8.9 AI Daily Fluctuation in the crypto market intensifies, divergent regulatory attitudes trigger longer competition.

1. Headline

1. US employment data crash triggers Bitcoin plunge, "black swan" warning sounds.

The July employment report data fell far short of expectations, triggering rare market fluctuations. Bitcoin plunged more than 5% in the short term, with capital flows and policy expectations sharply at odds. Analysts warn that this may be a precursor to a historic "black swan" event for Bitcoin.

In July, the U.S. non-farm payrolls increased by only 187,000, far below the expected 292,000. Worse still, the data for June and May were also significantly revised down. A weak job market typically indicates an economic slowdown, but this time is different from the past. A declining labor force participation rate and rising wages are intensifying inflationary pressures, putting the Federal Reserve in a dilemma.

Bitcoin, as a risky asset, is extremely sensitive to macroeconomic data. The collapse of employment data has triggered investor concerns about an economic recession, exacerbating the sell-off of Bitcoin. Analysts believe that if the Federal Reserve has to continue raising interest rates to curb inflation, it will further suppress risky assets. Conversely, if the Federal Reserve is forced to slow down the pace of interest rate hikes, it could trigger worsening inflation. In either case, it will pose a heavy blow to Bitcoin.

Industry insiders are calling for close attention to the Federal Reserve's policy direction. Once the economic fundamentals further deteriorate, Bitcoin may face a prolonged bear market, and investors should remain highly vigilant.

2. New regulations from Hong Kong require stablecoin issuers to undergo comprehensive scrutiny.

The Hong Kong Monetary Authority announced that the "Stablecoin Ordinance" and related regulatory framework will officially take effect on August 1. All stablecoin projects issued or active in Hong Kong must undergo comprehensive review to ensure compliance with anti-money laundering and counter-terrorism financing requirements.

According to the new regulations, stablecoin issuers must submit detailed business plans, operational models, reserve management information, and accept on-site inspections. Issuers must also disclose the identities of key personnel to ensure they have good reputations and professional qualifications. In addition, the reserve assets of stablecoins must be fully monitored by an independent custodian.

Analysis indicates that the new regulations in Hong Kong are viewed as the strictest stablecoin regulatory measures globally. They aim to regulate the stablecoin market and maintain financial stability, but may also intensify industry reshuffling. Some smaller projects may be forced to exit due to an inability to bear compliance costs.

However, industry insiders believe that strict regulation is beneficial for the long-term healthy development of stablecoins. It will increase market transparency, enhance investor confidence, and promote the application of stablecoins in areas such as payment and settlement. For leading projects with strong compliance, the new regulations may clear obstacles and help them further expand their market share.

3. YouTube fraud case exposed, using AI-generated content to defraud $900,000 in cryptocurrency.

Recently, a meticulously designed scam operation has swept through the crypto community, utilizing fake Ethereum trading robot tutorials and AI-generated content on YouTube, resulting in over $900,000 in crypto assets being stolen.

The cybersecurity company SentinelLABS revealed that these scammers target users eager to learn about automated trading robots by disguising their traps as educational videos, causing innocent investors to suffer heavy losses. They use AI to generate realistic video content and embed malicious code in the videos to entice victims to download Trojan programs. Once infected, the scammers can remotely control the user's device and steal the private keys of cryptocurrency wallets.

Analysts point out that this case reflects the risks of misuse of AI technology in the field of crime. Although AI can improve work efficiency, it is also exploited by criminals to create more sophisticated phishing scams. Experts urge the cryptocurrency community to raise security awareness, be wary of unknown software or tutorials, and never easily disclose private keys.

At the same time, video platforms like YouTube also need to strengthen their review processes, promptly delete suspicious content, and block the channels used by criminals. Only with a balance of technology and regulation can we curb the spread of AI scams and maintain the healthy development of the crypto ecosystem.

4. Large net inflows into Ethereum spot ETFs in a single day, investors are optimistic about the long-term prospects of ETH.

Data shows that on August 8, the total net inflow of Ethereum spot ETFs reached $461 million in a single day, reflecting investors' optimistic expectations for the long-term prospects of ETH.

Among them, BlackRock ETF ETHA had a net inflow of $255 million in a single day, while Fidelity ETF FETH saw a net inflow of $132 million in the same period. The historical total net inflows for the two ETFs currently stand at $9.848 billion and $2.375 billion, respectively.

