7.12 AI Daily Report: The global monetary policy game of Crypto Assets has escalated, with the balance between regulation and innovation becoming the focus.

1. Headline

1. The EU has released AI practice guidelines, with a maximum penalty of 7% of revenue for violators.

On July 11, the European Commission announced the "AI Code of Practice" (General-Purpose AI of Practice) as a transitional mechanism to assist companies in complying with the "AI Act". The code focuses on copyright protection and increasing the transparency of large AI models, which will apply to large generative AI models like ChatGPT and Claude as early as August.

Businesses that violate regulations can be fined up to 7% of their revenue. The guidelines explicitly prohibit the use of pirated content to train AI models. If a creator explicitly indicates that they do not want their work used for AI training, developers must respect this and exclude the relevant content. At the same time, developers are required to publicly disclose key information about the sources of the training data, training methods, and other relevant details to enhance transparency.

The guideline aims to protect the rights of creators and promote the development of AI. Analysts point out that pirated training data has always been a pain point in AI training, and this move helps to standardize the industry. However, there are also views that overly strict regulations may hinder AI innovation, and a balance needs to be sought between protecting rights and promoting development.

2. The U.S. Treasury Department officially cancels the cryptocurrency broker reporting rule.

On July 11, the U.S. Department of the Treasury officially revoked a rule aimed at requiring cryptocurrency brokers to report user transaction records. The rule was initially proposed in 2021, attempting to expand existing tax reporting obligations by requiring all DeFi protocol platforms to report user transaction information, including non-custodial wallet addresses.

The Ministry of Finance stated that after extensive consultation, it has decided to revoke the rule. The cryptocurrency industry welcomes this move, believing that the rule was too stringent and would hinder innovative development. However, some opinions point out that the decentralized nature of cryptocurrencies makes them susceptible to misuse for tax evasion and other illegal activities, necessitating moderate regulation.

Analysts believe that this move reflects the government's balancing act in cryptocurrency regulation. On one hand, there is a need to protect investors' interests, while on the other hand, it is also essential to create a favorable environment for the development of emerging technologies. In the future, more balanced regulatory policies may be introduced.

3. The State-owned Assets Supervision and Administration Commission of Shanghai, China held a study meeting on the development trends of cryptocurrency.

On July 11, the Shanghai State-owned Assets Supervision and Administration Commission held a central group study meeting focusing on the development trends and response strategies of cryptocurrencies and stablecoins. This is seen as a signal for the Chinese government to discuss digital asset regulatory policies.

The meeting discussed the technical characteristics, risks, and impacts of cryptocurrencies on the traditional financial system. Participants believed that cryptocurrencies have features such as decentralization and anonymity, which pose new challenges for regulation, but may also drive innovation in areas such as payment and settlement.

Analysts pointed out that this meeting reflects the Chinese government's emphasis on the development of digital assets. China may formulate more explicit regulatory policies under the existing legal framework to regulate digital asset trading while supporting related technological innovations.

4. The Ethereum Foundation reorganizes its ecological development strategy, focusing on underlying value transmission.

The Ethereum Foundation announced on July 11 the restructuring of the ecosystem development strategy (Ev), aimed at maximizing the number of users using Ethereum and enhancing the resilience of the underlying technology and social infrastructure.

The foundation stated that the Ev team will assist in achieving these goals at the ecosystem or societal level, rather than the technical level. This includes expanding the influence of Ethereum and attracting more developers and users through high-quality content, community management, technical support, and other means.

Analysts believe that this move reflects the Ethereum ecosystem's adaptation to the demands of large-scale applications. Ethereum is no longer just a technical laboratory, but a vast decentralized commercial entity that requires improved social infrastructure to support its development. At the same time, it highlights the challenge of how Ethereum can balance the interests of different participants while maintaining its core values.

5. Cryptocurrency founders call for Ethereum to become the "world reserve asset"

Avi Eisenberg, a well-known figure in the Ethereum ecosystem, recently called for Ethereum to become a "world reserve asset." He believes that Ethereum has the potential to become a global value reserve, capable of replacing traditional reserve assets such as gold.

