Monetary Policy

Author: Tonya M. Evans Translation: Odaily Planet Daily Golem On February 19, the U.S. Securities and Exchange Commission (SEC) Trading and Marketing Division released a new FAQ clarifying how broker-dealers should handle payment stablecoins under the net capital rule. Subsequently, SEC Cryptocurrency Working Group Chair Hester Peirce issued a statement titled "A 2% Discount Will Do." Peirce stated that if broker-dealers apply a "2% discount" to their own positions in qualifying payment stablecoins when calculating net capital, rather than a punitive 100% discount, SEC staff would not object. Although this may sound somewhat obscure, this accounting adjustment could be the beginning of a softening of the SEC's stance on cryptocurrencies since early 2025.

Federal Reserve Chair Neel Kashkari strongly questions the practicality of cryptocurrencies, believing they have yet to prove any value, and compares their potential to that of artificial intelligence. He criticizes stablecoins for not bringing substantial upgrades to the financial system and argues that their advantages mainly do not target American consumers, highlighting his skepticism towards cryptocurrencies and contrasting with the government's supportive stance.

The U.S. SEC's recent policy change allows broker-dealers to treat certain dollar-pegged stablecoins as near-cash instruments. This change reduces capital requirements and encourages the integration of stablecoins into traditional finance, promoting efficiency and wider adoption in financial markets.

The President of the Federal Reserve Bank of Minneapolis, Kashkari, strongly criticizes cryptocurrencies for lacking real value, questions the advantages of stablecoins, and defends the independence of central banks. He pointed out that compared to artificial intelligence, cryptocurrencies have failed to demonstrate their economic utility, and emphasized the need to maintain the independence of monetary policy, which is in opposition to the crypto policies of the Trump administration.

ChainCatcher Message: Brokers generally apply a 100% discount to stablecoins, meaning that related holdings cannot be counted towards net capital, severely limiting institutional participation in stablecoin activities.

ChainCatcher message, according to Jin10 report, before the data release, based on CME "FedWatch," the probability of the Federal Reserve cutting interest rates by 25 basis points by March is 4.1%, and the probability of holding rates steady is 95.9%. By April, the probability of a total 25 basis point cut is 16.4%, and the probability of holding rates steady is 83%. The probability of a total 50 basis point cut is 0.5%. By June, the probability of a total 25 basis point cut is 44%.

Ray Dalio warns that central bank digital currencies (CBDCs) may compromise financial privacy, enable instant taxation, and impose capital controls, raising concerns about government oversight and civil liberties as numerous central banks pilot these systems.

Federal Reserve Chair Neel Kashkari strongly questions the practicality of cryptocurrencies, believing they have yet to prove any value, and compares their potential to that of artificial intelligence. He criticizes stablecoins for not bringing substantial upgrades to the financial system and argues that their advantages mainly do not target American consumers, highlighting his skepticism towards cryptocurrencies and contrasting with the government's supportive stance.

The new guidelines issued by the U.S. Securities and Exchange Commission (SEC) allow brokers to calculate net capital with a 2% discount for payments made in stablecoins. This change could promote the adoption of stablecoins in mainstream finance. At the same time, this policy will be implemented alongside the enactment of the GENIUS Act, helping to clarify the status of stablecoins within the existing regulatory framework and making it easier for market participants to engage in digital asset trading.

_Bitcoin closely tracks shifts in U.S. T-bill issuance, more than M2 or Fed balance sheet changes._ For years, crypto investors relied on M2 money supply and Federal Reserve balance sheet data to predict Bitcoin’s direction. Liquidity expansion often aligned with rallies, while tightening

The U.S. Securities and Exchange Commission (SEC) latest guidelines allow securities brokers to apply a 2% discount rate to stablecoin holdings when calculating capital, significantly reducing the capital cost of stablecoins and enhancing their compliance status. This change promotes the development of tokenized securities and crypto asset businesses and is seen as an important step by the SEC to modernize crypto regulation.

European Central Bank President Lagarde is considering stepping down early, sparking market attention on her successor. Lagarde holds a tough stance on cryptocurrencies, and it is expected that her successor may relax regulations, which could benefit the development of the Web3 industry. As the digital euro progress advances and MiCA II is implemented, Europe may shift toward a more flexible digital currency system, thereby regaining its digital economy competitiveness.

Christine Lagarde, ECB President, faces a pivotal moment with potential departure before her term ends in 2027, coinciding with the Euro digital currency project's next phase. The ECB plans public consultation for payment service providers in March 2026, while costs for the digital Euro are significant. Leadership transition may influence communication but not policy changes.

Robert Kiyosaki, author of "Rich Dad Poor Dad," posted on X that despite the decline in the crypto market, he still bought 1 Bitcoin for $67,000. He believes that when the US dollar system is impacted by debt issues, there will be a large-scale money printing, and with Bitcoin's total supply approaching its cap, its advantages will surpass gold.

The crypto market is experiencing some serious sentiment shifts as legislators gain traction. After the Genius Act resulted in significant stablecoin inflows and boosted liquidity into 2025, focus has now shifted to the Digital Asset Market Clarity Act. According to Polymarket, there’s a 90%

ChainCatcher reports that, according to Jinshi, traders now believe the Federal Reserve will wait until July to cut interest rates.

The global money market faces significant volatility, driven by systemic funding issues highlighted by a macro analyst. Recent liquidity injections from the U.S. and China, alongside shifts in the Federal Reserve's balance sheet, suggest underlying market stress, potentially foreshadowing a downturn in risk assets, including crypto.

The paper "Kalshi and the Rise of Macro Markets" highlights the effectiveness of prediction markets in forecasting macroeconomic indicators like inflation and GDP, showing they can outperform traditional methods. It acknowledges regulatory scrutiny while affirming their growing relevance in economics and finance.

Written by: Li Dan Source: Wall Street Journal Although cryptocurrencies have plummeted this year, the Trump family appears to be trying to save face. The cryptocurrency platform they support is reshaping the relationship between Wall Street and digital assets. On Wednesday, the 19th, Eastern Time, the Trump family-involved cryptocurrency platform World Liberty Financial hosted a conference at Mar-a-Lago. The event brought together financial industry executives, government officials, and crypto industry figures, highlighting how virtual assets are both a policy priority and a family profit center during Trump's second term. This event by World Liberty Financial attracted about 500 attendees, including Goldman Sachs CEO David Solomon. The former cryptocurrency skeptic revealed at the conference that he holds .