An overview of current news in the crypto space

In our digest, we took a look at some important crypto industry news over the past week:

1. Successful completion of 2023: stabilization and growth of the cryptocurrency market
2. Bitcoin reaches the $45k mark for the first time since April 5, 2022
3. Vitalik Buterin presented an updated Ethereum roadmap with a focus on security and decentralization
4. Hong Kong authorities prepare to regulate stablecoins
5. India’s central bank opposes integrating cryptocurrencies into the financial system
6. People’s Bank of China warns of cryptocurrency risks for Chinese citizens

Now for more details. Reading time: 7 minutes.

1. Successful completion of 2023: stabilization and growth of the cryptocurrency market
   The successful completion of 2023 marked the stabilization and growth of the cryptocurrency market. Bitcoin went through significant price fluctuations throughout the year, starting from its lowest level in January around $16,000. However, the second half of the year proved to be favorable for bitcoin as the price began to rise amid expectations of bitcoin-ETF approval in the US. This led to bitcoin consolidating at $40,000 or more, signaling the end of the cryptozyme. Several key events occurred during the year such as bank troubles, the BRC-20 boom and increased regulatory pressure on exchanges. The year 2024 is expected to bring two important events: the approval of Bitcoin ETFs and the halving of Bitcoin. All of these could lead to an increase in the price of BTC and further development of the cryptocurrency market. Crypto investors are shifting their attention to the next year with the expectation of positive changes.
2. Bitcoin reaches the $45k mark for the first time since April 5, 2022
   The price of bitcoin has reached the $45,000 mark for the first time since April 5, 2022, according to various cryptocurrency exchanges. Bitcoin is currently worth more than $45,200, and the coin has been holding at this level for several hours now. This overcoming of the mark has caused some market participants to believe that resistance has finally been overcome. The first bitcoin-ETFs are expected to be accepted within a week, which could lead to a rise in the bitcoin exchange rate with billions of dollars being injected into the instrument. In addition, halving is expected in April, after which the bitcoin exchange rate traditionally sets records.
3. Vitalik Buterin presented an updated Ethereum roadmap with a focus on security and decentralization
   Vitalik Buterin, the creator of Ethereum, presented an updated roadmap for the blockchain platform. The main purpose of the updates is to improve network security and optimize the protocol for a more efficient system. One of the key changes addresses centralization issues in Proof-of-Stake (PoS). Buterin suggests exploring new MEV mechanics and block reallocation to mitigate centralization risks. Other aspects of the updates include revising the economics of rates, integrating Merkle trees, and prioritizing “state expiration” reduction. Vitalik Buterin also proposed three options for simplifying Ethereum’s consensus algorithm, including a focus on decentralized staking pools, the creation of two tiers of validators, and the introduction of validator rotation. In a separate article, Buterin expressed dissatisfaction with the current vector of development of the Web3 sphere, due to the move away from decentralization and the rise of commissions. He emphasized the values that should be characteristic of the Web3 sphere, such as open global participation, decentralization and resistance to censorship. Buterin emphasized the importance of open development and cooperative thinking to achieve cybersecurity and the development of the ecosystem as a whole.
4. Hong Kong authorities prepare to regulate stablecoins
   Hong Kong authorities are preparing to introduce regulation of stablecoins, digital assets linked to fiat currency. Proposals published by the Financial Services and Treasury Board (FSTB) and the Hong Kong Monetary Authority (HKMA) call for mandatory licensing for issuers of stablecoins selling tokens to Hong Kong residents. Companies wishing to be licensed must have sufficient reserves to ensure the stability of digital coins, as well as segregate their own and customer funds. The document also indicates the need to register an office in Hong Kong and have a CEO and management team. Algorithmic stablecoins are not able to obtain a license. Public consultation on the proposals will continue until February 29, 2024. Hong Kong Finance Minister Christopher Hui emphasized that compulsory licensing helps manage the risks associated with the development of steblecoins and will contribute to the development of the Web3 ecosystem. This new regulatory measure aims to ensure monetary and financial stability in Hong Kong.
5. India’s central bank opposes integrating cryptocurrencies into the financial system
   India’s central bank opposed the integration of cryptocurrencies into the financial system, saying that they do not provide sufficient benefits. Representatives of the regulator noted that cryptocurrencies are speculative in nature, highly volatile and can be used in illegal activities. Instead, they see central bank national digital currencies (CBDCs) as a safe alternative. In October, a roadmap for implementing crypto regulation was adopted to maintain stability. Despite this, Indian citizens continue to invest heavily in cryptocurrencies. In contrast to the regulator, the Governor of the Reserve Bank of India expressed fears about the development of private cryptocurrencies, warning of a possible financial crisis. He noted that cryptocurrencies have no underlying value and are a speculative activity. Instead, the central bank governor supports the use of government-issued digital currencies.
6. People’s Bank of China warns of cryptocurrency risks for Chinese citizens
   The People’s Bank of China has warned of the risks associated with the use of cryptocurrencies in China. The document published by the Central Bank notes that cryptocurrencies cannot be considered legal tender as they are not issued by state authorities. In addition, the NBK pointed out the financial and technological risks that arise from the decentralized nature of cryptoassets and the lack of clear regulatory rules. Among the security threats, the risk of cyberattacks, market manipulation and loss of cryptoassets was mentioned. The researchers also noted that the governance of decentralized finance has centralized features, which could put investors’ interests at risk. The People’s Bank of China has urged international regulators to tighten supervision of the crypto industry to protect users from fraud and loss of money. These warnings reflect growing concerns in China about cryptocurrencies and emphasize the need for measures to protect citizens.

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