Eisenberg pointed out that Ethereum has advantages such as anti-inflation and decentralization, which can meet the multiple needs of reserve assets. At the same time, the Ethereum ecosystem is developing rapidly, and applications like DeFi and NFTs are expected to promote its wider acceptance.

However, some analysts are skeptical about this. They believe that Ethereum lacks a value anchor, has high volatility, and is difficult to meet the stability requirements of reserve assets. In addition, the development prospects of Ethereum still have uncertainties.

Regardless, this appeal reflects the desire within the cryptocurrency field to establish its own value position. As regulations become clearer, whether crypto assets like Ethereum can truly attain the status of reserve assets remains to be seen.

2. Industry News

1. Bitcoin hits a new all-time high, breaking the $118,000 mark.

Bitcoin set a new historical record on July 12, breaking through the $118,000 mark. This increase was mainly driven by multiple favorable factors, including expectations of a Federal Reserve interest rate cut, the tax spending bill signed by Trump, and the easing of the global tariff war. As a result, the demand for Bitcoin as a safe-haven asset has significantly increased.

Analysts point out that the current surge in Bitcoin is driven by strong momentum, reflecting a significant influx of funds from institutional investors and a trend of widespread acceptance of Bitcoin. The substantial increase in trading volume and open interest also indicates an optimistic sentiment in the market towards the rise of Bitcoin. However, some analysts also caution about the risks of short-term profit-taking and advise investors to remain cautious.

According to data from CryptoQuant, most Bitcoin holders are still in profit, providing strong support for the market. Whether Bitcoin can continue to push towards the $200,000 mark will depend on changes in the macro environment and the flow of funds.

2. Ethereum breaks through the $3,000 mark, momentum continues to strengthen.

Ethereum broke through the $3,000 mark on July 12, rising more than 8% within 24 hours. This increase was mainly driven by increased institutional demand and record ETF inflows.

Analysts believe that the supply of Ethereum is stabilizing, coupled with growing demand, will provide strong support for price increases. Some analysts predict that Ethereum could rise further to $4,000, with long-term targets potentially reaching around $10,000.

The increase in trading volume and market interest also reflects investors' optimistic sentiment towards Ethereum. However, Ethereum's current price is still 38.6% lower than its historical peak, and future trends remain uncertain.

3. Solana faces selling pressure, analysts warn of downside risks

Despite the overall upward trend in the cryptocurrency market, Solana(SOL) is facing significant selling pressure. Analysts warn that SOL could see a decline of 18%-22%, testing the $130 level.

The main reasons for the decline of SOL include sideways consolidation, the influence of meme coins, trading tensions, and uncertainties surrounding ETF developments. SOL is currently facing resistance at the 50-day moving average, and if it cannot effectively break through, the downside risk will further increase.

However, some analysts believe that the adjustment of SOL is only temporary, and there is still room for growth in the long term. The continuous development of the Solana ecosystem and the ongoing entry of institutional investors will bring new upward momentum to SOL.

4. Altcoins are performing actively, and the rise of Dogecoin has attracted attention.

In the context of Bitcoin and Ethereum leading the charge, the performance of altcoins has also been quite active. Among them, the rise of Dogecoin is particularly noteworthy.

Analyst reports indicate that Dogecoin is showing familiar signals reminiscent of past price surges. The descending wedge pattern formed suggests potential strong gains. The recent price increase and rising interest in futures contracts hint at an intensifying bullish sentiment.

If Dogecoin can maintain its key support level, analysts believe it may lead to the arrival of a new altcoin season. However, some analysts are cautious about the sustainability of altcoins, suggesting that further observation is needed to confirm the trend.

Overall, the cryptocurrency market showed a comprehensive upward trend on July 12, mainly driven by macro positive factors and capital inflows. However, there are also some potential risks and uncertainties, and investors need to maintain a cautiously optimistic mindset.

3. Project News

1. Sui Network: Move ecosystem rising star continues to make strides

Sui Network is a brand new blockchain project created by engineers who were involved in the Diem project. It uses the Move programming language and a new parallel execution engine, aiming to provide high throughput, low latency, and high scalability.

