smart sharding technology will bring it significant performance advantages.

3. Injective: The Innovative Path of a Decentralized Derivatives Trading Platform

Injective is a decentralized derivatives trading platform designed to provide users with a secure and efficient trading experience for derivatives. The project is built on the Cosmos ecosystem and employs an innovative on-chain trading mechanism and decentralized governance model.

Latest Update: Injective has recently launched version INJ 3.0, introducing several innovative features and optimizations. These include a new inflation adjustment mechanism, an improved on-chain order book, and a new governance module. These updates aim to enhance the platform's performance, security, and usability, providing users with a better trading experience.

Market Impact: As an innovative decentralized derivatives trading platform, the emergence of Injective brings new options to the crypto space. Its on-chain trading mechanism and decentralized governance model are expected to promote the development of derivatives trading, providing users with a fairer and more transparent trading environment. At the same time, the success of Injective will further promote the influence of the Cosmos ecosystem.

Industry feedback: Industry analysts have highly praised Injective's innovative design. Paul Veradittakit, a partner at the renowned investment firm Pantera Capital, stated: "Injective's on-chain trading mechanism and decentralized governance model are very avant-garde and are expected to become a new benchmark in the derivatives trading field." Crypto analyst Lark Davis also believes that Injective's inflation adjustment mechanism will help maintain the long-term value of the INJ token.

4. Gensyn: The innovative integration of AI and blockchain

Gensyn is an innovative project that combines artificial intelligence with blockchain technology. The project aims to build a decentralized AI infrastructure that provides computing resources and data support for various AI applications.

Latest News: Gensyn has recently completed its token issuance and launched its first product, Gensyn AI Cloud. This product is built on blockchain and provides users with secure and efficient AI computing resources. At the same time, Gensyn has introduced an innovative incentive mechanism to encourage users to contribute computing resources and data, jointly building a robust AI ecosystem.

Market Impact: As an innovative project that combines artificial intelligence with blockchain technology, the emergence of Gensyn brings new vitality to the entire crypto space. Its decentralized AI infrastructure is expected to drive the application of AI technology across various industries, especially in finance, healthcare, and the Internet of Things. At the same time, the success of Gensyn will further promote the use of blockchain technology, injecting new momentum into the entire ecosystem.

Industry Feedback: Industry analysts have given high praise for Gensyn's innovative design. Chris Dixon, a partner at the well-known investment firm Andreessen Horowitz, stated: "Gensyn's decentralized AI infrastructure is very advanced and is expected to become a new benchmark in the field of artificial intelligence." Crypto analyst Lark Davis also believes that Gensyn's incentive mechanism will help attract more users to participate and jointly promote the development of the AI ecosystem.

( 5. Hyperbolic: A Distributed Computing Platform for the Web3 Era

Hyperbolic is a distributed computing platform geared towards the Web3 era. The project aims to build an efficient and secure computing infrastructure to provide computational resource support for various decentralized applications.

Latest Update: Hyperbolic has recently completed its token issuance and launched its first product, Hyperbolic Compute. This product is built on blockchain technology and provides users with secure and efficient computing resources. At the same time, Hyperbolic has introduced an innovative incentive mechanism to encourage users to contribute computing resources and collaboratively build a robust distributed computing ecosystem.

Market Impact: As a distributed computing platform geared towards the Web3 era, the emergence of Hyperbolic has brought new vitality to the entire crypto space. Its efficient and secure computing infrastructure is expected to drive the development of various decentralized applications, particularly in finance, gaming, and the Internet of Things. At the same time, the success of Hyperbolic will further promote the use of blockchain technology, injecting new momentum into the entire ecosystem.

Industry Feedback: Industry analysts have highly praised the innovative design of Hyperbolic. Chris Dixon, a partner at the well-known investment firm Andreessen Horowitz, stated: "Hyperbolic's distributed computing platform is very advanced and is expected to become the infrastructure of the Web3 era." Crypto analyst Lark Davis also believes that Hyperbolic's incentive mechanism will help attract more users to participate and jointly promote the development of the distributed computing ecosystem.

4. Economic Dynamics

) 1. Federal Reserve Chairman Powell insists on independence and will not adjust interest rate policy.

Economic Background: The U.S. economy maintained strong growth in the first half of 2023, with a GDP increase of 3.2% year-on-year, but the inflation rate remains above the Federal Reserve's 2% target. The unemployment rate hovers at a low of 4.1%, and the job market continues to be tight. Against this backdrop, Federal Reserve Chair Powell reiterated during his testimony in Congress that he will continue to independently and prudently implement monetary policy until inflation is fully under control.

