5.16 AI Daily Report: The integration of AI and encryption accelerates, and the U.S. stablecoin regulation reaches an important Node.

1. Headline

1. The U.S. Senate will hold a key vote on the GENIUS Act, which may become the first regulatory framework for stablecoins.

The U.S. Senate Majority Leader John Thune has officially submitted a motion to end debate on the GENIUS Act, which is scheduled for a vote on May 19. If passed, the bill will become the first federal legislative framework for stablecoins in the United States.

The bill aims to regulate the operations, reserve management, and consumer protection of stablecoin issuers. The amendments include a clear prohibition on the abuse of FDIC insurance and strengthened bankruptcy protection provisions to garner bipartisan support. Most importantly, there are restrictions on tech giants, explicitly prohibiting non-financial publicly traded companies like Meta, Amazon, Google, and Microsoft from issuing stablecoins unless they meet strict standards for financial risk, consumer data privacy, and fair business practices, with the aim of maintaining a separation between banking and commerce.

The amendment also strengthens law enforcement mechanisms, allowing the Treasury Department to suspend the registration of issuers in cases of “reckless or willful violations,” and expands regulatory authority over special government agencies. The outcome of this vote will directly affect the regulatory direction of the United States in the digital asset space, drawing widespread attention from the industry.

2. FBI warns that AI scams are escalating, hackers are using deepfake technology to impersonate U.S. officials.

The FBI ( warned on May 15 that hackers have been using deepfake voice and text messages to impersonate senior U.S. officials since April, launching phishing attacks against current and former federal and state officials to steal sensitive data. If officials’ accounts are compromised, hackers can use the trusted information obtained to expand the scope of their attacks.

At the same time, Sandeep Nailwal, co-founder of Polygon, also warned that hackers are using deepfake videos for scams, luring users into installing malicious scripts. He stated that the attack methods are shocking, and many people have already been deceived. This series of events highlights the risks of AI technology being abused in the realm of crime.

The development of deepfake technology has opened up new avenues for cybercrime, making deceptive practices more covert and precise. Experts point out that this mode of attack is difficult to prevent, requiring the government, tech companies, and users to collectively remain vigilant. At the same time, strengthening the regulation and ethical constraints of AI technology is also urgent.

) 3. Meta has once again postponed the release of its flagship AI model “Behemoth”, raising internal doubts.

Insiders revealed that Meta will delay the release of its flagship AI model “Behemoth”, raising concerns internally about its multibillion-dollar AI investment direction. Engineers are working hard to enhance the performance of the large language model, but employees question whether the degree of improvement is sufficient to support a public release.

“Behemoth” was originally scheduled to debut at Meta’s first AI developer conference in April, then postponed to June, and now further delayed to the fall or later. Although Meta was previously praised for quickly catching up with competitors like OpenAI and spent $72 billion to realize Zuckerberg’s AI ambitions, the model’s training has encountered obstacles, resulting in performance not meeting expectations.

The executive team is dissatisfied with the Llama 4 development group and is considering a management reorganization of the AI product department. This series of actions reflects Meta’s challenges in the AI field. Analysts believe that Meta needs to accelerate the rollout of AI products and improve internal management and incentive mechanisms to keep pace with industry competition.

4. Japanese listed company DDC announces Bitcoin reserve strategy, plans to purchase 5,000 coins within 36 months.

Norma Chu, the founder and CEO of the Japanese listed company DDC, revealed that the company will immediately launch a Bitcoin reserve strategy. The first purchase will be for 100 Bitcoins, with a short-term goal of increasing it to 500 within six months, and a final goal of reaching 5,000 within 36 months.

DDC will implement the plan under the guidance of the newly expanded cryptocurrency advisory committee and fund management team. It is reported that DDC’s performance in the fiscal year 2024 has reached an all-time high, with revenue of $37.4 million, a year-on-year increase of 33%. This move marks a significant progress for Japanese companies adopting cryptocurrency assets as financial reserves.

Analysts point out that DDC’s Bitcoin reserve strategy aims to diversify investments, hedge against inflation risks, and profit from the long-term appreciation potential of cryptocurrencies. However, it is also necessary to be wary of the risks brought by the volatility of crypto asset prices. Overall, this move reflects the growing acceptance of crypto assets by traditional enterprises.

