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Top Stories of the Week - 12/8

Weekly Top Stories 12/8 - Galaxy Research

This week in the newsletter, we again push back on unfortunate comments from Jamie Dimon, CEO of America’s largest bank. We also write about SocGen’s new crypto activities, and the launch of Helium’s nationwide cellphone plan.

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Jamie Dimon Wants the Government to “Close Down” Bitcoin

CEOs of America’s largest banks gathered in Washington on Wednesday for an annual hearing on oversight of Wall Street firms, during which JPMorgan Chase CEO Jamie Dimon said about crypto, “If I were the government, I’d close it down.” The hearing was held by the Committee on Banking, Housing, and Urban Affairs and featured the CEOs of Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs, BNY Mellon, Morgan Stanley, and State Street.

Dimon’s comments came during Senator Elizabeth Warren’s Q&A portion of the hearing. Warren used her time to ask the CEOs for their views on cryptocurrencies and how to regulate them. Specifically, Warren raised crypto’s use in illicit financing. Citing a Chainalysis report, Warren point to estimates of $20 billion in illegal activity over the course of 2022 and called for stricter AML/KYC regulation on par with the standards for America’s largest banks. Warren asked each CEO present whether, “crypto companies facilitating financial transactions should have to follow the same anti-money-laundering rules that your bank has to follow?” Every CEO replied yes, with Dimon adding, “I’ve always been deeply opposed to bitcoin, crypto, etc…If I were the government, I would close it down.” 

Dimon has been a vocal critic of crypto over the past decade, calling them, “decentralized ponzis,” arguing bitcoin has “no intrinsic value,” and as early as 2017 even threatening to fire employees who bought bitcoin. At times, however, he has said blockchain technologies have “real value.” JPMorgan Chase has its own permissioned blockchain solution Onyx which recently partnered with Apollo Global to pilot tokenized portfolios. 


Appearing on CNBC earlier this week, Galaxy CEO Mike Novogratz said, “he [Jamie] keeps doubling down and being wrong.” Dimon continues to ignore the fact that individuals and institutions around the world are not just interested in blockchain, but crypto as well. In January, Dimon said that BlackRock was only interested in “blockchain technology,” not bitcoin. These comments directly contrast with those made by Larry Fink, BlackRock’s CEO, who as recently as October said, “we are hearing from clients around the world about the need for crypto,” and “I believe crypto will play that type of role as a flight to quality.”

As we’ve pointed out in the past, BNY Mellon, Fidelity, Franklin Templeton, and many others are also actively implementing crypto custody and/or brokerage services recognizing the growth potential for natively-digital crypto assets. In addition to its permissioned Onyx project, JPMorgan itself has hundreds of employees working on digital assets, and not just non-crypto ones. And Dimon’s own “formerly smart daughter,” (as he referred to her) has been a bitcoin owner in the past. A Galaxy Research report published this week on the great wealth transfer highlights that fact that Millenials and Gen Z have a higher preference for crypto and are due to inherit the largest wealth transfer in history over the coming decades.

Dimon appears to think he knows best – or perhaps he is adhering to the philosophy of: why work with the competition when you can ask the government to shut them out? During the hearing on Wednesday he told lawmakers that new Basel End Game regulations are too onerous and also recommended privatizing the Federal Deposit Insurance Corporation (FDIC). And now he thinks he also has the authority to tell them to “shut down” crypto. He is comfortable lobbying and suggesting that governments take actions, while simultaneously arguing that onerous regulations will affect people. What people really want are free and fair access to safe markets and products, which include crypto. Perhaps JPMorgan should look internally first; after all, the bank has racked up nearly $30 billion in fines since 2000.

We should also point out that, to Sen. Warren’s question about whether “crypto companies facilitating financial transactions should have to follow the same anti-money-laundering rules that your bank has to follow,” – as it relates to AML/KYC, American “crypto companies” already do. Crypto exchanges, custodians, and payments firms in the United States do perform AML/KYC on their customers – not because they are regulated like banks, who must follow the Bank Secrecy Act (which also requires AML/KYC), but because they are currently regulated like money transmitters, who also must perform AML/KYC, file Suspicious Activity Reports (SAR) with FinCEN, and comply with OFAC sanctions. Perhaps Sen. Warren is referring to decentralized applications, and not “crypto companies?” There is certainly an interesting policy debate to be had about the capability of decentralized applications to perform centralized compliance functions – but it doesn’t appear that’s what Sen. Warren is referring to.