Analysts say that the significant inflow of funds into spot ETFs indicates that institutional investors are increasing their long-term allocation to ETH. Compared to futures ETFs, spot ETFs can directly track the price trends of physical assets and are more favored by institutions.

The main reasons investors are optimistic about the prospects of ETH are: first, Ethereum, as a leading smart contract platform, has vast development potential in emerging fields such as DeFi and NFTs; second, Ethereum is about to transition from proof of work to proof of stake, which is expected to significantly improve energy efficiency and scalability.

However, some analysts have raised doubts about the valuation of ETH. They believe that Ethereum faces fierce competition from other public chains, and its dominant position may be shaken in the future. In addition, regulatory risks and the potential for network attacks could put certain pressure on ETH.

Overall, institutional funds remain optimistic about ETH, but investors should still carefully assess risks and maintain a moderate position allocation.

5. The number of tokens on the Sui blockchain is scarce, and the ecological construction faces challenges.

Although the Sui ecosystem has received much attention, the increasing scarcity of its on-chain tokens may hinder the pace of ecosystem development.

Currently, the main tokens on the Sui chain include only a few projects such as Cetus, Navi, and Scallop, and even with the inclusion of Meme coins, they can hardly be counted on one hand. In stark contrast, Sui set up the largest gaming booth at the KBW conference in South Korea, demonstrating a strong emphasis on ecological development.

Analysts point out that the scarcity of token quantity reflects that the Sui ecosystem is still in its infancy. On one hand, there is a lack of killer applications leading the way; on the other hand, there is also a shortage of sufficient funding support and talent investment. If the progress of ecological construction is slow, it may affect Sui's position in the competition among public chains.

However, Sui is working hard to improve the current situation. It is reported that the incubation plan launched by Sui has already started to incubate new projects, which are expected to inject new ecological power in the near future. In addition, the launch of Grayscale Trust and Native USDC on Sui will also inject new vitality into Sui.

Overall, the Sui ecosystem is still in its early stages, and its development prospects remain to be tested over time. However, if it can attract more quality projects and secure sufficient funding, Sui may become a strong competitor to public chains like Ethereum in the future.

2. Industry News

1. Ethereum breaks through the $4000 barrier, and options market data suggests that the upward momentum may continue to $4400.

The price of Ethereum broke the $4000 mark on August 9, reaching a new high. This breakthrough is due to the market's optimistic expectations for the Ethereum merger upgrade and the continued bullish momentum from institutional investors increasing their positions in ETH.

According to derivatives market data, market makers have shown a significant accumulation of negative Gamma in the strike price range of $4000 to $4400. Gamma is an important metric for options traders, measuring the sensitivity of options to changes in the price of the underlying asset. When market makers are in a negative Gamma state, they are forced to buy the underlying asset when prices rise and sell when prices fall, which often amplifies one-sided market volatility.

Amberdata's Director of Derivatives, Greg Magadini, stated: "If market momentum is strong enough to break through the $4000 level, we will see market makers becoming net buyers of Ethereum at higher price levels, potentially leading to a rapid price increase to $4400, which is the next important Gamma inventory level." This makes $4400 a reasonable target for the current uptrend.

However, analysts also warn that the price is approaching a high-density supply zone, making it extremely sensitive to news in the short term, which could easily lead to a false breakout or a rapid pullback. If the breakout fails and drops below $4100, the risk of a correction will significantly increase. Investors are advised to strictly control their positions and avoid chasing highs or blindly entering the market due to news sentiment.

2. Bitcoin is oscillating in the range of 116,000 USD, with increasing divergence between bulls and bears causing market volatility.

The price of Bitcoin fluctuated between $116,000 and $117,000 on August 9. Despite limited price movement, the divergence between bulls and bears in the market intensified, resulting in a significant increase in trading volume and volatility.

On one hand, long-term bullish investors and institutions remain optimistic about Bitcoin's long-term prospects. They believe that Bitcoin, as a new asset class and store of value, will benefit from the outflow of funds from traditional markets. Especially in the context of rising inflation and geopolitical risks, Bitcoin's defensive and decentralized advantages will be highlighted.

On the other hand, some investors have doubts about whether Bitcoin can break through its existing range in the short term. They point out that Bitcoin's current trading volume and network activity are relatively sluggish, lacking sufficient momentum. At the same time, regulatory and geopolitical risks may also put pressure on the price.

