Preface

This week brought several notable developments to the Web3 industry, spanning policy and macroeconomic arenas. On the economic front, data from the U.S. showed signs of a mild recovery. The Producer Price Index (PPI) for March declined year-over-year, indicating that the pace of cost increases for producers is slowing down. Meanwhile, retail sales saw a rise, partly due to consumers making purchases in advance to hedge against potential future price hikes. Regarding monetary policy, Federal Reserve Chair Jerome Powell emphasized that policy is still taking shape and its effects on the economy remain highly uncertain. As a result, the Fed is in no rush to adjust interest rates. While the data reflects some degree of economic rebound, easing inflation pressures and uncertain consumer behavior have led the Federal Reserve to remain cautious. The future economic trajectory will hinge on the ongoing interplay between economic indicators and policy decisions.

On the global regulatory front, Panama’s city council has approved a measure that allows government agencies to accept cryptocurrency payments, making it the first in the world to do so. This proactive move may encourage other countries to explore similar policies, potentially accelerating the global adoption of cryptocurrencies. However, the situation in El Salvador, where Bitcoin was first adopted as legal tender, paints a more cautious picture. Only 11% of registered Bitcoin service providers are currently operating, as most have failed to meet the operational standards set by Bitcoin Law. This illustrates the challenges still facing widespread crypto adoption. The gap between supportive policies and actual market readiness will be a key factor in determining whether cryptocurrencies can successfully integrate into the mainstream economy.

Abstract

• April 11 – U.S. March PPI YoY at 2.7%, below expectations of 3.3% and the previous value of 3.2%.
• April 14 – The SEC will launch a “Crypto Regulatory Sandbox” during its second crypto roundtable meeting.
• April 15 – Canada will launch its first spot Solana ETFs this week, enabling staking-based yield generation.
• April 16 – Only 11% of registered Bitcoin companies in El Salvador are currently operational.
• April 17 – Powell issued hawkish remarks, signaling that economic policy remains uncertain; crypto regulation may ease.
• April 17 – Panama permits government agencies to accept cryptocurrency payments.

Key Events

April 11 – U.S. March PPI rose 2.7% year-over-year, below expectations of 3.3% and the previous 3.2%

The U.S. Producer Price Index (PPI) for March showed a monthly decline of 0.4%, marking the largest drop since October 2023. This figure missed the expected 0.2% increase; the previous value was revised from 0.0% to 0.1%. On a year-over-year basis, PPI rose by 2.7%, below the projected 3.3% and the previous 3.2%. These figures suggest that inflationary pressures in the U.S. are easing, with slower growth in producer costs potentially indicating a more moderate trend in future consumer inflation (CPI). As a result, market expectations for a Federal Reserve rate cut later this year have strengthened. U.S. Treasury yields and the dollar index may face downward pressure, while equity markets could benefit from the prospect of a more accommodative monetary policy. However, if PPI continues to weaken, it could also reflect underlying demand-side weakness, raising concerns about the momentum of U.S. economic growth. [1]

April 14 – SEC introduces “crypto regulatory sandbox” during its second crypto roundtable

At the second crypto roundtable, SEC Commissioner Mark Uyeda openly criticized the agency’s current approach to crypto regulation. He pointed out that the SEC relies heavily on enforcement actions rather than providing clear guidelines, leaving crypto businesses to navigate a highly uncertain compliance environment. This, he argued, has stifled innovation without effectively protecting investors.

To address this, the SEC aims to establish a unified federal regulatory framework to replace the fragmented, state-level system currently in place. This would reduce business compliance burdens and introduce a “safe harbor” mechanism to provide early-stage crypto projects with a more defined path to compliance. [2]

Meanwhile, another pro-reform commissioner, Hester Peirce, advocated for a “regulatory sandbox” allowing crypto exchanges to experiment more freely, including potential pilot programs for trading tokenized securities. The SEC has already held two roundtable discussions to gather industry feedback and drive the creation of a more rational and forward-looking regulatory environment. [3]

Introducing a regulatory sandbox could significantly improve the compliance landscape by lowering legal risks and trial costs for crypto firms, thereby encouraging innovation and project development. A unified federal framework with clear policy expectations would enhance market transparency, build investor confidence, and attract traditional institutional players. However, if regulations are too lenient, they could increase investor risk exposure.

