Monetary Policy

_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 .

While the White House actively embraces cryptocurrencies, the Federal Reserve (Fed) has reportedly voiced strong opposition. Neel Kashkari, President of the Minneapolis Federal Reserve Bank, went on the offensive on Thursday, stating that cryptocurrencies, including Bitcoin and stablecoins, have yet to prove any "practical use." At the "2026 Midwestern Economic Outlook Summit" held in Fargo, North Dakota, Neel Kashkari compared the everyday practicality of artificial intelligence (AI) tools to cryptocurrencies. "Cryptocurrencies have been around for over 10 years, yet they remain useless," he said. In contrast, AI technology "has genuine long-term development potential for the U.S. economy." To support his point, he asked the audience on the spot: how many people in the past week have used ChatGPT or Gemini?

ChainCatcher reports that at 21:30 Beijing time, the United States will unveil key data including the December PCE Price Index and the Q4 actual GDP annualized quarterly rate. The market generally expects inflation to modestly rebound and the economy to remain resilient. This combination could impact the Federal Reserve's interest rate cut outlook and reinforce the stance of holding steady. Caution is advised for market fluctuations at that time.

Strategy CEO Phong Le stated on the X platform that the Basel Accords have a profound impact on global banking capital standards and digital asset businesses. If the United States aims to become the "Global Crypto Capital," it needs to reassess the capital provisioning and risk weighting implementation under this agreement.

The White House has set March 1 as the deadline for negotiations on stablecoin reward provisions, sparking intense competition between the banking industry and the crypto sector over legal issues related to stablecoin yield payments. ProShares and Anchorage Digital have taken the lead in laying out the groundwork to promote market infrastructure development. This legislation will have a profound impact on the stablecoin market and traditional banks, potentially changing the flow of funds.

Ethereum co-founder Vitalik Buterin discusses the integration of FOCIL and EIP-8141, emphasizing their design for censorship resistance, while criticizing AI autonomy for increasing human risks. He believes these systems should maintain decentralized power, avoiding control by a single proposer or autonomous system, to ensure human freedom and safety.

The latest paper by Federal Reserve researchers highly praises the role of prediction markets in economic analysis, specifically highlighting that the prediction platform Kalshi surpasses traditional methods in interest rate and CPI forecasts, and provides continuously updated probability distributions. The study notes that Kalshi's predictions are fully consistent with actual outcomes and emphasizes the unique value of retail investor participation in information aggregation.

Minneapolis Fed President Neel Kashkari labeled cryptocurrency as "useless," expressing concerns about stablecoins' potential impact on traditional finance. He emphasized the challenges of converting digital assets into fiat currency and urged thorough questioning of crypto advocates' claims.

Minneapolis Federal Reserve President Kashkari says Waller is qualified to serve as Federal Reserve Chair and looks forward to further discussions. Although the White House officially nominated Waller, his nomination probability has dropped to 95%, while Judy Shelton's nomination probability has increased to 4-5%. Experts believe that even if Waller is not nominated, Shelton is unlikely to become a potential candidate.

European Central Bank's Nagel pointed out that euro-denominated stablecoins can reduce cross-border payment costs and address the risks posed by dollar stablecoins. He emphasized that if dollar stablecoins replace domestic currencies, it could weaken the effectiveness of monetary policy. Currently, the European Central Bank is evaluating distributed ledger technology and plans to launch the digital euro in 2029.