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THORChain, a protocol facilitating interblockchain settlements, has temporarily halted withdrawals of bitcoin (BTC) and ether (ETH) from its lending and savers programs to mitigate a potential insolvency risk. This decision was made following a proposal by network node operators, who implemented a 90-day pause to devise a strategy for managing the protocol's debts. The pause was enacted in the early hours of Friday in Asia. The lending program at THORChain is limited to BTC and ETH, whereas its saver vaults accommodate a broader range of assets. The risk of insolvency arises from the possibility of all loans and savers positions being closed and repaid at the same time, especially if this coincides with a significant drop in the value of RUNE, THORChain's native token. To manage its lending obligations, THORChain mints and sells RUNE into liquidity pools, a practice that led to the suspension of new deposits a year ago due to growing community concerns over risk. Community members have estimated liabilities close to $200 million, with $107 million in liquidity pools that could be at risk if panic selling occurs. Despite these issues, THORChain's cross-chain swap services continue to operate normally.
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The White House is currently reassessing the terms of the US CHIPS and Science Act, which was designed to enhance domestic semiconductor production with $39 billion in subsidies. The review, influenced by President Trump's executive orders, aims to renegotiate some of the deals, potentially causing delays in funding disbursements. Companies like GlobalWafers, expecting significant grants, are awaiting clarity on how these changes might affect their agreements. The administration's focus includes revising conditions such as the use of unionized labor and childcare provisions, which were part of the original contracts. The Semiconductor Industry Association has expressed readiness to collaborate with the new administration to refine the program's requirements, ensuring that the U.S. maintains its competitive edge in semiconductor technology. Meanwhile, major recipients like Intel, TSMC, Samsung, and SK Hynix, who have significant operations in China, are also under scrutiny for their overseas expansion plans post-receiving CHIPS Act funds.
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China is reportedly planning a significant meeting between its top leaders, including President Xi Jinping, and key figures from the private sector like Alibaba's Jack Ma. This move comes after years of regulatory crackdowns on private enterprises, particularly highlighted by the scuttling of Ant Group's IPO in 2020. The potential meeting, which could happen as soon as next week, is seen as a gesture of support for the private sector, which has been under pressure due to Xi's policies aimed at tightening state control and promoting national security and technological self-sufficiency. The inclusion of entrepreneurs like Jack Ma, who has been less visible since the Ant Group incident, and Liang Wenfeng, whose AI advancements have put China at the forefront of AI technology, suggests a possible shift in policy. This development has already sparked optimism in the market, with Alibaba's shares seeing significant gains. However, the extent to which this meeting will translate into concrete policy changes remains uncertain, especially in the context of China's economic challenges and potential trade tensions.
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The article discusses the impact of President Donald Trump's tariff threats on the US dollar, which has seen a decline due to growing speculation that these tariffs are primarily a negotiating tactic rather than a definitive policy. The Bloomberg Dollar Spot Index has fallen by approximately 2.5% from its February peak, reflecting investor skepticism about the immediacy and severity of the proposed tariffs. This uncertainty has led to a weakening of the dollar against all its Group-of-10 peers, with significant losses against commodity currencies like the Canadian and Australian dollars. Market reactions also include a reduction in bullish bets on the dollar, with options volumes dropping by around 20% this week. Despite some investors still holding onto expectations of a stronger dollar due to the robust US economy, the overall market sentiment leans towards viewing the tariffs as a bluff, potentially leading to a continued decline in the dollar's value if this perception solidifies.