Crypto is a direct threat to Dimon's business and he wants the government to restrict its use in capital markets. This approach is destined to fail. China, which has a much more authoritarian government than ours, already tried to ban Bitcoin and that effort has clearly failed. Dimon should listen to more constructive voices that recognize there is a need for regulations that promote innovation and that can harness crypto’s benefits while managing its risks. Senator Bill Hagerty tweeted on Thursday, “I can understand why large banks are opposed to cryptocurrencies – the technology has the potential to disrupt much of the traditional banking model.  This is not a fight for DC to pick sides on. We need to regulate with a light touch that doesn’t kill innovation in the US.” We agree. – Lucas Tcheyan

France’s Third Largest Bank Launches a Stablecoin

On Wednesday, the crypto-focused subsidiary of French bank Société Générale (SocGen), SocGen Forge, launched a euro-backed stablecoin called EUR CoinVertible (EURCV). EURCV is issued on the Ethereum blockchain and listed for trading on Luxembourg-based cryptocurrency exchange Bitstamp. Jean-Baptiste Graftieaux, CEO of Bitstamp, said in a press release about the launch of EURCV, “As the first EUR stablecoin to be issued by a fully regulated subsidiary of a global bank, this is an exciting moment for our industry as we move towards our mission of mainstream adoption of crypto. Stablecoins bridge the gap between traditional fiat currencies and cryptocurrencies – offering the best of both worlds due to their stability and on-chain feature set – whilst also supporting our goal of increased financial inclusion.”

Earlier this month, SocGen Forge issued the first blockchain-based “green” bond on Ethereum. Structured as an unsecured bond with a maturity of 3 years, the bond, which has raised €10 million ($11 million) from institutional investors AXA Investment Managers and Generali Investments, will be used to finance environmentally sustainable projects and activities. AXA made their investment in the bond by acquiring and spending 5m EURCV. SocGen Forge is not the only major European bank to issue blockchain-based bonds in recent months. In November, the European Investment Bank (EIB) launched their second euro-denominated bond in partnership with Goldman Sachs Bank Europe, Santander, and SocGen on Goldman Sachs’ private tokenization platform.

As stated on the Bitstamp website, deposits and withdrawals of EURCV is limited for the time being to investors whitelisted by SocGen Forge. SocGen Forge has appointed crypto market maker Flowdesk as the liquidity provider on Bitstamp for EURCV-EUR and EURCV-USDT pairs. Over 90% of stablecoins issued on Ethereum are dollar-backed. The total supply of euro-backed stablecoins on Ethereum has increased slightly, 4%, year-to-date. The most popular euro-backed stablecoin, EURT, is issued by Tether.


Though issued on a public blockchain, EURCV does not inherit many benefits from being issued on Ethereum, as opposed to a private blockchain. Issuance of the stablecoin is restricted to whitelisted parties, as is the transfer of the tokens on-chain. Conversions of EURCV into euro is subject to case-by-case approval from SocGen Forge. There is little to no automation of processes or approvals via smart contracts, self-executing code and logic, as almost all on-chain actions related to EURCV must first be explicitly approved via a transaction initiated from SocGen Forge’s externally owned account (EOA).

socgen flow chart

Caption: Summary of EURCV buy back process with SocGen Forge.

Source: SocGen Forge, EURCV Whitepaper

The restrictive design of EURCV is not surprising given SocGen Forge’s motivation to offer this product to institutions in a regulatory compliant manner. Several new rules regarding the issuance and transfer of stablecoins in the EU will take effect in 2024 as part of the official roll out of the Market in Cryptoassets (MiCA) bill and EURCV was designed with this in mind. Jean-Marc Stenger, CEO of SocGen Forge, told the Financial Times, “Very few stablecoins are compliant with MiCA.” To be clear, MiCA does not specifically require that stablecoin issuers prohibit the secondary transfers between non-whitelisted addresses, and taking this action will certainly limit the adoption of any stablecoin. Despite the conservative and restrictive nature of EURCV, it nonetheless is a sign of progress and adoption for blockchain technology by institutions.

It is also no surprise that the first stablecoin to be launched by a major bank came from a non-U.S. bank. Europe has an increasingly clear and comprehensive regulatory framework for crypto. This stands in sharp contrast to the lack of regulatory clarity in the U.S. as well as the very clear but highly restrictive approach that banking regulators have taken with banks in the U.S. In 2023, multiple banks servicing cryptocurrency businesses were forced to shut down or dramatically reduce their interactions with the crypto industry. The Federal Reserve issued guidance in February that member banks would be presumptively prohibited from holding crypto assets as principal. And several other actions, including joint guidance from the Fed, OCC, and FDIC in January, the SEC’s wrongheaded SAB 121, updated examination priorities, and aggressive examination scrutiny following March’s banking crisis have effectively banned U.S. banks from touching crypto directly. While an increasingly negative outlook from U.S. regulators on crypto activity dissuades U.S. banks from innovating with crypto assets and public blockchains, major banks in other parts of the world like SocGen Forge are blazing ahead and forging new paths forward for crypto adoption with the proactive help and support of regulators. - Christine Kim

Decentralized Cellular Plans for All

Helium Mobile rolls out $20/month phone plan nationwide. After several years of developing the Helium Network, Nova Labs, the primary team behind Helium, is now offering a nationwide $20/month unlimited data, talk and text phone plan through its mobile carrier Helium Mobile.

