2023 is turning out to be a doubly decisive year for the future of cryptocurrencies. This with significant progress, but also spectacular setbacks. It will remain a decisive year for the crypto ecosystem. Between regulatory clarifications, positive speeches from institutions, adoption by States and resounding legal cases. A look at key events that have moved the crypto industry forward, while revealing ongoing risks.
Institutional and state adoption on the rise
In the United States, the court decision recognizing that the crypto XRP is not a financial security has opened the way for listing to be possible again on exchanges like Coinbase. Another encouraging sign, the giant BlackRock has launched the regulatory process to offer an ETF invested in Bitcoin and Ethereum.
Geopolitically, China and Russia have accelerated their economic rapprochement, using the yuan more in their bilateral trade to the detriment of the US dollar. A movement reinforced by the commercial alliance between China, Russia, India, Pakistan and Central Asia.
Furthermore, for the first time, the yuan has surpassed the dollar in volume of cross-border transactions in China. These developments mark a decline in the hegemony of the greenback on the world stage.
Separately, asset manager BlackRock has launched the process to offer a Bitcoin ETF. The Fed acknowledged that crypto appeared to have a future as a new asset class. So many encouraging signals sent by powerful institutions.
Abuses and scandals that taint the crypto industry
But at the same time, the crypto ecosystem has experienced its share of resounding slip-ups. Sam Bankman-Fried’s high-profile trial resulted in a conviction on all counts of fraud. In Turkey, the CEO of the Thodex exchange platform received a record sentence of 11,000 years in prison for embezzlement.
The arrest on the run of Terra founder Do Kwon and that of SafeMoon executives in the United States also tarnished the reputation of the sector. These court cases highlight the ongoing dangers of greed and a lack of crypto regulation.
Overall, the year 2023 will therefore leave a mixed feeling. Cryptocurrencies have continued to be adopted by the general public and institutions. But at the same time, the abuses inherent in this decentralized universe remind us of the need for a solid regulatory framework to protect investors.
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