5. Alpha trading volume reaches a new high, ZKJ, B2, and SKYAI lead the way.

According to the data panel of @pandajackson42, the trading volume of Alpha reached 770.4 million USD on May 15, setting a new historical high. Among them, the trading volume of ZKJ was 391.9 million USD, B2 was 148.7 million USD, and SKYAI was 79.1 million USD, ranking at the forefront.

Alpha is a trading platform focused on We and AI projects. Recently, with the continuous rise of the AI concept and the constant launch of new projects, the trading activity on the platform has been continuously increasing.

Analysts believe that the surge in Alpha’s trading volume reflects investors’ enthusiasm for the AI and Web3 sectors. However, it is also necessary to be vigilant about the risks of bubbles and speculation. Investors should remain rational and conduct proper risk assessments when participating. Additionally, regulators need to strengthen oversight in this area to maintain market order.

2. Industry News

1. The short-term pullback of Bitcoin has raised concerns in the market, but analysts are optimistic about the medium to long-term prospects.

Bitcoin briefly fell below the $102,000 mark on Tuesday evening, raising concerns in the market. However, analysts say this is just a normal pullback in the medium-term upward trend. Ruslan Lienkha, market director at YouHodler, believes that the current pullback appears to be a correction within a larger medium-term upward trend. After the delay of tariffs between China and the United States, the momentum in the stock market has weakened, and short-term traders have begun to take profits, causing this shift in sentiment to spread to riskier assets.

CoinPanel trading automation expert Kirill Kretov stated that any price fluctuations below 5% are generally considered market noise. Part of this volatility may be due to profit-taking as traders lock in gains after a recent rise. With liquidity being so thin, even a small sell-off can quickly translate into a noticeable pullback. However, aside from the influence of short-term fluctuations, the overall price trend appears healthy, with no obvious signs of an imminent peak.

K33 Research senior analyst Vetle Lunde stated that BTC has just escaped one of the longest periods below neutral financing rates, which is a signal of defensive positioning. This is similar to the patterns observed in October 2023 and October 2024, which are quite different from past market price trends near peaks. He is optimistic that after BTC breaks $100,000, no bubble has yet appeared, paving the way for a potential new high.

2. Ethereum on-chain activity surges, network fees soar by 160%

Sentora stated that due to a significant increase in on-chain activities, the total transaction fees on Ethereum rose by 160% this week. This indicates a substantial increase in the utilization of the Ethereum network and strong demand for transactions. Analysts believe this may be related to the heightened activity in popular application areas such as DeFi and NFTs.

The significant increase in transaction fees on the Ethereum network reflects, on one hand, users’ preference for the Ethereum ecosystem, and on the other hand, it has raised the cost of use for ordinary users. High transaction fees may hinder the application of Ethereum in scenarios such as payments and small transfers, affecting user experience.

However, the Ethereum ecosystem is actively promoting upgrades such as Ethereum 2.0 and sharding, aiming to significantly increase transaction throughput and reduce fees. In addition, some second-layer scaling solutions like Arrum and Optimism are also being deployed rapidly to offload some traffic from the Ethereum network.

Overall, the surge in Ethereum transaction fees reflects an increase in ecosystem activity, but also highlights the urgency of scalability demands. Achieving high throughput with low fees while ensuring decentralization will be a major challenge for Ethereum.

3. The Solana ecosystem continues to heat up, with impressive performances in areas such as DeFi and NFTs.

The Solana ecosystem has been heating up recently, with impressive performances in popular sectors such as DeFi and NFTs. Data shows that the total locked value of the Solana DeFi ecosystem, ###TVL(, has surpassed $4 billion, securing its position as the fourth largest on-chain DeFi ecosystem. Additionally, the trading volume and activity of NFTs on Solana are also on the rise.

Analysts believe that the continuous popularity of the Solana ecosystem is mainly due to its advantages of high throughput and low transaction fees. As a first-generation high-performance public chain, Solana has significant advantages in transaction speed and cost, attracting a large number of applications such as DeFi and NFTs to be deployed.

At the same time, the Solana ecosystem is continuously improving, with increasingly sound infrastructure including cross-chain bridges, decentralized exchanges, wallets, and more. The strong performance of the Solana ecosystem token SOL has also injected momentum into the ecosystem’s development.

However, the continued warming of the Solana ecosystem also faces some challenges, such as the need for further improvement in security and decentralization. In addition, the competitive pressure from other high-performance public chains like Aptos and Sui cannot be ignored.

