Finance

Tech Sector Faces Pressure, Fed Minutes in Focus for Wall Street: Yahoo Finance

Top tech stocks, including Nvidia (NVDA), Palantir (PLTR), and Advanced Micro Devices (AMD), are aiming for gains after a challenging trading session yesterday. The quantum computing sector is also under continued pressure this morning, with companies like Rigetti (RGTI) and IonQ (IONQ) seeing significant losses. Wall Street is focused on the Federal Reserve today, as it prepares to release the minutes from its most recent interest rate meeting at 2 p.m. ET. Trending tickers on Yahoo Finance include Moderna (MRNA), Aurora Innovation (AUR), and Exxon Mobil (XOM).

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TECH

Tech Industry Raises Concerns Over U.S. AI Export Control Framework

The Biden administration’s recently unveiled "Export Control Framework for Artificial Intelligence Diffusion" has ignited intense debate within the tech sector. While the framework aims to address national security risks associated with AI and GPU exports, major vendors such as Oracle, Microsoft, Amazon, and Meta argue that it imposes overly burdensome regulations, hindering innovation and potentially allowing China to take the lead in the market.

Industry experts warn that the framework could have unintended consequences for both the U.S. and the global tech industry.

Charlie Dai, Vice President and Principal Analyst at Forrester, noted, “It not only limits China’s access to cutting-edge technologies, forcing U.S. companies to innovate and develop alternatives, but it also diminishes the global market share of U.S. firms while encouraging China to accelerate its technological progress, which could reshape the global tech landscape and heighten the U.S.-China tech rivalry.”

The framework, created by the Bureau of Industry and Security (BIS) under the U.S. Department of Commerce, introduces stringent licensing requirements for AI technology exports to mitigate national security risks, including the potential for AI to be used in developing weapons of mass destruction or facilitating harmful activities.

A contentious regulatory proposal, the BIS's new Interim Final Rule (IFR) implements broad global export restrictions on AI technologies and GPUs, focusing on preventing misuse in high-risk sectors like weapons development and artificial general intelligence (AGI). However, industry leaders caution that the framework may fail to achieve its intended goals.

The framework introduces a licensing system that limits the number of GPUs U.S. companies can export based on the total computing power deployed in the recipient countries, rather than considering individual use cases or quantities.

CRYPTO

Bitcoin’s $4.6 billion ETF Blockchain for Business and Crypto Market Oversight: This Week in Web3

Innovation in Crypto Markets
While 2022 and 2023 were marked by volatility, the final months of 2024 began signaling a period of recalibration in the crypto space.

Crypto markets are no longer just driven by speculative trading. Instead, they are evolving into sophisticated ecosystems that cater to a range of participants, including institutional investors, retail traders, and DeFi pioneers.

Reports suggest that more than a dozen cryptocurrency-focused exchange-traded funds (ETFs) could launch in 2025, pending approval from the Securities and Exchange Commission (SEC).

Additionally, governments and central banks are expected to increase their purchases of bitcoin this year. A report released on January 7 predicts that nation-states will become some of the next "significant investors" in the world's most popular cryptocurrency.

“We anticipate that more nation-states, central banks, sovereign wealth funds, and government treasuries will seek to establish strategic positions in bitcoin,” the report stated.

E-Trade, the online brokerage arm of Morgan Stanley, is reportedly exploring the addition of cryptocurrency trading, potentially positioning it as one of the largest mainstream financial firms to offer such services. The move is driven by expectations that the regulatory landscape will become more crypto-friendly under President-elect Donald Trump, according to a January 2 report.

Searching for Regulatory Clarity
Trump’s victory in the November election sparked a rally in crypto markets, as he is seen as a more crypto-friendly candidate, in stark contrast to the Biden administration’s efforts to tighten regulations following several high-profile scandals.

During his campaign, Trump vowed to turn the U.S. into the “crypto capital of the planet,” and according to the nonprofit industry group Stand With Crypto, 250 "pro-crypto" members of Congress and 16 "pro-crypto" senators were elected in 2024.

As the new administration takes office, three key areas will be closely watched: the potential establishment of a national bitcoin reserve, clarity on whether the SEC or the Commodity Futures Trading Commission (CFTC) has jurisdiction over various parts of the industry, and regulatory certainty around stablecoins, particularly their issuance.

Ripple CEO Brad Garlinghouse commented this week, “We signed more U.S. deals in the last six weeks of 2024 than the previous six months… Say what you want, but the ‘Trump effect’ is already making crypto great again — through his campaign and Day 1 priorities in the administration.”

For Ripple, the shift in regulatory tone is especially significant after years of regulatory uncertainty caused by the SEC’s actions, which had stalled the company’s domestic growth.

At the same time, the possibility of a more crypto-friendly environment has reignited discussions about the relationship between traditional financial institutions and the growing crypto-fintech ecosystem.

The crypto sector has long argued that it has been denied access to U.S. banking services. However, recent revelations from regulator letters have cast doubt on the claims of widespread “debanking,” which had been previously alleged by U.S. crypto exchanges like Coinbase.

Blockchain in Business
The future of blockchain and cryptocurrency may go beyond speculation and become an essential part of the global economy. However, for this to happen, blockchain technologies need to gain broader adoption in business settings.

Ripple has announced its adoption of the Chainlink standard to enhance the accuracy of pricing data for its Ripple USD (RLUSD) stablecoin, as of January 7. This follows a year of notable growth for stablecoins, which gained traction and attracted attention from financial services companies exploring blockchain.

No longer confined to blockchain enthusiasts or tech startups, crypto and blockchain solutions are becoming integral tools for businesses, especially within the treasury space. To navigate this evolving landscape, finance professionals must familiarize themselves with the specialized terminology shaping payments innovations.

Mastering terms like stablecoin sandwiches, zero-knowledge proofs, atomic swaps, and on-chain liquidity will be crucial for financial leaders looking to integrate these technologies into their payment systems.