What has been happening around Blockchain Technology and Cryptocurrencies this week? The most relevant local and international developments as well as appealing background reports in a pointed and compact weekly review.
2021 marked the end of one of the most exciting years for the crypto industry. Digital assets found wider acceptance among institutional investors, ultimately highlighted by the approval of a Bitcoin ETF in the United States. The launch of Bitcoin in El Salvador also marked the first time for the biggest cryptocurrency to gain a place as a nationally promoted payment and store of value medium. The field of decentralized financial applications also saw record growth and, with $250 billion currently deployed, is proving that the field is emerging from its infancy. In addition, the emergence of NFTs has multiplied the scope of the blockchain application landscape. With expanded application areas, users and companies from new business sectors are finding their way into the field. As the metaverse emerges, the horizon opens for an almost limitless number of possibilities in the digital space. Tokens can be used to attach customers to companies and their ecosystems in a entirely new way. The entrance of well-known companies from the sports, entertainment, gaming, and fashion industries confirms this burgeoning trend. The broader spectrum of applications is a key pillar to sustain the rapid user growth in the crypto space. The downside of the fast-growing area was reflected in the limited scalability of the platforms. This is where new interesting scaling options came into play over the past year. Finally, regulation lags behind the fast-growing field. Some milestones had been set in 2021, but comprehensive regulation of the complex area is still a long way off.
At the latest when Facebook changed its name to Meta last fall, the buzzword metaverse became increasingly meaningful. The term is used to describe a digital cosmos in which users can interact with each other in a variety of ways in a computer-generated environment. This week, with electronics giant Samsung, another heavyweight ventured into the field. The Korean company announced the integration of an intuitive and comprehensive NFT platform for new smart TVs. With it, the discovery as well as the purchase and trade of digital artworks will be enabled. In addition, Samsung users will be able to access parts of the blockchain-based game Decentraland.
What stage is crypto innovation and regulation at in the European Union (EU), and how does the region plan to navigate the emerging sector? The world is on the verge of a new era of technological interaction, and regulatory certainty is one of the most important prerequisites for its adoption. The most important regulation for the interplay in the EU crypto market is the upcoming decree on markets for crypto assets (MiCA). According to the EU, MiCA aims to harmonize the European framework for issuing and trading different types of crypto tokens as part of the European Digital Finance Strategy. The directive proposes an overarching legal framework for assets, markets and service providers. None of this is currently regulated at the EU level. The regulation will apply to all member states once it has been adopted across the EU. However, transposition into national law will not be mandatory.
One of Italy’s largest private banks, with $87 billion in assets under management, will offer Bitcoin services to its 300,000 customers in early 2022. Banca Generali’s clientele will soon have direct access to Bitcoin trading via their familiar user environment. Similar plans were already announced by Germany’s Sparkassenverbund in December. The integration of digital assets into the traditional financial system is progressing in remarkable steps.
In addition: The unprecedented crypto interest last year triggered a new wave of companies and investors positioning themselves in the sector. Can the rapid growth continue or even be surpassed in the new year? Swiss digital asset specialist 21Shares looks at the trends to watch out for in 2022 in a comprehensive outlook. In the spotlight are growing constraints on proof-of-work mining-based projects, widespread adoption of Layer 2 solutions, increasing regulatory clarity, further advances in the NFT industry, and the progression of Web3 infrastructure.
Selected articles in the weekly review:
Would you like to receive our weekly review conveniently in your inbox on Saturdays?
We wish insightful reading and a peaceful weekend