2023: A Milestone Year for Cryptocurrency Adoption and Regulatory Developments Globally
Summary:
The cryptocurrency industry saw significant developments and global adoption, especially in India, Vietnam, and Thailand, in 2023. With big players like BlackRock and EDX Markets entering the crypto space, the industry gained mainstream acceptance. Regulatory efforts surged with over 40 countries actively refining their crypto laws. In Europe, Spain saw a 56% increase in registered crypto firms. The tokenized real-world asset market showed impressive growth, with notable interest from institutional investors, and trading doors were opened to retail investors in Hong Kong. Meanwhile, Turkey experienced a crypto user influx due to the nation's economic conditions. High-profile financial institutions also launched various blockchain- and crypto-focused projects.
The digital currency sector witnessed an array of substantial events and increased global adoption in 2023, underscoring the field's progressive nature. The year saw significant financial institutions such as BlackRock dipping their toes into crypto waters and new entrants like EDX Markets jumping into the exchange space. Let's look at some of the key happenings of the year.
Asia's warm reception towards digital currencies
As per Chainalysis's 2023 Global Crypto Adoption Index, countries such as India, Vietnam, and Thailand spearheaded the grassroots adoption of cryptocurrencies. These lower-middle-income nations showed a notable interest in the digital asset arena, despite a slump in overall global crypto engagement after the 2022 collapse of crypto exchange FTX. In particular, India, apart from leading grassroots adoption, emerged as the second-largest global market for cryptocurrency transactions by volume. India's unique policy of deducting 1% tax from users' balance during trading exhibited its distinctive approach to managing cryptocurrency transactions.
Cryptocurrency regulations tighten
A notable development was that more than 40 countries were proactively working towards refining crypto regulations, with the efforts divided mainly into four sectors, according to a report by PwC. The focus areas included stablecoin regulation, adherence to the Financial Action Task Force’s Travel Rule, licensing, registration, and overall crafting of a crypto regulatory framework. While countries like Japan, Bahamas, and select EU nations demonstrated comprehensive engagement, others like Uganda, India, and Brazil focused more selectively, showcasing a guarded stance towards the crypto industry.
BlackRock’s crypto foray with dual ETF submissions
In a landmark step, BlackRock, the world's largest asset manager, filed an application in June 2023 with the U.S. Securities and Exchange Commission for a Bitcoin (BTC) exchange-traded fund (ETF). Attempting to increase its approval chances, BlackRock later revised its proposal to allow cash redemptions. In November, it applied for a spot Ether (ETH) ETF, reinforcing its commitment to cryptocurrency investments.
Spanish crypto firms surge by 56%
The number of registered cryptocurrency companies in Spain rose by nearly 56% in 2023. The list on the website of Spain’s central bank showcased that 30 firms received a virtual asset service provider license, which included international platforms such as Revolut, Bitpanda, Crypto.com, and Vivid.
Tokenized real-world assets gain ground with mainstream support
Tokenized real-world assets (RWA) grew impressively in 2023, with the Boston Consulting Group predicting the industry would be worth around $16 trillion by the decade's close. Real estate, U.S. Treasury bills, bonds, and money markets experienced the most volume.
Hong Kong opens crypto trading for retail investors
In August, Hong Kong's Securities and Futures Commission opened the doors for retail investors to participate in digital asset trading and enforced a strict licensing regime to safeguard investors.
Turkey sees crypto user influx amid hyperinflation
Amid the rapid depreciation of the Turkish lira against the U.S. dollar, the number of crypto users in Turkey swelled by 52%. A majority (58%) of Turks preferred crypto investments for long-term wealth accumulation, while 37% considered it as a value store.
The EDX Markets crypto exchange launched with Wall Street backing
EDX Markets, a new entrant in the crypto exchange space, debuted in June 2023, backed by major financial institutions, including Citadel Securities, Fidelity Investments, Charles Schwab, Paradigm, Sequoia Capital, and Virtu Financial.
Debut of Canton Network with solid market backing
A new blockchain network, the Canton Network, debuted in May, aimed at financial institutions and backed by big players including BNP Paribas, Cboe Global Markets, Digital Asset, Paxos, Microsoft, Goldman Sachs, and Deloitte.
German banks kick off crypto custody
Several leading German financial institutions made their entry into the crypto world. For example, Deutsche WertpapierService Bank (Dwpbank) launched its wpNex crypto trading platform, introducing the digital asset industry to 1,200 banks in Germany. Similarly, DZ Bank unveiled its digital asset custody platform designed to serve institutional clients, providing access to crypto securities.
Published At
1/4/2024 4:45:00 PM
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