Important events: Powell stated in his semiannual monetary policy report to the Senate Banking Committee that, despite repeated pressure from President Trump, the Federal Reserve will not act hastily. He emphasized that interest rate policy will remain unchanged for the time being until the impact of the Trump administration's tariffs on prices is fully understood. This stance demonstrates the Fed's ability to withstand political pressure.

Market Reaction: Powell's speech has cooled market expectations for a rate cut by the Federal Reserve in July. Investors believe that Powell's hawkish stance means that interest rates will remain high for the foreseeable future to curb rising inflation. U.S. stocks fell slightly that day, and the dollar index rose. Bond yields edged higher.

Expert Opinion: Goldman Sachs Chief Economist Jan Hatzius stated: "Powell's remarks conveyed a clear signal that the Fed is unlikely to take action before inflation data continues to improve." He added that Powell is trying to gain greater operational autonomy for the Fed, free from political pressure.

2. The easing of the Middle Eastern situation boosts risk assets, with Bitcoin leading the cryptocurrency market.

Economic Background: Recent geopolitical tensions in the Middle East have impacted global financial markets, leading to heightened risk aversion. However, the latest news indicates that Israel and Iran have reached a preliminary ceasefire agreement, which has eased the regional situation and provided a breathing opportunity for investment in risk assets.

Important events: The Israeli military announced that normal activities will be fully restored in all areas, with no further restrictions. Previously, both sides had been in a standoff due to drone attacks in the airspace, triggering a surge in risk aversion in global markets. The achievement of a ceasefire agreement is expected to ease geopolitical risks and provide a "shot in the arm" for financial markets.

Market reaction: After the news was announced, the cryptocurrency market quickly rebounded, with Bitcoin leading the way, rising nearly 5% at one point during the day, and stabilizing above $105,000. Other major cryptocurrencies such as Ethereum and BNB also saw gains across the board. Meanwhile, the three major U.S. stock indices opened higher and continued to rise, and crude oil futures prices also experienced a rebound.

Expert Analysis: Goldman Sachs analysts stated: "The easing of geopolitical risks will re-release investors' risk appetite, driving funds into risk assets." They believe that Bitcoin, as a "safe haven" in the cryptocurrency space, will attract funds in this market cycle. UBS analysts pointed out that the rapid response of the cryptocurrency market also reflects its high liquidity characteristics.

5. Regulation & Policy

1. The U.S. Senate Banking Committee releases principles for the structure of the crypto market.

The U.S. Senate Banking Committee recently released a principles document regarding the structure of the cryptocurrency market, aimed at laying the groundwork for future crypto regulatory legislation. The document was jointly drafted by bipartisan senators and reflects a preliminary consensus reached by Congress on the regulation of crypto assets.

The document proposes three core principles: First, to promote a fair competitive environment, ensuring equal status among market participants and avoiding inconsistent regulatory frameworks for similar assets and entities. Second, to explore the trading considerations of tokenized stocks and the structural mechanisms that facilitate such trading. Third, to discuss the general listing standards for crypto trading products, including spot crypto ETFs, and the regulatory treatment of other potential crypto-based trading products.

The release of this document marks the acceleration of the U.S. Congress in advancing the regulatory process for cryptocurrency assets. For a long time, there has been a divergence in regulatory authority over cryptocurrency assets, with the Securities and Exchange Commission and the Commodity Futures Trading Commission holding differing views. This document is expected to clarify the division of regulatory responsibilities for future legislation and create a more certain policy environment for industry development.

Market participants generally welcome this. Gregg Zippi, Chief Policy Officer of the cryptocurrency exchange Coinbase, stated that the document provides a clear roadmap for the regulation of crypto assets, which will help promote innovation and protect investors. Ryan Selkis, founder of the crypto analytics company Messari, believes that the document reflects Congress's level of attention to the regulation of crypto assets and is expected to drive the industry into a new stage of development.

2. Hong Kong Monetary Authority Chief Executive: The first batch of stablecoins will focus on cross-border trade and Web3 applications.

The Hong Kong Special Administrative Region government published a notice in the Gazette on June 6, announcing that the "Stablecoin Regulation" will officially take effect on August 1, marking the implementation of the world's first comprehensive regulatory framework for fiat-backed stablecoins. Recently, the President of the Hong Kong Monetary Authority, Eddie Yue, stated in a written article that considering stablecoins are a relatively emerging product, the risks involved in issuance activities, user protection, as well as market capacity and long-term development, the licensing will have a rather high threshold, and initially only "a small number of licenses" will be granted.