As background, the Helium Network is a decentralized wireless network powered by individuals that operate Helium hotspots, who in return, receive a portion of network fees from the network's data usage. The Helium Mobile phone plan was first offered only in Miami as the pilot launch region for $5/month in August 2022. In September 2022, Nova Labs signed a 5-year agreement with T-Mobile to provide dual coverage for reliable coverage for its subscribers - in areas where T-Mobile's signal is weak (i.e., dead zones) or when the network is congested, users could seamlessly roam onto Helium Network for better 5G coverage or vice versa. In April 2023, the Helium Network completed its migration to Solana after the approval of governance proposal HIP-70. The primary network tokens include HNT (the main ecosystem token that accrues revenue from network data usage through the burning of 'data credits') and MOBILE (a reward token for installing mobile hotspots and for sharing location data about coverage quality).

According to the press release, the $20/month phone plan is "almost 8x more affordable than the average U.S. cell bill." Interested subscribers can bring their own devices (including the Solana Saga phone) to benefit from the dual 5G coverage provided by T-Mobile and Helium hotspots. In addition to the $20 unlimited phone plan, individuals interested in operating a hotspot for the network to earn rewards by providing network coverage can now purchase specialty Helium Mobile hotspots for $249 and $499 for indoor and outdoor coverage, respectively.


After many years, Helium’s vision of disrupting the telecom industry is starting to come together with the nationwide rollout of its mobile plan, suggesting the initial pilot program in Miami was a success. Helium is among the more innovative and ambitious projects in crypto - it has facilitated the build out of capex-intensive 5G infrastructure via crowdsourcing investments by using token incentives. The Helium Network now has ~11k Mobile Hotspots and nearly 1m IOT Hotspots around the world.

Building out the supply-side of the Helium Network is a daunting task on its own, but the next step of growing the demand-side is arguably an even bigger challenge. Through significant marketing and BD efforts, Nova Labs scored a major win with its 5-year agreement with T-Mobile in September last year and should find an easier path going forward with the support of the third largest telco provider in the US. So far, a total of 7.3k Helium Mobile Subscriber NFTs have been minted on-chain, and a large portion of these subs have also activated discovery mapping to earn MOBILE token rewards to help offset their bills. However, the value of Data Credit usage (which are paid for by burning HNT tokens at a fixed USD rate of $0.00001 per DC) from mobile and IoT applications over the past 7 days has averaged less than $250 daily, suggesting greater network utilization is required to become more sustainable.

Still, the Helium Mobile phone plan only just began its nationwide rollout and the $20/month price point is an attractive offering relative to other options (at least here in the US). The Helium Network should also attract more interest with the development of the broader DePIN (decentralized physical infrastructure) market on Solana, which includes other ambitious projects including the Saga phone and Hivemapper. Look out TradWi (traditional wireless) but there's a new mobile provider in town! – Charles Yu

Charts of the Week

Bitcoin fees have reached year to date (YTD) highs using the 30-day moving average on sustained inscription activity. Raw mean transaction fees reached $28 on December 6. The 30-day moving average reached $11 on December 7.

Bitcoin Average Transaction Fees - Chart

There have been more than 1.43m new inscriptions across all types over the 7-day period ending December 7. December 3 marked the second most active day for inscriptions all time, with 483k inscriptions being created. The vast majority of inscriptions continue to be text based. 94.17% of all new inscriptions over the last 7 days have been text, 3.3% were images, 2.51% application, and the rest were audio, video, model and other.

Bitcoin Daily Inscription Counts by Type - Chart

Other News

  • ORDI is the first BRC-20 token to top $1bn market cap

  • Sotheby's begins first Bitcoin Ordinals NFT auction for BitcoinShrooms

  • Bitcoin dev Luke Dashjr calls inscriptions 'spam,' community members push back

  • Crypto-friendly Rep. Patrick McHenry won't be seeking re-election

  • TON blockchain slows to a halt as Ordinals-inspired protocol sees surge in activity

  • Coinbase rolls out money transfers via links sent on WhatsApp, TikTok and Instagram

  • Do Kwon will be extradited to US by Montenegro Justice Minister: WSJ

  • SEC delays decision on Grayscale's proposed spot ether ETF into the new year