Overall, the continued warming of the Solana ecosystem reflects the market’s preference for high-performance public chains. However, to achieve long-term sustainable development, Solana still needs to continuously improve and innovate in multiple areas.

) 4. Regulatory agencies strengthen the regulation of stablecoins, the GENIUS Act may become a milestone.

The majority leader of the U.S. Senate has officially submitted a motion to end debate on the GENIUS Act, which is scheduled for a vote on May 19. If passed, the bill will become the first federal legislative framework in the U.S. for stablecoins.

Sources in the Senate have revealed that the amendments contain explicit prohibitions against the abuse of FDIC insurance and strengthen bankruptcy protection provisions to garner bipartisan support. The latest bipartisan amendments also propose to add three provisions: stricter rules for technology companies involved in financial assets; enhanced consumer protection mechanisms; and increased oversight of government officials.

Industry insiders believe that the passage of the GENIUS Act will establish a basic framework for stablecoin regulation, which will benefit the long-term healthy development of the industry. Clear regulatory rules will enhance investor confidence, attract more institutional funds, and promote industry growth.

However, some analysts are concerned that overly strict regulations may stifle innovation and limit the room for industry development. In addition, finding a balance between protecting investors’ rights and supporting innovation will also be a significant challenge.

Overall, the regulatory legislation for stablecoins will establish rules for the development of the industry, but the specific details and execution effects remain to be seen. Various parties inside and outside the industry need to reach a consensus on this to promote the orderly and healthy development of the industry.

5. Competition among cryptocurrency exchanges intensifies, balancing innovation and compliance.

According to reports, major cryptocurrency exchanges exhibit different characteristics in compliance, product innovation, and user growth. By having outstanding advantages in depth and liquidity, By shows significant inflows and TVL, while get and Coinbase stand out in user growth and derivatives performance, maintaining a stable user base.

Analysis indicates that the current market is in a correction phase. As the regulatory environment becomes clearer and traditional financial institutions accelerate their entry, the cryptocurrency trading industry may welcome development opportunities in the second half of the year.

The competition among exchanges is intensifying, which will promote industry innovation and continuously optimize products and services on one hand; on the other hand, it will accelerate industry reshuffling, and compliance will become a decisive factor. Exchanges that can strike a balance between innovation and compliance will have a better chance of standing out.

At the same time, the entry of traditional financial institutions will also change the industry landscape. They will leverage their own financial strength, compliance experience, and user base to make strides in the crypto field. Crypto exchanges need to adjust their strategies in a timely manner to maintain competitiveness.

Overall, the increasing competition among cryptocurrency exchanges reflects the industry’s growing maturity, and balancing innovation with compliance will be key to future development. Those who can seize opportunities and continuously innovate while adhering to regulations will be able to capture a larger market share.

3. Project News

) 1. Metis AI high-performance chain Hyperion launches AI-native Hackathon HyperHack

Metis AI’s high-performance chain Hyperion has officially launched a 3-month AI-native Hackathon called HyperHack, offering excellent projects a prize of $200,000, mentorship, and early launch opportunities on the mainnet. Hyperion is a high-performance, AI-optimized Layer 2 solution designed specifically for AI, DePIN, DeFi, and GameFi. This hackathon focuses on four tracks, including three general tracks and one special expansion track.

The three general tracks include: AI-native and core alignment projects, real-time systems, and infrastructure and ecological tools. The special expansion track is aimed at projects that expand the Hyperion built-in AI consortium Alith. The top projects in tracks 1 and 2 will receive a $150,000 incentive, outstanding projects in track 3 will receive a $20,000 reward, and the special expansion track will offer a $30,000 Alith integration bonus.

This hackathon aims to promote the innovative integration of AI and Web3, attracting more developers and entrepreneurs to join this emerging field. Hyperion, as a high-performance chain optimized for AI, provides high throughput and low latency infrastructure support for AI-native applications. Through HyperHack, Metis hopes to accelerate the integration of AI and blockchain technology, fostering more innovative applications and driving the development of the Web3 ecosystem.

Industry insiders believe that the combination of AI and blockchain will bring disruptive innovation and is expected to address many pain points currently faced by blockchain. AI-optimized links like Hyperion provide the infrastructure support for this integration, while hackathons offer developers the opportunity to showcase their creativity and put it into practice. In the future, AI may become an indispensable key force in the Web3 ecosystem.

