Bitcoin has fallen back from the $30,000 level it hit earlier this month, but Standard Chartered said it could reach $100,000 by the end of next year. Meanwhile, crypto firms remain focused on the regulatory environment – and all eyes are on the EU’s new rules. Here’s what you need to know:
1. Crypto firms scramble for banking partners as willing lenders dwindle
2. Bitcoin could reach $100,000 by end of 2024, says Standard Chartered
3. Chinese digital currency stocks rise amid new efforts to promote e-CNY
The EU Parliament has backed the EU’s crypto rules, which will be rolled out in phases from July next year. They are the world’s first set of comprehensive laws designed specifically for the crypto-asset sector, and EU finance chief Mairead McGuinness said she hopes other countries will follow suit.
Regulation has become a major talking point for crypto firms. Some have been vocal in their criticism of what they say is a lack of clear regulation in the US. In the latest escalation of its battle with the US Securities and Exchange Commission, exchange Coinbase filed a legal challenge on Tuesday to try to get the SEC to create new rules for crypto. But the SEC has said that crypto firms must comply with the laws that already exist.
Meanwhile, in a world of central bank digital currencies, the EU’s finance chief said a digital euro introduced by the European Central Bank would not be a “Big Brother” project seeking to control citizens. People who are concerned about it should “calm it down a bit,” she said. The ECB said something similar in January: that it will not collect data on a digital currency’s users. (Reminder: a central bank digital currency would be a way for people to get digital money issued directly by the central bank, instead of commercial banks. Read more here.)
To be sure, the ECB has not yet decided whether it will introduce a digital euro, and in any case it won’t be until 2026. European banking lobbies have said a central bank digital currency could take deposits and business away from commercial lenders, but a ECB board member said this week that the ECB could “compensate” the banks.
Meanwhile, China has been pushing ahead with its own digital currency, the digital yuan or “e-CNY”. The state media reported that one city, Changshu, will pay government employees their salaries in the form of the digital yuan from May. Reuters spoke to three people who had received e-CNY, but they all said they do not find sufficient scenarios to use it in everyday life.
* Banking problems
: Crypto firms are still trying to find new banking partners after the collapse of Silvergate, Signature and Silicon Valley Bank last month. When they approach smaller financial institutions, there is more “concentration risk”. US regulators have already expressed concern about the security of banks that are heavily focused on crypto clients.
* Coin base in Bermuda:
Coinbase said it has a license to operate in Bermuda, as part of a push to expand globally. This comes after Coinbase’s CEO said at a conference in London that crypto firms could develop in “offshore” havens if they don’t get clarity on the rules in the US and UK.
* Anonymity risk:
A US regulator said the “lure of anonymity” is what makes crypto-assets attractive to illicit financing. Authorities and companies must address this, she said.
* Blown off:
Binance’s US arm dropped its $1.3 billion deal to buy assets from Voyager Digital. The deal was temporarily halted by a US judge last month, to give the government more time to investigate it. Binance.US said a “hostile and uncertain regulatory climate” in the US made for an unpredictable operating environment.
* North Korea:
The United States imposed sanctions on three people based in China who it said were involved in laundering money stolen by North Korean hackers. The US says North Korea is stealing cryptocurrency to fund its weapons programs. North Korea-linked hackers stole an estimated $1.7 billion in cryptoran last year, according to Chainalysis.
* Analysts’ predictions:
Standard Chartered said bitcoin could reach $100,000 by the end of the year. JPMorgan has also made bullish predictions about bitcoin recently. (A Citi analyst said in November 2020 that bitcoin could climb as high as $318,000 by the end of 2022. Instead, it ended the year down about 65% to $16,500.)
* Insider trading:
The trial started for a former OpenSea product manager accused of insider trading by buying NFTs based on confidential information about tokens. Read more about the case here.
Crypto plus AI? It’s a match made in buzzword heaven. Cryptocurrencies related to artificial intelligence have surpassed bitcoin recently, and a company called CryptoGPT raised $10 million to fund its products that it says allow users to sell their data to AI companies. Investors hope that a few runaway successes will compensate for the projects that fail.
(Reporting by Elizabeth Howcroft; Editing by Louise Heavens)
Reuters
