JPMorgan: Fed loans will provide $2 trillion of liquidity; Ethereum’s Shapella update expected to hit on April 12; The bank crisis upset Circle’s plans.
Ethereum’s Shapella update expected to hit on April 12
Ethereum developers have identified April 12 as the potential date for the long-awaited Shapella (Shanghain-Capella) update.
With the upcoming update, it is aimed to reactivate staking withdrawals. This feature, covered under Ethereum Improvement Proposal (EIP) 4895, was temporarily disabled during the Ethereum network’s transition from proof-of-work algorithm to proof-of-stake in September.
Countdown continues for Shapella
As The Block reports, Ethereum developers have planned various improvements with the update aimed at optimizing gas fees, as well as re-enabling withdrawals.
Since February, the developers have experimented on several testnets, mainly in Sepolia, Zhejiang and Goerli. The Shapella update was released on the Goerli testnet, the final test before the instant network launch on Tuesday. Successful results were obtained from the update on the Sepoila, Zhejiang and Goerli testnets.
However, the largest US crypto exchange Coinbase thinks there will be a great demand after the update. The exchange stated that staking requests will be queued and processed.
JPMorgan: Fed loans will provide $2 trillion of liquidity
Global banking giants, especially the USA, have been alarmed in recent days, so to speak. When this is the case, JPMorgan Chase, who made critical statements on many issues, said that the Federal Reserve’s (Fed) emergency loan program could inject up to $2 trillion in funds into the US banking system and reduce the liquidity crunch.
Statements continue to come from the regulators, who took action upon the increasing voices of this crisis in the market.
Fed loans will provide $2 trillion of liquidity, according to JPMorgan
Before the recent banking crises, JPMorgan Chase’s strategists said that although the US banking system still had $3 trillion in reserves, a significant portion of it was held by the largest banks.
However, the central bank announced this week that it will collectively report the use of the program each week when releasing the Fed’s balance sheet data.
Finally, the 2 trillion liquidity that the Fed will provide can positively affect the cryptocurrency market. Whenever America prints money, we see that some are invested in cryptocurrencies.
The bank crisis upset Circle’s plans.
The current crisis plaguing US banks seems to have foiled stablecoin issuer Circle’s plans for now.
Circle plans to keep all its reserves in global banks to support USDC, after Silicon Valley Bank was unable to reach $3.3 billion in assets after its closure.
As it will be remembered, the cut off of Circle’s access to its $3.3 billion fund caused USDC to decline to $0.88 by losing its dollar constant.
Circle CEO Jeremy Allaire said in an interview with Bloomberg News:
“We will now have to rely more heavily on global banks, which have a structural basis and a slightly different profile.”
Circle’s sharp change of plans highlights the magnitude of the woes in the digital asset industry.
Allaire stated that the cash assets held for USDC reserves are now with the Bank of New York Mellon Corp. Circle’s cash reserves make up about 20% of all assets that support USDC. This ratio represents approximately $9.7 billion in assets.
Circle burned $3 billion in USDC to get USDC back to the dollar peg after the SVB closed.
Other companies, such as Circle, have similarly turned to global asset custodians. The vast majority of US banks have been seeing more inflows than usual in recent days. JPMorgan, one of the country’s largest banks, is receiving billions of dollars in new funding.