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.
There is often a difference between correlation and causation. Nevertheless, a handful of Swiss politicians identify the correlation between cyberattacks and the resulting occasional Bitcoin ransom demand as the root of the evil. Together with 28 co-signers, Swiss Social Democratic Party (SP) group leader Roger Nordmann is calling for a ban on “anonymous cyber money,” pointing to measures taken by the People’s Republic of China. At first glance, calls for a ban on a technology that is already comprehensively regulated in Switzerland and represents a considerable part of digitalization seem far-fetched. A blind following of China’s example and its motives should also be critically questioned in a direct democracy. In the opinion of the CVJ.CH editorial team, the supporters of the motion not only ignore the potential of blockchain technology but also reveal a shockingly poor understanding of the sector.
The investment firm of well-known hedge fund manager George Soros has confirmed that Bitcoin and other cryptocurrencies have been in the spectrum of its investment universe since 2018. Chief Investment Officer Dawn Fitzpatrick believes that Bitcoin is much more than just an inflation hedge. According to Fitzpatrick, the broader financial industry has slowly but surely begun to recognize the potential of cryptocurrencies and the underlying technology. In the same breath, the firm announced it had shifted a $5 billion equity investment into digital assets back in 2020.
An increasing number of companies are beginning to explore the possibilities of non-fungible tokens (NFTs). This involves exploring potential revenue models and use cases for the emerging fusion of the real and digital worlds. For instance, the video gaming industry is predestined for the use of NFTs, and thus the exploration of potential use cases began early on. The tradability of tokens has even made it in certain parts of the world possible to meet monthly expenses with the proceeds earned by playing crypto-video games. However, other sectors such as the music industry were also shaken up with the emergence of the new technology. Fabian Zbinden gives an overview of current NFT application areas and its disruption potential.
Digital assets now represent a market value of over $2 trillion and count more than 200 million users. According to America’s second largest financial institution, the market is too big to be ignored. The specialized research department, at Bank of America (BofA), highlights in their first report the enormous potential of the technology, which will infiltrate every industry. In addition to the growing importance of stablecoins, the paper addresses the potential of central bank digital currencies (CBDCs) as well as the innovative nature of NFTs and the DeFi space.
In addition: The legislative reform for tokenized securities in Switzerland, which came into force on February 1, was exemplified this week by Credit Suisse. The major Swiss bank is working with Geneva-based blockchain startup Taurus to digitize ownership stakes in an alpine resort in Crans-Montana. In the process, the shares are tokenized through a specially developed token extension on the Ethereum Blockchain which was specifically designed for the tokenization of equities. Ultimately, the tokens can be traded on the first FINMA-approved digital asset marketplace.
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Selected articles in the weekly review:
The number of extortionists demanding cryptocurrencies as ransom increased by 30% last year. Now anonymous cyber money should be banned in Switzerland, demands SP faction leader Roger Nordmann, among others.