Latest news: Sui Network has attracted significant attention during the TOKEN2049 conference in Singapore. Its founders and community members shared the latest developments of the project, including the upcoming SuiPlay gaming platform and collaboration with South Korea's KBW. In addition, Sui also announced partnerships with Grayscale Trust and USDC to introduce stablecoin support to the ecosystem.

Market Impact: As a rising star project in the Move ecosystem, the development of Sui Network will inject new vitality into the entire Move ecosystem. Its high performance and scalability are expected to attract more developers and projects to join, promoting the prosperity of the Move ecosystem. At the same time, Sui's collaboration with well-known institutions will also enhance its influence in the market.

Industry Feedback: Industry insiders are optimistic about the technical strength and development prospects of Sui Network. Analysts believe that Sui is expected to become another heavyweight public chain project following Ethereum. However, some opinions point out that there are currently fewer tradeable assets for Sui, and more star projects are needed to enhance its influence.

2. Aptos: A new contender in the Move ecosystem created by former Meta engineers.

Aptos is a next-generation blockchain project created by former Meta engineers, also utilizing the Move programming language. It focuses on providing high performance, security, and scalability, aiming to become the next-generation Web infrastructure.

Latest updates: Aptos officially launched its mainnet earlier this year and has recently released several technical updates and new features. These include the launch of the Aptos Wallet and partnerships with institutions like Coinbase. Additionally, Aptos announced that it will introduce more innovative products and services in the coming months.

Market Impact: As a new project in the Move ecosystem, the rise of Aptos will further promote the development of the Move ecosystem. Its high performance and security are expected to attract more enterprises and institutions to join, facilitating the construction of Web infrastructure. At the same time, Aptos's cooperation with well-known institutions will also enhance its influence in the market.

Industry Feedback: Industry insiders are optimistic about Aptos's technical strength and development prospects. Analysts believe that Aptos is expected to become one of the leading projects in the Move ecosystem. However, there are also opinions pointing out that Aptos's development direction is still unclear and that a clearer roadmap is needed to attract users and developers.

3. Movement: Move the invisible champions in the ecosystem

Movement is another highly regarded project within the Move ecosystem. It focuses on providing high performance and scalability, aiming to become the next generation of web infrastructure.

Latest Update: Although Movement has not officially launched its mainnet, it has already attracted a lot of attention. During the TOKEN2049 conference, the Movement team shared the latest progress and future plans of the project with community members.

Market Impact: As an invisible champion within the Move ecosystem, the development of Movement will further enrich the ecosystem of Move. Its high performance and scalability are expected to attract more developers and projects to join, promoting the prosperity of the Move ecosystem. At the same time, the emergence of Movement will also intensify competition within the Move ecosystem.

Industry feedback: Insiders express期待 for Movement's technological strength and development prospects. Analysts believe that Movement is expected to become an important member of the Move ecosystem. However, some opinions point out that Movement currently lacks star projects and application scenarios, and more practical applications are needed to prove its value.

4. Solana ecosystem continues to gain momentum, new projects emerge one after another.

Solana is currently one of the most active public chain ecosystems. During the TOKEN2049 conference, multiple new projects and innovative applications emerged within the Solana ecosystem.

Latest Updates: Dozens of Solana ecosystem projects such as Pyth, Wormhole, and Birdeye launched new products and shared the latest developments at the conference. In addition, Solana held multiple sub-forums and events, attracting a lot of attention.

Market Impact: As one of the leading public chain ecosystems, the continuous efforts of the Solana ecosystem will further promote the development of the entire cryptocurrency industry. The constant emergence of new projects and innovative applications will inject new vitality into the Solana ecosystem, attracting more users and developers to join.

Industry feedback: Insiders are optimistic about the development prospects of the Solana ecosystem. Analysts believe that the prosperity of the Solana ecosystem will drive innovation and development in the entire cryptocurrency industry. However, some viewpoints point out that there are risks of excessive speculation and bubbles within the Solana ecosystem, necessitating the realization of more real application scenarios.