Yu Weiwen particularly emphasized that entering the stablecoin issuer sandbox program launched by the Hong Kong Monetary Authority in 2024 is not a prerequisite for future applications for stablecoin issuer licenses; on the other hand, even if the participating institutions have entered the "sandbox", it does not necessarily mean they will obtain a license. The Monetary Authority will cautiously consider all license applications according to consistent and strict standards. Yu Weiwen clearly stated that applicants need to propose specific and feasible business plans and real application scenarios, and focus on evaluating their reserve management capabilities, compliance systems, and technical security. The first batch of stablecoins will focus on cross-border trade and Web3 applications.

Industry insiders generally believe that the introduction of a regulatory framework for stablecoins in Hong Kong will inject new momentum into the industry's development. Zhu Chengyu, co-founder of Hong Kong fintech company IDA, stated that stablecoins are payment tools and need to have fiat currency reserves under Hong Kong's regulatory requirements. The main application scenarios are expected to be cross-border trade and investment settlement. He revealed that IDA has always been actively involved in the development of stablecoins and intends to apply for a stablecoin license in Hong Kong.

3. Former Deputy Governor of the People's Bank of China: The regulation of stablecoins needs to address two core issues: monetary attributes and hierarchical belonging.

Li Bo, the former deputy governor of the People's Bank of China and currently the vice president of the International Monetary Fund (IMF), stated at the 2025 Summer Davos Forum that there are two core issues regarding the regulation of stablecoins that need to be urgently addressed: first, whether stablecoins are classified as currency or financial assets; second, if classified as currency, whether they fall under broad money M2 or cash-like M0.

Li Bo pointed out that countries around the world are actively exploring legal and regulatory frameworks for stablecoins, but a global consensus still needs to be further consolidated. This is because the legal and regulatory requirements for the two are completely different; secondly, if stablecoins are classified as currency, what level of currency do they belong to? Is it broad money M2, or cash M0? Different categories of currency require corresponding regulatory systems, including the establishment of mechanisms such as anti-money laundering.

The Bank for International Settlements ### (BIS) has also raised questions about stablecoin regulation in its latest annual report. The report focuses on the next generation of the financial system. "However, stablecoins perform poorly in the three core characteristics necessary for building a sound monetary system, and therefore cannot become the pillar of the future monetary system." Nonetheless, the report also acknowledges that stablecoins have certain advantages, such as programmability, pseudo-anonymity, and convenient access for new users. Additionally, from a technical perspective, they have the potential to offer lower costs and faster transaction speeds in cross-border payments. However, the authors also point out that stablecoins may pose systemic risks compared to currencies issued by central banks and tools issued by commercial banks and other private institutions, such as undermining government monetary sovereignty ###, sometimes achieved through "implicit dollarization" ###, and facilitating illegal activities.

4. Federal Reserve Chairman Powell: Legislation related to stablecoins is progressing, which is good.

In the semi-annual monetary policy report on June 25, Federal Reserve Chairman Jerome Powell told Congress that legislation related to stablecoins is progressing, which is good.

Powell's speech was delivered against the backdrop of the legislative process in the U.S. Congress regarding stablecoin regulation. Currently, the Senate is advancing the "GENIUS Act", which aims to establish a comprehensive regulatory framework for stablecoins, clarifying requirements for issuance, reserves, and audits. Meanwhile, the House of Representatives is also brewing a similar "CLARITY Act". Although there are differences in the legislative processes of both chambers, they both reflect a consensus on regulating stablecoins.

Powell stated that the advancement of stablecoin regulatory legislation will benefit the long-term healthy development of the cryptocurrency asset industry. He believes that reasonable regulation will provide necessary protection for investors while also leaving room for innovation. Powell also emphasized that the Federal Reserve will continue to work closely with other regulatory agencies to jointly promote the construction of a stablecoin regulatory framework.

Market participants reacted positively to Powell's statement. Coinbase CEO Brian Armstrong stated on social media that regulatory certainty will bring confidence to the industry and help attract more institutional investors. Ryan Selkis, founder of crypto analytics firm Messari, believes that the advancement of stablecoin regulatory legislation signifies that crypto assets are being incorporated into the mainstream financial system.