Crypto

Safeguarding the cryptocurrency ecosystem

Published

1 year ago

April 14, 2023

Safeguarding the cryptocurrency ecosystem

Labelled the crypto winter, the cryptocurrency market went via a rollercoaster experience final 12 months. In 2021, driving on the crypto frenzy wave, the poster boy of the crypto trade, Bitcoin, soared to an all-time excessive of US$65,000 in November 2021, however then plummeted to a low of US$15,869 one 12 months later.

The November 2022 collapse of cryptocurrency trade FTX made an additional dent within the crypto trade, exposing the vulnerability in coping with cryptocurrencies and fascinating with digital asset exchanges (DAXs).

Learn extra: How one can lose a bitcoin fortune

The irony is that FTX wasn’t a small participant within the crypto market, and was standard amongst traders, enterprise capitalists, politicians, and even within the regulatory house.

Its collapse despatched a robust sign to crypto fanatics – if FTX can collapse, all different DAXs may very well be susceptible.

In actual fact, FTX was the 11thth in a sequence of 2022 crypto shakeouts, and it’s continued to occur, with the March 2023 collapse of Miami and New York’s crypto Citycoins.

This can additional dent the boldness of crypto fanatics and innovators, inflicting extra DAXs to lose prospects and the belief they constructed over years.

On the constructive facet, the collapses have once more woken the regulators, and higher regulation is now underway.

The European Central Financial institution (ECB) and Federal Reserve regulators lengthy broadcasted the significance of robust laws for the crypto market.

ECB famous that crypto belongings comprise solely about 1% of the entire world monetary asset, which remains to be greater than sub-prime mortgages. But when left unregulated, they’ll wreak havoc and probably result in monetary stability dangers.

To keep away from that, the ECB has finalised laws, Regulation of Markets in Crypto-Property (MiCA), which is anticipated to return into impact in 2024, and can harmonise the regulatory method throughout the European Union (EU).

The Federal Reserve Board additionally warned member banks that it intends to ban cryptocurrency banking exercise to keep away from banks being uncovered to crypto threat.

Regulators usually are not right here to stifle crypto innovation, however fairly to allow them to develop in a protected ecosystem. In actual fact, the Federal Reserve Board’s Vice-President, Michael Barr, famous that digital belongings specialists are wanted to “assist us be taught from new developments and ensure we’re updated on innovation on this sector”.

Regulators are taking prudent measures to keep away from crypto threat being transmitted to a bigger a part of the economic system. As an illustration, the Federal Reserve Board warned member banks that it intends to ban a big portion of cryptocurrency banking exercise presumptively.

The FRB prohibits member banks from holding most crypto belongings. Banks that need to use greenback tokens should show sure safety measures and obtain formal approval earlier than their use in banking transactions.

In the UK, NatWest and different giant UK banks have imposed limits on how a lot cash can move to and from crypto exchanges.

Crypto laws could be ambiguous

The Securities and Alternate Fee (SEC) has put main crypto trade Coinbase on discover for breaking securities legal guidelines. Coinbase was as soon as authorized by the identical SEC to go public in 2021, having deeply reviewed its operation.

Sadly, we haven’t seen unified crypto laws emerge within the 13 years of its existence.

The problem is to impose regulatory requirements on the character of crypto whereas making a protected setting for crypto-lovers.

However regulators have to be cautious to not implement excessive options that discourage innovation, akin to digital forex or tokens. Extra restrictions on banks coping with cryptocurrency means it will likely be tough for the DAXs to maintain prospects’ crypto holdings protected.

Whereas at one finish we need to make the crypto economic system sound, vibrant and protected, tighter laws are additionally making crypto gamers transfer from a regulated system to offshore places, the place keeping track of crypto funding shall be a problem.

Learn extra: Australia is investigating a digital forex, or e-dollar, however its advantages appear slight

The million-dollar query is what is going to occur to the crypto trade subsequent.

This would be the 12 months of reset and regulation of the crypto trade. Regulators should make a unified and coordinated effort to safeguard the crypto ecosystem.

Little question, crypto is right here to remain, however with elevated regulation it will likely be much less risky, much less speculative, and extra enticing in its place monetary asset.

Regulation will preserve the FTX saga from occurring once more. There shall be additional innovation within the token market ,and extra give attention to stablecoins than cryptocurrencies. To not overlook, the hype surrounding the Central Financial institution Digital Foreign money (CBDC) is an offshoot of crypto know-how.