April 15 – Canada to launch first spot Solana ETFs with staking feature

Canada is set to launch several spot Solana (SOL) exchange-traded funds (ETFs) on April 16, marking the first such products to allow crypto staking. These ETFs have been approved by the Ontario Securities Commission (OSC), with issuers including asset management firms such as Purpose, Evolve, CI, and 3iQ.

Unlike the U.S., which has a centralized federal regulatory structure, Canada regulates securities at the provincial and territorial levels. The Toronto-based exchange is overseen by the OSC, which noted that the approval was based on rule amendments issued in January 2024. These amendments permit public funds to hold and operate crypto assets, including staking them to earn additional yield.

Although the market reaction to altcoin ETFs has been cautiously optimistic, investor interest remains uncertain. In March, U.S.-based Volatility Shares launched a Solana futures ETF (SOLZ), but by mid-April, its assets under management totaled only around $5 million, indicating limited traction.

Canada’s approval of spot Solana ETFs with built-in staking demonstrates its crypto asset regulation and product innovation leadership. In contrast to the U.S., which still restricts crypto ETFs to futures-based products, Canada’s move expands investment options and offers investors a new income stream. While earlier products like SOLZ have seen muted performance, the staking feature could be a compelling differentiator and may help spark genuine demand for altcoin ETFs. [4]

April 16 – Only 11% of registered Bitcoin companies in El Salvador are currently operational

Out of 181 registered Bitcoin service providers in El Salvador, only 20—approximately 11%—are currently active. Most of these companies have failed to meet the operational standards outlined in Bitcoin Law. This includes the government-backed Chivo Wallet, which is set to be dissolved under an agreement between the Salvadoran government and the International Monetary Fund (IMF). [5]

The Bitcoin Law requires service providers to maintain anti-money laundering (AML) programs, keep accurate records of their financial positions, and implement tailored cybersecurity measures based on the nature of their services. Data shows that 89% of registered firms failed to meet these obligations and were therefore classified as non-operational. Entities such as Chivo Wallet, Crypto Trading & Investment, and Fintech Américas have successfully complied with these standards and continue to operate normally.

El Salvador became the first country to adopt Bitcoin as legal tender in 2021, aiming to drive economic growth and attract cryptocurrency investment. However, the low percentage of operational Bitcoin firms could erode confidence in the country’s crypto ecosystem and dampen investor and business enthusiasm. On March 3, El Salvador signed a $1.4 billion loan agreement with the IMF, which included conditions to scale back some Bitcoin-related initiatives. These measures involve restricting public institutions from using Bitcoin and mandating taxes paid in U.S. dollars. Such policy shifts may further impact Bitcoin’s adoption and market performance in the country.

April 16 – U.S. March retail sales up 1.4%, marking the strongest monthly gain since January 2023

Retail sales in the U.S. rose by 1.4% month-over-month in March, the largest increase since January 2023. This figure significantly exceeded both market expectations and February’s modest 0.2% gain. The surge was driven by strong performance in categories such as automobiles (up 5.3%), building materials (up 3.3%), and food services (up 1.8%).

Despite the impressive numbers, analysts caution that the increase may reflect consumers front-loading purchases due to concerns over future economic uncertainty, rather than signaling sustained economic strength. While the data may temporarily ease fears of an economic slowdown, it also suggests that consumer demand might peak early. This so-called “pulled-forward growth” will be a key concern for the Federal Reserve as it evaluates inflation trends and the sustainability of consumer spending. [6]

April 17 – Powell delivers hawkish remarks as economic policy remains uncertain; crypto regulations may ease

Federal Reserve Chair Jerome Powell stated that the current administration is undertaking major reforms in trade, immigration, fiscal policy, and regulation. Since these policies are still developing, their potential impact on the economy remains highly uncertain. Powell noted that the Fed is in a favorable position to wait for clearer signals before making any monetary policy changes.

Meanwhile, U.S. equity markets came under pressure. The S&P 500 dropped by 2.5%, the Nasdaq fell by 3.4%, and the Dow Jones declined by over 1.67%. Bitcoin also experienced high volatility, spiking before falling back. Amid rising risk aversion, investors shifted toward safe-haven assets, pushing gold prices to a record high of $3,300 per ounce.