5. AI+Web has become a new hotspot, with innovative applications continuously emerging.

During the TOKEN2049 conference, the combination of AI and the Web became a new hot topic. Multiple projects showcased innovative attempts to apply AI technology in the Web domain.

Latest Updates: Projects such as Gensyn, Hyperbolic, Schelling AI, and Title.xyz showcased the latest advancements in applying AI technology in fields like computation and content generation at the conference. These projects aim to leverage AI technology to enhance the performance and user experience of web applications.

Market Impact: The combination of AI and the Web is expected to give rise to new application scenarios and business models, driving innovation and development across the entire cryptocurrency industry. The introduction of AI technology will enhance the efficiency and intelligence of Web applications, attracting more users to join.

Industry feedback: Industry insiders are optimistic about the prospects of AI+Web. Analysts believe that AI technology will become one of the important driving forces for the development of the Web. However, some opinions point out that most current AI+Web applications are still in the conceptual stage and need more practical applications to emerge.

4. Economic Dynamics

1. The Trump administration once again wields the tariff stick.

Economic Background: The US economy has maintained a strong growth momentum over the past year, with an annualized GDP growth rate of around 3% and an inflation rate staying within the target range of about 2%. The job market continues to improve. However, the latest round of tariff measures by the Trump administration may disrupt this favorable economic landscape.

Important Events: The Trump administration announced that starting from August 1, a 35% tariff will be imposed on certain Canadian imports and a 50% tariff on Brazilian goods. Previously, the U.S. had already imposed a 25% tariff on goods imported from China. This series of tariff measures aims to reduce the U.S. trade deficit, protect domestic industries and jobs, but has also sparked widespread criticism both domestically and internationally.

Market reaction: Investors are concerned that the escalation of the trade war will further exacerbate global economic uncertainty, weaken business and consumer confidence, and thus impact economic growth. The three major US stock indexes fell in response to the news. The US dollar index rose slightly, reflecting an increased demand for safe-haven assets. The International Monetary Fund warned that the global economic growth outlook has worsened further.

Expert Opinion: Harvard University economics professor Robert Barro pointed out that tariff measures may harm the competitiveness of American businesses and ultimately hurt American consumers. He believes that the Trump administration should collaborate with allies to address the issues in the global trading system rather than resorting to unilateral actions.

Goldman Sachs Chief Economist Jan Hatzius stated that while the tariff measures may boost certain industries in the short term, in the long run, they will suppress productivity and economic growth. She urged countries to resolve their differences through dialogue to avoid further escalation of trade wars.

2. The European Central Bank signals a dovish stance, raising concerns about the slowdown in the Eurozone economy.

Economic Background: The Eurozone economy has shown weak growth over the past year, with an annualized GDP growth rate of only 0.4% in the first quarter of 2019. The inflation rate remains persistently below the European Central Bank's target level of 2%, the labor market shows little improvement, and the manufacturing sector is facing downward pressure. These signs have heightened concerns about an economic slowdown.

Important event: European Central Bank President Draghi sent a dovish signal at the latest press conference. He stated that if the economic outlook worsens further, the central bank will be prepared to take action, including restarting the bond purchase program. Draghi also lowered the eurozone's economic growth forecast for this year to 1.1%.

Market Reaction: Draghi's dovish remarks immediately triggered a market reaction. The euro fell nearly 0.5% against the dollar, to around 1.1250. European stock markets generally rose, as loose monetary policy is expected to stimulate the economy. The yield on Germany's 10-year government bonds dropped to -0.35%, setting a new low.

Expert Opinion: Mark Wall, chief eurozone economist at Deutsche Bank, pointed out in a report that Draghi's wording is more dovish than expected, reflecting the central bank's concerns about the economic slowdown. He expects that the European Central Bank will act in September to restart its asset purchase program.

Goldman Sachs believes that the European Central Bank may restart its quantitative easing policy later this year, with a scale that could reach 500 billion euros. The bank expects the eurozone economy to rebound in 2020, but the growth rate will still be below 2%.

In summary, the European Central Bank's stance has shifted to a dovish approach in response to the risks of economic slowdown. However, experts are divided on whether the central bank can successfully turn the situation around, and there are still many uncertainties regarding the economic outlook in the Eurozone.