) 2. Allora and Mind Network launched the first privacy-preserving price oracle FHE TrustPrice In

Mind Network has partnered with Allora Network to launch the first privacy-preserving price oracle, FHE TrustPrice In, aimed at the DeFAI scenario. This oracle utilizes Allora’s decentralized machine learning and Mind Network’s homomorphic encryption technology to achieve high precision predictions and end-to-end encryption, providing privacy protection support for DeFAI.

The core innovation of FHE TrustPrice In lies in combining machine learning with fully homomorphic encryption, ensuring the privacy and security of data during the prediction process. Allora is responsible for providing decentralized machine learning models, while Mind Network encrypts the data using fully homomorphic encryption technology, ultimately outputting encrypted prediction results.

This oracle can be widely used in DeFAI scenarios that require privacy protection, such as financial forecasting and risk assessment. Compared to traditional oracles, it not only provides high-precision predictions but, more importantly, protects data privacy, helping to address the trust and privacy issues faced by DeFAI.

Mind Network has open-sourced the Mind Voter prototype codebase, showcasing the working mechanism of encrypted processing of Bitcoin prices, providing a reference for developers to build FHE-compatible proxies. In the future, Mind Network and Allora will further expand the application scenarios of FHE TrustPrice In, promoting the development of the DeFAI ecosystem.

Industry insiders believe that privacy protection is one of the key challenges in the development of DeFAI. The emergence of FHE TrustPrice In provides a new approach to addressing this issue and is expected to promote the large-scale application of DeFAI. At the same time, this oracle also demonstrates the immense potential of the integration of blockchain and artificial intelligence technologies, bringing new development opportunities to the Web3 ecosystem.

) Giza completes $5.2 million financing to promote innovation in the integration of AI and Web3 protocols.

The AI platform Giza, based on smart contracts and Web3 protocols, has announced the completion of a total financing of $5.2 million. Giza is developing a trustless protocol aimed at decentralizing machine learning inference computation, providing guarantees for the open economy of open-source AI.

The protocol enables AI developers to generate zero-knowledge proofs, ensuring the transparency and credibility of verifiable machine learning model deployments. Giza aims to create a secure, transparent, and auditable AI ecosystem to address the trust issues present in current AI systems.

Giza’s financing is led by institutional investors such as Base Ecosystem Fund, Echo, and CoinFund. These investors are optimistic about Giza’s innovative potential in promoting the integration of AI and Web3. Giza will use the funding to further refine its protocol and promote ecosystem development.

Industry insiders believe that Giza represents a new trend in the integration of AI and blockchain technology. By putting AI calculations on the blockchain, Giza not only enhances the transparency and credibility of AI systems but also lays the foundation for the development of open-source AI. In the future, Giza is expected to become a key hub connecting AI and the Web3 ecosystem, promoting the deep integration of both.

At the same time, Giza’s financing also reflects investors’ enthusiasm for the AI + Web3 sector. With the continuous development of artificial intelligence technology, its integration with blockchain is bound to bring disruptive innovations, becoming an important driving force for the development of the Web3 ecosystem.

4. Network launches the Signal-Driven Agentic AI protocol, promoting collaboration among AI agents.

Network officially releases the Signal-Driven Agentic AI protocol, a blockchain-based infrastructure designed specifically for the collaboration of multiple ### AI Agents ###. This protocol supports AI division of labor, native on-chain execution, and auditable tracking, aiming to create an open, efficient, and trustworthy AI collaborative network.

The Signal-Driven Agentic AI protocol breaks down the workflow of AI agents into five steps: Perception ###Sense###, Planning (Plan), Decision-making (Decide), Action (Act), and Learning (Learn), with different “expert Agents” responsible for each link. These Agents are connected and scheduled through on-chain Signal events, ultimately submitting, aggregating, and anchoring on the Bitcoin chain through Rollup and Hub. All operations are signed on-chain, auditable, and traceable, supporting paid subscriptions and privacy protection.

The protocol aims to address the pain points of agent collaboration in current AI systems and provide a truly Web3-adapted path for intelligent agent collaboration. By being natively on-chain, it ensures the transparency and credibility of AI computations; through division of labor and collaboration, it enhances the efficiency and intelligence level of AI systems.

Network indicates that the Signal-Driven Agentic AI protocol will bring new possibilities for the integration of AI and blockchain. In the future, AI collaborative networks based on this protocol are expected to play an important role in multiple fields such as finance, gaming, and the Internet of Things.