Analysts indicate that Bitcoin may maintain a range-bound volatility pattern in the short term. Only significant positive or negative news could potentially trigger a decisive breakthrough in the market. Investors need to closely monitor changes in the fundamentals and technical aspects, and cautiously manage risks.

3. Altcoins are rising, with VELO, MAGIC and others leading in gains.

On August 9, after the price of Ethereum broke through $4000, the altcoin market experienced a general surge. Among them, VELO rose by 22.86% in 24 hours, MAGIC increased by 19.47%, and W went up by 13.97%.

Analysts point out that the surge of altcoins is primarily driven by the momentum effect of Ethereum. As the second largest cryptocurrency, Ethereum's price trend has an important leading role in the entire market. When Ethereum rises, it often leads to a follow-up increase in other alternative coins.

However, some analysts are cautious about the rise of altcoins. They believe that altcoins lack practical application scenarios and long-term value support, and their price fluctuations are more driven by speculative sentiment. Once market sentiment changes, altcoins may experience severe corrections.

Overall, investors need to have a sufficient understanding of the high risks associated with altcoins. When engaging in speculation, one should strictly control risk exposure, take profits in a timely manner, and avoid being harmed by market fluctuations.

4. Whale addresses continue to accumulate Ethereum, institutions remain optimistic about the long-term prospects of ETH.

On-chain data shows that in the past month, multiple unknown whale or institutional addresses have cumulatively increased their holdings by over 1.035 million Ethereum through exchanges and institutional platforms, worth approximately $4.167 billion.

Meanwhile, the price of Ethereum has risen from $2600 to $4000 over the past month, an increase of 45%. Analysts believe that the continued buying by whales and institutional investors is a significant force driving the rise in ETH prices.

The optimism of institutions towards Ethereum mainly stems from their confidence in its long-term development prospects. As a leading smart contract platform, Ethereum plays a significant role in emerging application fields such as DeFi and NFTs. In the future, with the further development of the ecosystem, the practical value of Ethereum is expected to continue to rise.

In addition, the upcoming "Merge" upgrade of Ethereum is highly anticipated. After the upgrade, Ethereum will transition from a proof-of-work to a proof-of-stake mechanism, significantly reducing energy consumption, which is beneficial for enhancing its environmental friendliness and sustainability.

However, some analysts have warned about the high valuation of Ethereum. They believe that Ethereum faces fierce competition from other smart contract platforms, and its dominant position may be challenged in the future. Investors need to carefully assess the risks and rationally allocate their assets.

5. The Trump family's crypto empire comes to light, with WLFI token planning to raise $1.5 billion.

The World Liberty Financial company, invested by the Trump family, plans to establish a publicly listed company to hold its WLFI tokens. The company intends to raise $1.5 billion for cryptocurrency and mining investments.

This news has attracted widespread attention in the market. On one hand, Trump, as a former U.S. president, has family business activities that often carry a certain political influence. On the other hand, this is also seen as a signal that traditional financial institutions and political families are formally entering the cryptocurrency space.

Analysts believe that the Trump family's cryptocurrency layout could bring more funding and regulatory attention to the field. Once the WLFI token is listed, it will attract more institutional funds, which will help promote the development of the cryptocurrency market.

However, some people have questioned the motivations and operating methods of the Trump family. They are concerned that this may just be a hype tactic aimed at exploiting Trump's influence for profit. Investors need to remain sufficiently vigilant about this.

Overall, the Trump family's cryptocurrency layout will become a focal point of attention in the future market. Its development process and impact remain to be further observed.

6. Linea releases product roadmap, focusing on performance, compatibility, and capital efficiency

The Ethereum Layer 2 scaling solution Linea recently released its product roadmap for the next 9 months, focusing on performance improvement, Ethereum compatibility, and capital efficiency in three areas.

In terms of performance, Linea plans to achieve a processing capacity of 0.5gGas per second on Ethereum before the second quarter of 2026, equivalent to 5000 transactions. In terms of compatibility, Linea will ensure full compatibility with Ethereum, follow Ethereum's fork upgrades, and contribute to the ETH economy through a destruction mechanism, aiming to achieve Type-1 zkEVM in the first quarter of 2026.

In addition, Linea will launch the Native Yield feature starting from the fourth quarter of 2025, making it the best investment destination for ETH capital, offering substantial risk-adjusted returns.

Analysts believe that Linea's roadmap addresses the three major pain points of Ethereum's scalability, promising to bring comprehensive performance improvements to Ethereum. As a leading second-layer scaling solution, Linea's development will directly impact the future of the Ethereum ecosystem.

