Alpaca Finance Institutional Newsletter #35
Highlights:
- US regional bank shares sink despite Fed’s reassurance
- Feds are increasing interest rates by 0.25%
- Coinbase International Exchange launches amid SEC crypto crackdown in the US
Despite Federal Reserve Chairman Jerome Powell’s assurance that the banking sector is “sound” and “resilient,” share prices of several U.S. regional banks plummeted in after-hours trading on May 3. PacWest Bancorp, one of the affected banks, fell by 52.5% after reports of the bank exploring strategic options. Other regional banks, including Western Alliance Bancorp, Metropolitan Bank, and HomeStreet, also experienced significant drops in share prices.
Metropolitan Bank had previously offered services to crypto firms but closed its digital asset vertical due to concerns about the cryptocurrency industry. Western Alliance Bancorp had integrated blockchain-based payment solutions. Powell’s comments on the banking sector came as the Federal Reserve announced a 25 basis points interest rate hike. However, his reassurances were met with criticism on Crypto Twitter, with users mocking his claim that conditions in the banking sector had improved. Additionally, First Republic Bank experienced a significant failure, with news of a government receivership causing a 20% drop in the bank’s share price.
Crypto exchange Coinbase has announced the launch of its global platform, Coinbase International Exchange (CIE), for institutional investors outside the United States. The move comes amid regulatory challenges in the U.S., with Coinbase expanding its business abroad. The news has garnered mixed reactions from the crypto community. Some express support for Coinbase’s global expansion and believe it is a positive step for the future of crypto. Others criticize U.S. regulators, particularly the SEC and its chair, Gary Gensler, accusing them of over-regulation and failing to protect investors.
News
- JPMorgan to acquire troubled First Republic Bank
- Coinbase stock will be ‘weighed down’ until US rules are clear: Citi
- Retail CBDCs bring unknown ‘consequences’ to financial system — IMF director
- Venmo will enable fiat-to-crypto payments in May
Products
- Securities token platform launches MPC wallet for institutions
- Mastercard launches Web3 user verification solution to curb bad actors
- Blur introduces NFT perpetual lending protocol and surpasses $16M in loans one day after its launch
- Sports Illustrated launches Polygon-based NFT ticketing platform
Regulation
- Tokens but not crypto: Nigeria SEC prepares new digital asset rules
- UK government targets fraudsters with new ban on cold calls for crypto
- French Senate proposal would allow influencers to promote cryptocurrency
- SEC steps back from defining digital assets in new hedge fund rules
- Argentina’s central bank halts cryptocurrencies from payment apps
Funding
- Bhutan’s DHI and Bitdeer to raise $500M to develop sustainable mining operations
- Fuse blockchain pledges $10M for ecosystem development
- Bitget pledges $10M for Blockchain4Youth corporate responsibility project
