BB DAILY 12-18-2024: Powell signals slower rate cuts, Deutsche Bank advances blockchain tech, MicroStrategy faces speculation, and Trump-backed WLFI partners with Ethena Labs in crypto move
Fed Chair Powell emphasizes cautious approach to interest rate cuts, Deutsche Bank tackles regulatory blockchain challenges, MicroStrategy investors await potential January blackout, and WLFI strengthens its position in DeFi with Ethena Labs collaboration.
December 18, 2024: Fed Chair Powell stated that the Federal Reserve is proceeding with a slower pace of rate cuts, reflecting expectations of higher inflation in the near term. Inflation has moved significantly closer to the Fed’s 2% target, showing notable progress. However, the housing market remains weak, and wage growth across the United States has eased. Powell emphasized that the labor market is no longer a source of inflationary pressures, which allows the Fed to take a more cautious approach in reducing interest rates. He also reassured that inflation expectations remain “well anchored,” demonstrating confidence in the central bank’s policies.
Deutsche Bank develops Ethereum Layer 2 blockchain to address regulatory risks and enhance transaction efficiency
Germany’s largest bank, Deutsche Bank, is developing an Ethereum Layer 2 blockchain based on ZKsync. The project introduces a trusted verifier mechanism and grants regulators special supervisory authority to mitigate risks associated with interacting with sanctioned entities or criminals. This initiative aims to address the regulatory challenges financial institutions face when using public blockchains, such as ensuring compliance and avoiding inadvertent transactions with prohibited parties.
In November, the bank unveiled a test version of Project Dama 2, an asset-servicing pilot platform. The platform incorporates Layer 2 technology, leveraging public blockchains while enabling cheaper, faster, and more efficient transactions. This innovation reflects Deutsche Bank’s efforts to blend the benefits of blockchain with robust regulatory safeguards.
Rumors of January blackout on MicroStrategy share sales spark investor speculation
A rumor claims MicroStrategy may face a self-imposed blackout period in January 2025, halting share sales and convertible debt issuances used to fund Bitcoin purchases. While the exact cause is unclear, speculation links the restriction to insider trading customs, committee recommendations after the firm’s NASDAQ 100 inclusion, or preparation for its February earnings report. Investors are divided over the rumor’s validity, with some doubting any blackout exists. MicroStrategy has not yet confirmed or clarified the claims.
Trump-backed DeFi project World Liberty Financial partners with Ethena Labs to integrate sUSDe token
World Liberty Financial (WLFI), the decentralized finance platform supported by President-elect Donald Trump, announced a collaboration with Ethena Labs to explore long-term integration, beginning with the use of Ethena’s yield-bearing token, sUSDe. The partnership aims to onboard sUSDe as collateral on WLFI’s Aave protocol instance, leveraging its $1.2 billion in supplied assets and growing popularity. WLFI governance will vote on the proposal this week, with both firms expressing commitment to future collaboration even if the measure is not approved.
The announcement follows WLFI’s recent acquisition of $600,000 in ENA tokens and Justin Sun’s appointment as an advisor, signaling the platform’s growing momentum since Trump’s election victory. WLFI positions itself as a leader in democratizing access to decentralized financial tools while benefiting from Trump’s pro-crypto regulatory stance.