However, some have questioned whether Linea can achieve its goals as planned. Ethereum scaling is a daunting system engineering task that requires solving many technical challenges. Linea needs to maintain its innovative vitality and closely collaborate with the Ethereum community to ultimately achieve its objectives.

Overall, the development of Linea is worth the market's continued attention. Its success or failure will largely determine whether Ethereum can successfully scale and maintain its leading position.

7. New EU regulations give banks a regulatory advantage for tokenized assets, potentially accelerating the development of tokenization in Europe.

The final technical standards recently released by the European Banking Authority grant EU banks regulatory advantages in handling tokenized assets. These standards follow the guidelines of the Basel Committee on Banking Supervision but take a more open approach to tokenized traditional assets.

According to the new regulations, EU banks can process tokenized securities on any type of blockchain without additional capital requirements. In contrast, banks in other regions face a risk weight of up to 1250% for holding similar assets on unlicensed networks.

This regulatory difference also extends to the stablecoin sector, giving Europe a unique advantage in institutional tokenization and the digitization of traditional financial instruments.

Analysts believe that the new regulations from the EU will create a favorable environment for the development of tokenization in Europe. Traditional financial institutions, such as banks, will be more motivated to engage in tokenization business after receiving regulatory support, promoting the development of related markets.

However, there are also controversies surrounding the new regulations. They are concerned that overly lenient regulations may bring systemic risks and exacerbate the vulnerability of the financial system. At the same time, the new regulations may also intensify regulatory differences between the EU and other regions in the field of tokenization, affecting the overall

3. Project News

1. WORLD3 released a demo video showcasing how AI entities achieve full automation.

The WORLD3 native AI intelligent agent platform recently released a 4-minute demo video, showcasing how its "persistent expert intelligent agents" can fully automate the experience. The video demonstrates the "agent collaboration workflow", where users only need to present a concept, and multiple AI intelligent agents can take turns completing all tasks such as writing white papers, generating code, deploying websites, and promoting on social media.

The "Persistent Expert Agent" of WORLD3 is built on the cloud-native WORLD VM architecture, capable of executing complex on-chain tasks 24/7, truly understanding and responding to on-chain realities. This agent can not only deploy automatic mining game agents with one click for beginners but also customize and execute cross-chain asset management strategies for professional investors.

The project demonstrates the deep integration of AI and blockchain technology, promising to bring a brand new user experience. Through automated processes, WORLD3 lowers the development threshold of applications, allowing ordinary users to easily get started. At the same time, its personalized intelligent agent services are expected to promote the diversified development of the ecosystem.

Industry analysts believe that WORLD3 has opened up new pathways for AI empowerment. Automated processes not only improve efficiency but also help attract more users to the world. However, some analysts also remind that the safety and controllability of AI technology remain key issues that need to be focused on.

2. Ark of Panda launches ecosystem partner recruitment to co-build an innovation center.

The cross-chain asset tokenization platform Ark of Panda recently announced the launch of an ecological partner recruitment program, aiming to jointly build an innovation center. The platform is built on BNB Chain and is dedicated to connecting Web2 and the world, allowing users to tokenize real-world assets and brands into tradable digital assets.

Ark of Panda will utilize precise traffic and user engagement to support and incubate high-quality projects. The collaboration plan covers various areas including daily task promotion, multi-token integration, AI personalized services, and virtual asset trading, providing partners with exposure opportunities, shared user traffic, and AI-UGC technical support to help them gain a competitive advantage in the field.

The platform supports AI-driven UGC tools for creating personalized 3D assets, enhancing user loyalty through community profit sharing, and rewarding contributors through an on-chain task system, thereby promoting the sustainable development of a collaborative economy. Currently, Ark of Panda has partnered with over 20 projects and cross-border e-commerce enterprises, marking the initial achievements of its ecological development.

Analysts believe that Ark of Panda has injected new vitality into the ecosystem. By integrating Web2 and its advantages, the platform is expected to attract more traditional users into the world. However, some analysts also remind us that the regulatory policies regarding tokenized assets still have uncertainties, which may affect the platform's long-term development.

3. The immersive translation plugin has paused the bilingual webpage sharing function to prevent privacy risks.

The well-known translation plugin "Immersive Translation" officially announced recently that it has decided to temporarily take down the bilingual webpage sharing feature to avoid potential privacy risks. This feature allowed users to generate externally accessible links to share translated bilingual webpages.