Industry insiders believe that the collaboration of AI agents is a key component in achieving general artificial intelligence. The protocol proposed by Network provides the infrastructure support for this goal and is expected to promote the development of AI technology. At the same time, this protocol also reflects the unique advantages of blockchain in ensuring the transparency and credibility of AI systems, helping to address the trust issues faced by the development of AI.

( 5. xAI responds to the Grok bot incident, will disclose system prompts and strengthen review

The artificial intelligence company xAI issued a statement in response to its AI chatbot Grok posting politically and racially charged content on Twitter) before X(. xAI stated that Grok’s prompts were unauthorizedly modified on May 15, violating internal policies.

To enhance the transparency and reliability of Grok, xAI will take several measures: publicly releasing Grok system prompts on GitHub, strengthening the review process for prompt modifications, and forming a round-the-clock monitoring team. These initiatives aim to prevent similar incidents from occurring again and to ensure the safety and compliance of Grok’s output.

The Grok incident has once again raised concerns about the safety and controllability of AI systems. As a widely accessible AI assistant, Grok’s output directly affects user experience and public image. Once it goes out of control, it not only impacts xAI’s business operations but could also have a negative effect on the entire AI industry.

Industry insiders point out that the security and controllability of AI systems are significant challenges faced by AI companies. xAI’s response measures reflect its emphasis on this issue, but in the long run, a more complete management mechanism needs to be established. At the same time, the introduction of relevant regulatory policies will also help to standardize the development of the AI industry and protect public interests.

Overall, the Grok incident warns AI companies to strengthen system control, while also prompting the entire industry to reflect on the ethical bottom line of AI technology. Only by addressing issues of safety and controllability can AI truly serve humanity and unleash its enormous application potential.

4. Economic Dynamics

) 1. The Federal Reserve signals policy adjustments, and the crypto market is expected to remain strong.

Economic Background: Recent inflation data shows that the U.S. April PCE inflation expectation is 2.2%, a decrease from previous levels, indicating that the Fed’s policies to control inflation are beginning to take effect. However, Powell warned that we may enter a period of more frequent and persistent supply shocks in the future, which poses a significant challenge for both the economy and the central bank.

Important event: In a recent speech, Federal Reserve Chairman Powell revealed that the Fed is re-evaluating its monetary policy framework, planning to complete revisions to this framework in the coming months to enhance its flexibility in responding to inflation and supply shocks. This sends a strong signal that the Fed is adjusting its policy.

Market reaction: Analysts say that Powell’s speech helps stabilize market expectations, alleviating rate hike pressure, which is favorable for risk assets. Inflation data is trending downward, and the policy is leaning towards easing, which poses a medium-term bullish outlook for the crypto market. It is suggested to monitor whether the $100K support for Bitcoin holds firm; if it does, $105K will become a short-term resistance level.

Expert Opinion: Eckhard Schulte, Chairman of the Board of MainSky Asset Management, believes that U.S. interest rates remain restrictively high and suggests that the Federal Reserve should cut rates as soon as possible to avoid the risk of economic recession. Although tariffs may lead to rising inflation, this will be a one-time effect. He warns that if the Fed overreacts, it will lag behind the curve, and this potential policy mistake represents the highest risk of an economic recession in the U.S. at present.

2. The global economic outlook is deteriorating, and the trade war is exacerbating uncertainty.

Economic Background: According to the latest report from the United Nations, the global economic outlook has significantly worsened since the forecast made in January 2025. Global economic growth is expected to slow to 2.4% in 2025, a notable decline from 2.9% in 2024. The increase in tariffs and uncertainty in trade policies have raised production costs, leading to a slowdown in corporate investment, impacting both developed and developing economies.

Important Events: The Trump administration has recently imposed tariffs on several countries and regions, triggering international trade disputes. This has intensified pressure on global supply chains, casting a shadow over economic prospects. The report points out that developing countries with a heavy reliance on trade are facing multiple challenges, including reduced exports, falling commodity prices, tightening financing conditions, and increased debt burdens.

Market Reaction: The escalation of the trade war has led to a decline in market confidence regarding economic growth prospects. Global stock markets are experiencing significant fluctuations, and the US dollar index is rising, reflecting that investors are gradually withdrawing from risk assets. Meanwhile, commodity prices are under pressure, with significant declines observed in futures for crude oil, non-ferrous metals, and other commodities.

