21Shares Report Analyzes Global Crypto Landscape Amid Regulatory Changes
Summary:
21Shares' 11th "State of Crypto" report highlights upcoming regulatory changes and their impact on the global crypto landscape. The report points out increased jurisdictional competition to attract industry talent and establish crypto hubs, particularly concerning the U.S. and the European Union. It also highlights potential risks that could shake the lead of these regions in the crypto industry, including the EU's Data Act that could discourage blockchain developers. The document additionally observes the UK and Hong Kong as thriving environments for industry innovation.
21Shares, the company offering services related to crypto exchange-traded products (ETPs), recently published their "State of Crypto" report. This latest report, the eleventh edition, was issued on January 28th and dissects key insights, including upcoming regulatory alterations and their effect on different regional cryptocurrencies. According to the study, while crypto remains vibrant and active, escalating "jurisdictional competition" can be observed worldwide. This competition aims to attract the best talents and establish crypto hubs. Clear evidence of this trend are regulatory measures introduced in the past year, which are anticipated to take effect in 2024. The United States and the European Union, in particular, risk losing their dominant position in the crypto industry.
The report projected an unclear future for the European Union. While the Markets in Crypto Assets Regulation (MiCA) could offer centralized service providers an opportunity for more efficient business operations, the inclusion of a clause in the Data Act to end intelligent contracts might deter blockchain developers. The EU established its Data Act on December 22, 2023, intended to ease and promote data exchange. However, the legislation includes a provision that could terminate intelligent contracts, creating an element of uncertainty and sparking concern within the crypto community.
The report also pointed out the uncertainty regarding crypto assets in the U.S. could make it challenging for innovative projects to thrive. The publication questioned whether, by 2024, U.S. regulators could offer the required regulatory clarity for entrepreneurs and consumers. However, the passing of the "Clarity for Payment Stablecoins Act" could offer enhanced regulatory transparency to stablecoin issuers like Circle (USDC), benefiting users.
The report also suggests that locations like Hong Kong and the United Kingdom present a more favourable environment for industry innovation. It lauded the U.K. for the mostly supportive feedback (79% respondents) provided on its future financial services regulatory scheme for crypto assets, with 40% of responses from crypto-native companies. In 2024, the U.K. promises to be an attractive destination for crypto businesses, with trends like a16z crypto's expansion to London and a planned Crypto Startup School being held there. The U.K.'s Economic Secretary to the Treasury also asserted the government's aim of making the U.K. a renowned global hub for crypto asset technologies.
The report also mentions that Hong Kong has made a dramatic policy shift regarding crypto regulation: issuing the first-ever licenses under a novel system regulating crypto exchanges in August 2023. In December of the same year, Hong Kong revealed conditions that stablecoin issuers would need to meet to procure a license to offer assets. Additionally, the region laid the groundwork for accepting applications for spot crypto ETFs. The report concludes with the observation that it remains to be seen if Hong Kong can attract more major crypto figureheads and reestablish itself as a crypto hub. For more information on the recent "State of Crypto" report, 21Shares was contacted by Cointelegraph.
Published At
2/1/2024 4:40:10 PM
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