DAXs will come beneath extra scrutiny, prompting folks to carry their investments for longer and bringing value stability to the market.

I anticipate Bitcoin to commerce within the vary of US$25-30k.

A number of weeks in the past, my prediction was half that, however as a result of current banking turmoils, many traders and speculators can be eager to put money into crypto, giving a much-needed sustained lifeline to the trade.

Exact and progressive regulation will polish the trade extra and pave the way in which for crypto spring. The crypto gamers want to enhance transparency, construct belief, scale back or take away unhealthy actors, and implement strong threat administration practices at crypto exchanges so traders and regulators really feel protected in regards to the crypto economic system.

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Crypto

Opinion | How crypto can help restore Hong Kong’s financial glory

Published

4 hours ago

June 1, 2024

Press Room

Opinion | How crypto can help restore Hong Kong’s financial glory

For those unfamiliar with cryptocurrency, this is a major milestone in Asia and across the world as it opens the road for adoption and investment in cryptocurrency, moving the asset class from niche to mainstream. Although the US allowed spot bitcoin ETFs in January, it only recently approved applications to list spot ether ETFs; a second round of approvals will be needed before the products can begin trading. The US’ decision on ether ETFs came a month after Hong Kong became one of the first in the world to approve them.

Hong Kong’s first-mover advantage could attract a new wave of fintech activity and talent to the region, leveraging its forward-thinking regulatory framework. These steps have promoted the city as a global digital asset hub.

Hong Kong already has plans to maintain its advantage over the US by looking at strategic ways to keep developing as a cryptocurrency hub. It could do this by approving advanced financial products before the US does. For example, Hong Kong could allow yield-earning options such as ether ETF staking.

Prices of cryptocurrencies against the US dollar are displayed on a screen in Hong Kong on February 29. Photo: Bloomberg

Staking involves locking cryptocurrency tokens to a blockchain network for a set period of time to earn rewards, a practice that the US might be slower to approve. Hong Kong taking a progressive stance would not just be a regulatory success but an indirect endorsement of the potential of decentralised finance. This momentum could draw fintech investment to the region.

Encouraging foreign direct investment is crucial to Hong Kong’s economic recovery. A key move in this direction is the decision by Hong Kong’s Securities and Futures Commission to allow the tokenisation of securities and regulated funds. This means that traditional financial assets, like stocks and bonds, can now be represented digitally, making them easier to trade and manage. This approach has already attracted serious investment, with Bank of China International Holdings issuing about US$28 million worth of these digital securities.

Hong Kong is also becoming one of the main destinations for major cryptocurrency conferences, which are drawing foreign investment from venture capitalists into local cryptocurrency start-ups. In 2023, the Web3 Festival attracted a crowd of 50,000 attendees, including many investors from around the world. These events, which some have referred to as “cryptocurrency tourism”, bring high earners to Hong Kong, who boost the local economy through their spending and investment.

Overall, Hong Kong is showing the world that cryptocurrency can be regulated reasonably while maintaining an innovative environment. This is likely to impact Hong Kong’s wider financial position. Such regulatory clarity is likely to attract more start-ups and established companies, especially if cryptocurrency start-ups move from the US looking for a friendlier climate to support their growth and innovation.

Additionally, this regulated environment reassures global investors which could enhance Hong Kong’s reputation as a secure and innovative financial hub, boosting investment and job creation in related fields, and driving further economic growth.

Developing the cryptocurrency sector could help alleviate Hong Kong’s talent shortages. Nearly three-quarters of employers in Hong Kong are experiencing talent shortages, exacerbated by a 1.6 per cent population drop by mid-2022. Hong Kong’s ageing population, with 30 per cent expected to be aged 65 and above by 2040, could further intensify this issue.

Hong Kong government efforts, including the Top Talent Pass Scheme, altogether attracted 90,000 skilled workers to the city in 2023. However, continuous efforts to make Hong Kong a hub for cryptocurrency innovation, an industry primarily led by young people, could help reverse the brain drain that the city is experiencing.

Hong Kong’s rise as Asia’s cryptocurrency hub, while not guaranteed, is well-supported by its progressive regulatory environment. Challenges such as red tape in other jurisdictions and talent shortages persist, yet the dynamic cryptocurrency sector could attract and retain talent. The recent US decision on ether ETFs highlights the widening adoption of cryptocurrency assets, making it even more important for Hong Kong to stay competitive.