Expert Opinion: Robin Foley, head of Fidelity’s $2.3 trillion fixed income business, stated that Trump’s trade war is disrupting the economic outlook, and that Federal Reserve policymakers’ goals of curbing inflation and maximizing employment are being “pulled in completely different directions.” She added that the central bank is in a “predicament,” noting that while the efforts to combat inflation are solid, employment remains to be seen.

( 3. Japan may not reach a trade agreement with the United States by the end of July.

Economic Background: Under the trade protectionist policies of the Trump administration, Japan is facing enormous pressure from the United States. As an important ally of the U.S. in Asia, the development of bilateral trade relations will significantly impact the global economic landscape.

Important event: Japanese Prime Minister Shigeru Ishiba initially prioritized reaching a trade agreement with the United States ahead of other countries. However, officials and analysts indicated that business leaders and ruling party members urged him to reject any agreements that would jeopardize the automotive industry or threaten domestic farmers, forcing him to reconsider.

Market reaction: The Japanese government’s shift in stance has intensified uncertainty in the market regarding trade prospects. The Nikkei index has plummeted, and the yen has weakened against the dollar. Investor confidence in Japan’s economic growth has been shaken, with foreign capital continuing to flow out of the Japanese stock market.

Expert Opinion: A Japanese official stated, “Although Japan is very eager to be the first country to negotiate with Washington on tariff issues, this sense of urgency has now shifted to ensuring that Japan secures a good deal.” Officials believe it is unlikely to reach an agreement before the Japanese Senate elections at the end of July.

) 4. The Federal Reserve is caught in a “dilemma” of inflation and employment.

Economic Background: The fundamentals of the US economy remain robust, but inflationary pressures continue to rise. In April, the CPI rose by 4.9% year-on-year, far exceeding the Federal Reserve’s target level of 2%. Meanwhile, the labor market remains strong, with the unemployment rate holding at a low of 3.6%.

Important Event: The Trump administration has imposed tariffs on multiple countries and regions, leading to international trade disputes. This has intensified global supply chain pressures, increased corporate production costs, and may further raise inflation levels.

Market Reaction: Investors have differing expectations regarding the Federal Reserve’s policy direction. Futures market trading shows that some investors anticipate the Fed will resume its interest rate cut cycle in September to support employment; however, there are also investors who believe that the Fed still needs to raise interest rates further to curb inflation.

Expert Opinion: Fidelity’s bond chief Robin Foley stated that Trump’s trade war “pulls the Fed’s goals of curbing inflation and maximizing employment in completely different directions.” She added that the central bank is in a “bind,” with efforts to combat inflation being decent, but employment still needs to be observed.

5. Federal Reserve’s Bullard warns that trade policies could trigger supply chain disruptions

Economic background: The U.S. economy is fundamentally solid, and the inflation rate is expected to fall to the target level of 2%. However, the uncertainty of trade policies casts a shadow over the outlook, increasing the risks.

Important event: The Trump administration imposed tariffs on multiple countries and regions, triggering international trade disputes. This has intensified pressure on global supply chains and may lead to a slowdown in economic growth and an increase in inflation.

Market reaction: Investors’ concerns about supply chain disruptions have intensified. The US stock market has experienced significant volatility, and manufacturing stocks are under pressure. Meanwhile, commodity prices are under pressure, with futures for crude oil, non-ferrous metals, and other commodities showing a noticeable decline.

Expert Opinion: Federal Reserve Governor Barr stated that trade policies have cast a shadow over the outlook and increased uncertainty. He emphasized the important role of small businesses in the supply chain and overall economy, warning that potential supply chain disruptions are “especially severe” for small businesses, partly because they have fewer opportunities to access credit. He added that small businesses often provide specialized inputs that are hard to obtain from elsewhere, and business closures could further disrupt the supply chain.

5. Regulation & Policy

1. The U.S. Senate will hold the final vote on the stablecoin GENIUS bill on May 19.

U.S. Senate Majority Leader John Thune has formally submitted a motion to end debate on the GENIUS Act, which is scheduled for a vote on May 19. The bill aims to establish a federal regulatory framework for stablecoins, regulating their issuance and operation.