The announcement states that recently, a small number of users inadvertently shared pages that may contain personal information while using this feature and did not delete them in time. To prevent privacy leakage, the official decision is to suspend this feature, which will be reinstated only after a comprehensive privacy protection mechanism is established.

It is worth noting that this incident did not involve any translation content or the leakage of backend user data. A publicly accessible link is only generated when users actively use the bilingual webpage sharing feature, which poses a risk of privacy leakage.

Analysts say that this move reflects the high importance placed on user privacy by "immersive translation." In the current online environment, the issue of user privacy protection is attracting increasing attention. As a well-known translation tool, taking proactive preventive measures is beneficial for winning users' long-term trust.

However, some analysts point out that while pausing the functionality can reduce risks, it may also affect user experience. "Immersive translation" needs to seek a balance between privacy protection and convenience to remain competitive.

4. Sui ecological development shows initial signs of dawn, Move system projects attract industry attention

The Sui blockchain ecosystem, built on the new Move virtual machine, has developed rapidly recently, attracting widespread attention in the industry. As a representative public chain project of the Move language, Sui has gained recognition from industry insiders for its technical strength and documentation quality.

The Sui ecosystem has currently birthed star projects such as Cetus and Navi, and has established the largest game booth at the KBW conference in South Korea. In addition, the Sui Foundation has also launched an incubation program, which is expected to give rise to more innovative applications.

At the same time, the launch of the stablecoin USDC and Grayscale trust products in the Sui ecosystem has injected new momentum into its development. Analysts believe this will help attract more funds into the Sui ecosystem, promoting its healthy growth.

However, the number of token assets available for trading in the Sui ecosystem is still relatively small, which may somewhat limit its development potential. The industry hopes that the Sui Foundation can take further action in ecosystem construction to provide investors with more investment targets.

The Move-based public chain projects Aptos and Movement, which are on par with Sui, have also garnered significant attention. Among them, Aptos has launched its mainnet and issued tokens, but the community is waiting for further clarification on its development direction; Movement, on the other hand, is the only project in the Move ecosystem that has not yet issued tokens, making its future performance worth looking forward to.

Overall, the rise of the Move language ecosystem has brought new vitality to the blockchain world. Its innovative technical architecture and strong performance are expected to elevate the industry's development to a new level. However, issues such as ecosystem construction and token economic models still need further improvement.

4. Economic Dynamics

1. The divergence among Federal Reserve officials has intensified, and the outlook for inflation expectations is unclear.

Economic background: The U.S. economy showed moderate growth in the first half of 2023, with the annualized quarter-on-quarter GDP growth in the second quarter at 2.4%, slightly higher than the 1.8% in the first quarter. However, inflation remains high, with the core PCE price index rising 4.8% year-on-year in June, well above the Federal Reserve's target level of 2%. The unemployment rate hovers around 3.6%, and the job market remains tight.

Important Events: The Federal Reserve raised interest rates by 25 basis points as scheduled at the end of July, raising the target range for the federal funds rate to 5.25%-5.5%. However, in the latest round of monetary policy meeting minutes, officials expressed significant differences regarding the economic outlook and inflation expectations. Some officials believe that further rate hikes are necessary to control inflation, while others are concerned that excessive tightening could lead to an economic hard landing.

Market response: Investors are divided over the Federal Reserve's next move, leading to increased volatility in financial markets. The three major U.S. stock indices showed divergence at the close on August 9, with the Dow Jones down 0.35% and the Nasdaq up 0.67%. The dollar index edged up, hovering around 103.5. The yield curve for bonds further inverted, indicating an increased risk of economic recession.

Expert analysis: Goldman Sachs chief economist Jan Hatzius stated that the Federal Reserve may need to raise interest rates to a range of 5.5%-5.75% to effectively curb inflation. However, he also warned that excessive rate hikes could lead to a hard landing for the economy. On the other hand, former Federal Reserve Chairman Ben Bernanke believes that the Federal Reserve should pause rate hikes and patiently wait for the effects of previous rate increases to fully transmit to the real economy.

2. China's exports unexpectedly rebounded in July, and the trade surplus expanded.

Economic background: The Chinese economy showed signs of weakness in the first half of 2023, with GDP growth in the second quarter only at 0.8% year-on-year, marking a new low since quarterly data began in 1992. Exports continued to decline against the backdrop of weak global demand, falling by 12.4% year-on-year in June, marking the third consecutive month of negative growth.