5. Regulation & Policy

1. The Bank for International Settlements warns that the rapid expansion of stablecoins may threaten monetary sovereignty.

The Bank for International Settlements ( BIS ) has issued a statement warning that the rapid expansion of stablecoins is presenting new policy challenges for financial regulators. As the "bank for central banks" globally, the BIS plays a crucial role in maintaining financial stability.

The report points out that since 2023, the total value of the stablecoin market has doubled to approximately $255 billion, with over 90% concentrated in two types of USD-pegged tokens. The BIS believes that the growth of stablecoins in circulation and their integration with traditional finance may threaten the monetary sovereignty of major markets, necessitating stricter regulatory scrutiny.

Stablecoins lack the basic protection of bank deposits and are highly dependent on the US dollar, which may weaken the effectiveness of existing foreign exchange regulations and make it difficult for law enforcement agencies to freeze involved funds. The BIS calls on national regulators to strengthen the regulation of stablecoins to mitigate potential risks.

Market participants have expressed concerns about this. The development of stablecoins being hindered may affect the growth of the cryptocurrency ecosystem. However, some analysts believe that moderate regulation is beneficial for the long-term healthy development of stablecoins. Overall, there is a divergence of opinion in the market regarding the regulation of stablecoins.

Financial technology expert Hao X stated: "The development of stablecoins needs to run parallel with regulation. A reasonable regulatory framework can not only protect investors' rights but also benefit the application innovation of stablecoins in areas such as payments and settlements."

2. The U.S. Senate passes the "Genius Act," raising concerns in the banking industry.

The "Genius Act" passed by the U.S. Senate is drawing attention from the banking and legal sectors. The bill grants stablecoin holders priority claims over the assets backing them in bankruptcy situations, which could pose risks to traditional banks and other clients.

The "Genius Act" aims to enhance the transparency and compliance of stablecoins. The current version of the bill stipulates that stablecoins must be backed by highly liquid assets ( such as U.S. Treasury bonds ), and issuers must disclose their reserves on a monthly basis and have the ability to freeze tokens. If passed, banks and other entities will be able to issue compliant stablecoins.

The bill is currently awaiting review by the U.S. House of Representatives. Although it aims to enhance user confidence and strengthen the connection between stablecoins and the real financial system, its design regarding bankruptcy handling priorities has also sparked discussions on regulatory logic, financial stability, and potential interbank interest distribution.

Georgetown University law professor Adam Levitin warned that this arrangement essentially "subsidizes the issuance of stablecoins at the expense of bank deposits," which could harm the interests of ordinary bank customers, especially when the issuer of stablecoins or its custodian bank goes bankrupt.

Stablecoin issuers believe that the bill is beneficial for the long-term development of the industry. Circle CEO Jeremy Allaire stated that this will establish a more transparent and robust regulatory framework for stablecoins, enhancing market confidence.

3. The EU abandons its plan to impose a digital tax, easing trade disputes with the United States.

According to reports, the European Commission has abandoned its plan to tax digital companies, marking a significant victory for U.S. President Trump and American tech giants like Apple and Meta, easing the trade dispute between both sides.

Documents show that as trade negotiations between Europe and the United States enter the final sprint stage, Brussels has removed the digital tax option from its seven-year financial plan starting in 2028. This policy shift is a significant change for the European Union.

This sudden turn may be a strategic move by the EU. Currently, the EU is eager to obtain favorable trade terms with the US, while Trump had previously threatened to impose retaliatory tariffs on Canada in response to its digital tax policy.

Analysts believe that the EU's move aims to ease trade disputes with the United States and avoid both sides falling into a tariff war. However, some argue that the EU's abandonment of the digital tax plan may exacerbate the issue of multinational tech companies evading taxes.

European tax expert Pieter Baert stated: "The digital tax was originally intended to ensure that multinational companies pay taxes fairly when operating in the EU market. Now canceling this plan may exacerbate issues of base erosion and profit shifting."

Overall, the EU's decision aims to maintain economic and trade relations with the United States, but it may also bring new challenges.