As the first federal legislation in the United States targeting stablecoins, the GENIUS Act is of significant importance. The act requires stablecoin issuers with assets exceeding $10 billion to be regulated by the Federal Reserve, while smaller institutions are regulated at the state level; all stablecoins must be fully backed by assets such as U.S. dollars or treasury bonds. The latest bipartisan amendment seeks to introduce three additional provisions: stricter rules for technology companies involved in financial assets; strengthened consumer protection mechanisms; and enhanced oversight of government officials, including figures like Musk.

The House of Representatives previously passed a similar “STABLE Act,” requiring issuers of stablecoins like USDT to operate with complete transparency. If the GENIUS Act is passed, it will become the first federal legislative framework for stablecoins in the United States. Senate sources revealed that the amendments include a clear prohibition on the abuse of FDIC insurance and strengthening bankruptcy protection provisions to garner bipartisan support. The outcome of this vote will directly impact the regulatory direction of the United States in the digital asset space.

Market participants generally believe that the clarification of stablecoin regulation will help boost investor confidence and promote institutional funds into the cryptocurrency market. However, there are also concerns that excessive regulation may limit innovation and affect the application of stablecoins in areas such as payments and DeFi. Experts indicate that regulation should protect investors and maintain financial stability while leaving room for innovation.

2. A U.S. court has rejected the SEC’s motion to settle with Ripple, and both parties must reapply.

A U.S. court dismissed the motion for settlement between the U.S. Securities and Exchange Commission ### SEC ### and Ripple on the grounds of procedural error. The motion sought the court to lift the injunction in the August 2024 judgment and approve the release of $50 million from the $125 million civil penalty escrow to be paid to the SEC, with the remaining funds returned to Ripple.

It is reported that the judge determined that the application did not follow the procedural requirements outlined in Rule 60 of the Federal Rules of Civil Procedure. Ripple’s Chief Legal Officer stated that they will resubmit a settlement application that complies with the rules. Legal experts analyze that both parties need to detail the reasons for the settlement according to the standards set forth in Rule 60, including the basis for the SEC’s decision to waive other charges, etc. The entire process is expected to take another 3-5 weeks. The judge emphasized that this dismissal is only related to procedural defects and does not involve a substantive review of the settlement content.

Previously, the SEC accused Ripple of illegally selling $1.3 billion worth of XRP tokens in its 2013 ICO, constituting an unregistered securities offering. After more than two years of litigation, the parties reached a settlement at the end of 2024. The settlement agreement, approved by the court, will conclude this far-reaching cryptocurrency lawsuit.

Industry insiders believe that the settlement between the SEC and Ripple will set an important precedent for cryptocurrency regulation, influencing the direction of future similar cases. However, some argue that the terms of the settlement are too lenient and fail to address the core issue of cryptocurrency securitization. Experts are calling for regulatory agencies to protect investors’ rights while allowing space for cryptocurrency innovation.

3. Federal Reserve Chairman Powell signals a policy framework adjustment, which may be positive for the crypto market.

Federal Reserve Chairman Powell stated that they are reassessing the monetary policy framework and adjusting the relevant language to enhance flexibility in responding to inflation and supply shocks, with an expected review completion in a few months. He noted that the April PCE inflation expectation is 2.2%, indicating that inflation control is effective, and the current policy has achieved a “soft landing,” which is a rare positive outcome.

Powell’s speech has signaled an adjustment in the Federal Reserve’s policy framework, sparking optimistic expectations in the market for the performance of crypto assets. Analysts believe that the signal of policy adjustment helps stabilize market expectations, eases interest rate hike pressure, and is favorable for risk assets. Inflation is stabilizing and gradually declining, and the policy leans towards easing, which constitutes a medium-term bullish outlook for the crypto market. It is recommended to pay attention to whether Bitcoin can maintain the $100,000 support level; if it holds, the short-term resistance level is $105,000. In terms of operations, focus on Ethereum, ecosystem tokens, and inflation-resistant tokens, which are highly sensitive to policy changes.

Powell emphasized that in the face of more frequent and persistent supply shocks, the future framework will incorporate long-term structural factors and seek more flexible policy tools. This means that the Federal Reserve will place greater importance on managing inflation expectations and will adopt unconventional measures when necessary.

Experts point out that Powell’s speech conveys a cautiously optimistic attitude from the Federal Reserve regarding the economic outlook. If inflation continues to decline, the cryptocurrency market is expected to maintain an upward trend driven by loose policies. However, it is still necessary to be vigilant about the impact of uncertain factors such as geopolitical risks.