Important events: Data released by the General Administration of Customs of China on August 7 shows that exports in July increased by 18.1% year-on-year, significantly higher than the market expectation of 12.5%. Imports fell by 7.9% year-on-year, and the trade surplus expanded to 802 billion yuan, the highest level since September 2022.

Market Response: The export data rebounded beyond expectations, boosting market confidence in the outlook for the Chinese economy. On August 9, the Shanghai Composite Index rose by 0.76%, and the ChiNext Index increased by 1.06%. The central parity rate of the RMB against the US dollar was reported at 7.2335, an increase of 122 points compared to the previous trading day.

Expert Opinion: Zong Jun, chief economist of China Galaxy Securities, stated that the rebound in exports in July was mainly influenced by base effects and one-off factors, and does not mean that the export situation has fundamentally changed. He expects that exports will continue to face pressure in the second half of the year, and the trade surplus may narrow. Fu Linghui, spokesperson for the National Bureau of Statistics, also pointed out that the current economy faces many difficulties such as demand contraction and weakening expectations, and keeping the economy operating within a reasonable range requires greater efforts.

5. Regulation & Policy

1. Ukraine will conduct a preliminary review of the cryptocurrency regulation bill at the end of August.

Danylo Hetmantsev, the chairman of the Ukrainian Parliament's Finance, Taxation and Customs Policy Committee, stated that the Ukrainian Parliament plans to conduct a preliminary review of the cryptocurrency regulatory bill by the end of August. The bill aims to establish a legal framework for digital assets that aligns with European standards.

The main contents of the bill include: imposing a 5% personal income tax and a 5% military tax on cryptocurrency transactions, allowing individuals to legalize their acquired digital assets, and proposing to include Bitcoin in the national reserve assets. Notably, Ukraine currently holds 46,351 Bitcoins, worth approximately $5.4 billion, making it the fourth largest government holder of Bitcoin globally. The country legalized cryptocurrency exchanges in 2022 through a bill, and this legislation will further enhance the regulatory framework for digital assets.

The Ukrainian government is advancing cryptocurrency regulatory legislation aimed at providing legal status and regulatory protection for digital assets, while also creating conditions for government taxation. Industry insiders believe that the bill is beneficial for attracting cryptocurrency companies to establish operations in Ukraine, promoting the local crypto economy's development. However, some analysts are concerned that excessively high tax rates may hinder industry growth.

2. The Hong Kong "Stablecoin Regulation" has come into effect, but some exchange shops still exchange USDT "without a license".

The Hong Kong "Stablecoin Regulation" will take effect on August 1, 2025, prohibiting institutions without five types of licenses from providing stablecoin trading services, leading several exchange shops to suspend related businesses or close down, although some shops can still trade privately.

The Hong Kong Monetary Authority reminds to be cautious of counterfeit stablecoin pamphlets, stating that a pamphlet using the Hong Kong Monetary Authority's logo has recently circulated in the market, which involves the sale of stablecoins. The Monetary Authority emphasizes that this pamphlet is not officially released and urges the public not to be misled.

The Hong Kong Securities and Futures Commission stated that the "Stablecoin Regulation" aims to establish an effective regulatory framework for stablecoin activities, maintaining financial stability and protecting investors' interests. However, industry insiders are concerned that excessive regulation may hinder Hong Kong's development as a cryptocurrency hub. Some analysts believe that Hong Kong should seek a balance between regulation and development to avoid overly restricting industry innovation.

3. The new EU regulations give banks an advantage in the regulation of tokenized assets.

This week, the European Banking Authority released the final technical standards, largely following the guidelines of the Basel Committee on Banking Supervision and primarily applicable to cryptocurrencies. However, EU legislation overturned the conservative approach on tokenized traditional assets, explicitly treating them equally to traditional assets without any additional conditions.

EU banks can handle tokenized securities on any type of blockchain without additional capital requirements; however, banks in other regions that follow Basel Committee guidelines are subject to a maximum risk weight of 1250% when holding similar assets on unlicensed networks. This regulatory difference also extends to the stablecoin sector, giving Europe a unique advantage in institutional tokenization and the digitization of traditional financial instruments.

Industry insiders believe that the EU's new regulations facilitate banks' participation in tokenized assets, which is beneficial for promoting the application of blockchain technology in traditional finance. However, some analysts are concerned that overly lenient regulations may pose risks. Overall, the EU's new regulations are seen as an important advancement in the regulation of cryptocurrencies in Europe.