[News Brief] May 21, morning | Fed minutes show retreat in rate-cut discussion and renewed possibility of additional rate hikes

Discussion of rate cuts in the U.S. Federal Reserve minutes has effectively receded, and the possibility of additional rate hikes has resurfaced.

According to Odaily, the minutes of the U.S. Federal Reserve indicated that discussion of rate cuts has effectively moved to the background, while the possibility of additional rate hikes has re-emerged.

According to a Wall Street Journal analysis, Fed officials focused less on whether to cut rates — the central issue in Federal Open Market Committee debates over the past two years — and more on whether further tightening may be needed if inflation continues to remain above the 2% target.

The minutes stated that “a majority of participants emphasized that, if inflation were to remain stubbornly above 2%, it might become appropriate to tighten policy further.”

The minutes were the record of the final meeting chaired by Fed Chair Jerome Powell and also reflected the impact of Middle East tensions on the outlook for rate decisions. Kevin Warsh is set to lead the Fed after taking the oath of office at the White House on Friday.

The Fed’s next policy meeting is scheduled for June 16–17.

U.S. spot Bitcoin ETFs recorded total net outflows of $70.4655 million on May 20.

According to SoSoValue data cited by the source, U.S. spot Bitcoin ETFs saw total net outflows of $70.4655 million on May 20 (local time). Spot Bitcoin ETFs have now posted net outflows for four consecutive trading days.

The largest net outflow came from BlackRock’s IBIT, which lost $61.4516 million. In contrast, Morgan Stanley’s MSBT recorded net inflows of $1.117 million.

Total net assets of spot Bitcoin ETFs stood at $101.117 billion, and the ratio of ETF net assets to Bitcoin’s market capitalization was 6.49%. Cumulative net inflows were $57.29 billion.

Spot Ethereum ETFs posted net outflows of $28.1395 million on May 20, extending their streak of capital withdrawals to eight consecutive trading days.

Spot Ethereum ETFs recorded net outflows of $28.1395 million on May 20 (U.S. Eastern Time), marking eight straight trading days of outflows.

According to Odaily, citing SoSoValue data, the largest net outflow on the day came from BlackRock’s Ethereum ETF ETHA, with $30.9358 million withdrawn. ETHA’s cumulative net inflows totaled $11.667 billion.

Meanwhile, BlackRock’s ETHB recorded net inflows of $4.3933 million. Total net assets of all spot Ethereum ETFs stood at $12.243 billion, accounting for 4.75% of Ethereum’s market capitalization, while cumulative net inflows were $11.655 billion.

The U.S. Treasury sanctioned members of the Sinaloa Cartel and their associates for allegedly laundering drug proceeds using cryptocurrency.

The U.S. Treasury sanctioned members of the Sinaloa Cartel and their associates over allegations of laundering drug proceeds through cryptocurrency.

Source: PANews and Bloomberg. The Treasury’s Office of Foreign Assets Control (OFAC) said Armando de Jesus Ojeda Aviles and his associates are accused of laundering proceeds from fentanyl, cocaine, and methamphetamine sales back to Mexico.

According to the Treasury, they collected cash through couriers in the United States and then transferred the funds to digital currency addresses. Previously, in April 2024, a federal grand jury in Colorado indicted a related associate on charges of laundering drug proceeds using cryptocurrency.

Hong Kong’s Securities and Futures Commission (SFC) has granted a virtual asset trading platform license to Bixin, a digital asset trading platform under NewBX Limited.

Hong Kong’s Securities and Futures Commission (SFC) has granted a virtual asset trading platform license to Bixin, a digital asset trading platform under NewBX Limited, PANews reported.

Bixin is now authorized to conduct regulated activities including Type 1 dealing in securities and Type 7 automated trading services, and it may operate a virtual asset trading platform in accordance with anti-money laundering and counter-terrorist financing laws.

With this approval, the number of licensed virtual asset trading platform operators in Hong Kong has increased to 13.

Bipartisan U.S. lawmakers have reintroduced the crypto tax reform bill known as the Parity Act.

Bipartisan U.S. lawmakers have reintroduced the crypto tax reform bill known as the Parity Act, according to PANews citing CoinDesk.

The bill stipulates that no gain or loss would be recognized if the cost basis of a regulated payment stablecoin is at least 99% of its redemption value. It also includes provisions clarifying exemptions for broker- or taxpayer-account transactions, digital asset wash-sale rules, and the taxation standard for staking rewards.

If enacted, the bill would require the Internal Revenue Service to review the scope of current taxation on digital asset transactions under $200, as well as the feasibility and potential abuse risks of a de minimis exemption for small transactions. Representative Houchin said the current federal tax code does not adequately reflect the digital asset environment.

Morgan Stanley has filed an amended application related to a Solana ETF (ticker: MSOL).

Morgan Stanley has filed an amended application related to a Solana ETF (ticker: MSOL), PANews reported on the 21st.

Bloomberg ETF analyst James Seyffart shared the update on X, noting that the fee has not yet been disclosed. The filing comes amid continued expectations for the launch of a Solana ETF in the United States.

The U.S. Federal Reserve has proposed a “skinny master account” framework that would allow limited access to the Fed’s payment system for crypto and fintech firms.

The U.S. Federal Reserve has proposed a “skinny master account” framework that would allow crypto and fintech companies limited access to the Fed’s payment network.

According to Wu Blockchain, crypto journalist Eleanor Terrett reported that the Fed has presented a plan under which qualified crypto and fintech firms could use the Fed’s payment system.

A master account is required for financial institutions to access the Fed’s payment system directly. The proposal is being interpreted as a discussion to partially expand access beyond the traditional bank-centered payment network structure.

According to PANews, UK-listed company The Smarter Web Company purchased 19 additional Bitcoin, increasing its total holdings to 2,859 BTC.

According to PANews, UK-listed company The Smarter Web Company purchased 19 more Bitcoin, raising its total holdings to 2,859 BTC.

The company said the purchase is part of its own “10-year plan.” The move comes amid an ongoing trend of companies adding Bitcoin to their treasury assets.

According to PANews, Sui has launched a feature that allows stablecoin transfers without gas fees.

According to PANews, Sui has launched a feature enabling stablecoin transfers without gas fees.

Powered by Fireblocks, the feature will be rolled out gradually on the Sui mainnet, allowing users and businesses to send peer-to-peer stablecoin transfers without holding SUI tokens.

Supported assets include USDsui, SuiUSDe, AUSD, FDUSD, USDB, USDC, and USDY. Sui said the feature could help expand infrastructure for enterprise payments, fintech, and AI agent-based automated payment systems.