Regulatory policies concerning crypto-related banks are expected to loosen to some extent. As cryptocurrencies transition from a fringe innovation to a mainstream financial instrument, this shift is becoming increasingly difficult to ignore. Establishing a legal framework for stablecoins is seen as a promising step, as stablecoins can potentially attract a broader base of investors and users. However, robust consumer protection measures will be essential to ensure market transparency and stability.

Beyond Bitcoin, other major cryptocurrencies, including Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA), also fell by around 4% overnight. The overall crypto market remains under pressure. Market movements are currently driven more by sentiment and narrative than fundamentals, and any unexpected macro or policy event could quickly derail upward momentum. Investors are maintaining a defensive posture, and volatility is expected to remain elevated until the broader macro environment becomes clearer. In the short term, heightened caution will be necessary as markets navigate ongoing uncertainty. [7]

April 17 – Panama becomes the first government entity to accept cryptocurrency payments

Panama City Council has passed a vote to allow government institutions to accept cryptocurrency payments, making it the first public authority in the world to do so. Citizens can now use cryptocurrencies such as Bitcoin, Ethereum, USDC, and USDT to pay for taxes, fines, permits, and other government services.

Previous administrations in Panama had attempted to pass legislation through the Senate to achieve this goal. However, Panamanian law requires all public institutions to receive payments in U.S. dollars, which prevented the bill from moving forward. To overcome this legal hurdle, Panama City partnered with a bank to implement the system without introducing new legislation. The bank will process crypto payments and convert them into U.S. dollars in real-time, ensuring that government entities receive payments in fiat while enabling citizens to transact in crypto.

As a key player in the global crypto space, Panama’s initiative may inspire other governments to experiment with similar policies, potentially accelerating global cryptocurrency adoption. The move also enhances Panama’s position in the digital economy, drawing attention from crypto firms and investors while promoting financial inclusion, especially for those underserved by traditional banking services. However, this also introduces new regulatory challenges. The government must establish a robust legal framework to ensure the security and compliance of crypto transactions. [8]

Summary

This week, the Web3 industry exhibited divergent trends across macroeconomic and regulatory landscapes. In the U.S., economic data sent mixed signals. A slowdown in March’s Producer Price Index (PPI) growth indicated easing inflationary pressure, while a stronger-than-expected surge in retail sales reflected a potential pull-forward in consumer demand driven by uncertainty. The Federal Reserve remains cautious, with Chair Jerome Powell emphasizing the high uncertainty surrounding the impact of evolving policies. Investors and markets await clearer economic signals to gauge the Fed’s next move.

Meanwhile, crypto regulation presented a contrasting picture. Panama emerged as a leader by becoming the first government entity to accept cryptocurrency payments, signaling an open embrace of innovation. On the other hand, El Salvador’s low operational rate among Bitcoin firms underscores the gap between policy ambition and on-the-ground adoption. Canada also made headlines by approving Solana ETFs’ first spot with staking, showcasing a progressive and innovation-friendly regulatory stance.

Overall, the Web3 sector is at a pivotal stage of development. Macroeconomic uncertainty may increase market volatility in the short term. Still, the gradual establishment of regulatory frameworks and the rise of innovative products are laying the groundwork for long-term growth. Panama’s bold move could accelerate mainstream adoption of cryptocurrencies, but the challenges El Salvador face serve as a reminder that sustainable development requires more than just favorable policies. The industry must balance technological innovation, regulatory compliance, and user education to integrate into the global financial system.

References：

1. U.S. Bureau of Labor Statistics,https://www.bls.gov/news.release/ppi.nr0.htm
2. SEC.gov,https://www.sec.gov/newsroom/speeches-statements/uyeda-remarks-ctf-roundtable-crypto-trading-041125
3. Decrypt,https://decrypt.co/314552/sec-crypto-regulatory-sandbox
4. Cointelegraph,https://cointelegraph.com/news/spot-solana-etfs-launch-in-canada-this-week
5. Diario,https://diario.elmundo.sv/economia/el-89-de-proveedores-de-servicios-bitcoin-en-el-salvador-no-operan-segun-banco-central
6. Sockwits,https://stocktwits.com/news-articles/markets/equity/us-retail-sales-rise-in-march/chQP85iRbOr
7. Xnews,https://xnews.jin10.com/details/172397
8. X,https://x.com/Mayer/status/1912247520790737405

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