After a short hiatus, we're back with another recap of the week's cryptocurrency news from PointPay! The transition from spring to summer has been eventful in the world of cryptocurrencies, with a plethora of news and developments. Let's dive into the details and get a closer look at some of the highlights, including major company layoffs, TON's changes, Circle's progress, and regulatory updates from around the globe.

Let's explore further!

Nansen and Binance Announce Workforce Reductions

Nansen, an analytical platform, and Binance, a prominent cryptocurrency exchange, have both announced significant staff reductions. Nansen has let go of around 30% of its employees, while Binance is planning to downsize approximately 20% of its workforce in June.

According to Alex Svanevik, the CEO of Nansen, the layoffs were prompted by an excess of personnel that had accumulated within the company, coupled with challenges faced in the cryptocurrency markets. Nansen's expenses were deemed too high given the prevailing market conditions, despite revenue generated from serving corporate and institutional clients. Launched in 2019, Nansen attracted investments from notable companies such as a16z (Andreessen Horowitz), Coinbase Ventures, and Tiger Global.

As for Binance, the exact number of employees affected by the layoffs remains undisclosed, but an estimated 20% reduction is anticipated. Cryptocurrency journalist Colin Wu suggests that Binance's workforce downsizing is a response to underperforming employees or individuals who do not align with the company's culture. Earlier this year, Binance's CEO expressed plans to expand the exchange's team by 15-30% throughout the current year.

Despite the layoffs, both companies have expressed their intention to continue hiring new talent to carry out crucial tasks.

Changes within TON

TON Foundation, associated with the TON blockchain platform, has proposed implementing a mechanism to burn 50% of transaction fees on the TON network. However, this proposal requires approval from the majority of validators and is currently under discussion. Concurrently, the number of registered addresses on the TON network witnessed a 1% increase from May 15 to May 21, reaching a milestone of 2,660,844. TON Foundation has also launched the Liquidity Mining Rewards Campaign to attract users from other blockchains to the TON ecosystem and enhance its liquidity. This campaign places special emphasis on stablecoins and Wrapped Bitcoin.

Furthermore, the TON Accelerator Program plans to allocate up to $25 million to promising projects based on TON in 2023, providing additional opportunities for developers and entrepreneurs. These developments continue to garner attention within the cryptocurrency community, bolstering TON Foundation's standing in the realm of blockchain technology.

US Opposition to CBDC

Alex Mooney, a Republican legislator, has introduced a bill aimed at impeding the pilot project for launching a Central Bank Digital Currency (CBDC). The bill has garnered support from several Republican colleagues in the House of Representatives.

Mooney's initiative aims to prevent the Federal Reserve System (FRS) from conducting CBDC trials without obtaining Congress's consent. He has cited China's pilot program for the digital yuan, expressing concerns that CBDCs could enable comprehensive surveillance of American citizens.

Mooney believes that CBDCs pose a threat to financial freedom and may be leveraged by governments for control and manipulation.

In addition to Mooney's efforts, several US senators have expressed discontentment with CBDCs and have introduced a bill that prohibits the development of a digital currency by the Federal Reserve and the Biden administration. Their contention is that centralized currencies could serve as instruments for monitoring private financial transactions of individuals.

Circle is set to launch on Arbitrum

Circle, the issuer of the USDC stablecoin, has announced its upcoming launch on the Arbitrum platform, effectively making USDC the official version within the Layer 2 ecosystem and replacing the previous liquidity. This development brings several benefits to users, including the elimination of withdrawal delays across the bridge and the facilitation of institutional onboarding and offboarding. The official launch is scheduled for June 8.

Furthermore, Circle plans to implement the Cross-Chain Transfer Protocol into the Layer 2 network following the USDC launch on Arbitrum. This integration will enable swift movement of USDC between Ethereum and other supported chains, allowing users to seamlessly switch between different blockchains within minutes and without encountering withdrawal delays.

In addition to these advancements, Circle has expanded its operations by introducing the Euro Coin stablecoin on the Avalanche network. After initially launching on Ethereum last year, Avalanche becomes the second blockchain to support this asset. This strategic move empowers Circle to provide its services and opportunities across multiple blockchains, expanding its presence and enhancing the accessibility and liquidity of its stablecoins.

Circle divests from US Treasury Bonds

Circle, a New York-based company and the developer of the second-largest stablecoin USDC, has recently decided to sell off all its holdings of US Treasury Bonds from its reserve fund. This decision reflects a growing lack of confidence in the US dollar. The move comes amidst debates between President Joe Biden and the US Congress regarding the nation's increasing debt. As a result, Circle's reserve fund now exclusively consists of cash and overnight repurchase agreements.

The declining global share of the US dollar in international transactions, along with reduced interest from central banks in holding dollar reserves, has had an impact on the US government bond market. The inversion of yields in over 90% of US Treasury bond issuances indicates a potential crisis in the American economy.

China embraces blockchain technology

China continues to actively explore and apply blockchain technology despite its cautious stance on cryptocurrencies. The Ministry of Industry and Information Technology of China recently published a national blockchain technology standard to standardize and foster the development of the blockchain industry within the country. Over a hundred blockchain companies have already adopted this standard, signaling the widespread adoption of new norms and regulations.

Another significant milestone in the blockchain sector's development is the establishment of a national center that brings together universities, developers, and companies specializing in blockchain technologies. This center will conduct research and develop innovative solutions, contributing to further progress and the widespread adoption of blockchain in China. An official document dedicated to various technologies, including blockchain and artificial intelligence, underscores the country's commitment to an open approach to digital assets and aims to establish leadership in this field by 2025. These proactive steps are part of China's strategic plan for technological advancement and strengthening its position in the global economy.

Cryptocurrencies as Securities in the European Union

A research commissioned by the European Parliament has recommended that cryptocurrencies should be treated as securities by default.

As a result, discussions are underway within the European Union regarding the need for additional regulation in the DeFi, staking, and NFT sectors. While this proposal has raised questions and created uncertainty in the crypto sector, the forthcoming MiCA regulation is expected to bring greater clarity and ensure compliance with rules in cross-border transactions. The security of market participants is a top priority, and EU agencies are tasked with developing comprehensive measures in accordance with this legislation.

Summary

The past week has been filled with a plethora of news, making it difficult to categorize them as purely good or bad at this time. The ongoing mass layoffs at Nansen and Binance coincide with new hires, the exact impact of TON changes remains unclear, and regulatory bodies have provided limited specifics. However, the introduction of USDC on Arbitrum is undoubtedly positive news as it enables direct transfers of stablecoins between networks.

With that, we conclude the major news highlights from the past week and look forward to welcoming you in the next edition of PointPay Crypto Digest next week!

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