As global institutions seek clarity and innovation, Hong Kong stands out as an ideal location to set up shop. With its strategic initiatives, Hong Kong is poised to take the lead in the evolution of the finance industry, attracting both companies and professionals to the city.

Danny Chong is CEO and co-founder of Tranchess, a decentralised yield-enhancing asset tracking and management protocol

Crypto

The SEC ruling on Ethereum ETFs could mark a historic shift in crypto investing

Published

12 hours ago

June 1, 2024

Press Room

The SEC ruling on Ethereum ETFs could mark a historic shift in crypto investing

VanEck CEO Jan van Eck sees a major sentiment shift underway in the cryptocurrency market linked to the U.S. Securities and Exchange Commission’s approval of a rule change allowing for Ethereum exchange-traded funds.

“This is really one of the most amazing things that I’ve seen in my career with respect to securities regulation,” van Eck told CNBC’s “ETF Edge” this week.

VanEck was the first to apply to the SEC for permission to list its proposed Ethereum ETF. With that first hurdle cleared, VanEck can begin the process of bringing the product to market, though the exact timeline is unclear.

“There was a real risk that the SEC was going to lose any kind of jurisdiction over digital assets. So the first reaction was to get the ETF, Ethereum ETF approval green lighted,” he said. “But I think there’s a bigger narrative going on as well.”

To van Eck, the buzz around Ethereum this May means clearer regulation on the horizon and an increased investor interest in crypto. In a statement on its website, his company said that “the evidence clearly shows that ETH is a decentralized commodity, not a security.”

Van Eck said the Financial Innovation and Technology for the 21st Century Act, or FIT21, passing in the House on May 8 was another major step toward regulatory clarity for cryptocurrencies, even though he is doubtful it will make it to the Senate before the election.

Ether spiked on the SEC’s approval of applications to list Ethereum ETFs on May 23, but is virtually flat since then.

Disclaimer

Crypto

Fueled By Craze For Nvidia, South Korean Crypto Traders Embrace Risky AI-Linked Tokens By Benzinga

Published

19 hours ago

June 1, 2024

Press Room

Fueled By Craze For Nvidia, South Korean Crypto Traders Embrace Risky AI-Linked Tokens By Benzinga

Benzinga – South Korean traders are showing a growing interest in digital assets linked to artificial intelligence (AI.) This surge in interest has seen the country’s share of global trading volumes for Nvidia Corp.’s AI-linked tokens rise to 18.7% in May from a mere 0.6% in mid-2023.

What Happened: The AI tokens are typically issued by early-stage projects that aim to use blockchain technology for AI services, reported Bloomberg on Friday.

Despite the unproven utility of this combination, South Koreans are showing a strong affinity for both AI and crypto.

Approximately 10% of the South Korean population is exposed to tokens, with the majority of local trading being in volatile smaller coins, rather than the more established Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH).

Notably, Nvidia and Microsoft Corp. are the second and third most popular overseas stocks among domestic investors in South Korea this year, according to Korea Securities Depository figures.

Nvidia’s chips are integral to AI computer processing, while Microsoft is a key supporter of OpenAI and its ChatGPT tool.

See Also: ‘Dogecoin Killer’ Shiba Inu’s Burn Rate Spikes Nearly 250% As Whales Show Interest In The Memecoin

The weekly trading volumes for AI tokens have averaged $8 billion since February, a significant increase from the all-time low of $300 million in mid-2023.

However, there are concerns about the sustainability of the interest in AI-linked crypto projects, given the digital-asset sector’s history of booms and busts in coins tied to popular memes or social trends.

Why It Matters: South Korea has been a significant player in the global crypto market for some time now. As of September 2023, South Korean citizens had declared over $98 billion in foreign digital assets, leading to the country being dubbed a “crypto nation.”

The growing interest in AI-linked crypto projects is not surprising, given South Korea’s strong tech industry and the country’s ongoing fascination with cryptocurrencies.

This trend also reflects the global enthusiasm for AI and its potential applications in various sectors, driving investors to explore AI-related opportunities in the crypto space.

Meanwhile, top AI-based cryptocurrency tokens tumbled last week after AI chip giant Nvidia Corp. reported higher-than-expected earnings for the first quarter. Render, the token made gains ahead of the earnings announcement, was trading 3.79% lower. Render is know for the “most significant” ties with the tech giant

Read Next: ‘Dogecoin Killer’ Shiba Inu Spikes 5%: Trader Sees ‘SHIB Season’ And This Data Point Could Mean He’s Right

Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

Photo courtesy: Shutterstock

Read the original article on Benzinga