What has been happening around Blockchain Technology and Cryptocurrencies this week? The most relevant local and international developments as well as appealing background reports in a pointed and compact way in retrospect in our weekly review.
The future of the financial sector is digital. Digital assets have been complementing the investment universe for some time now. A wide range of instruments, trading possibilities and other services are already available in Europe. Regulation naturally lags behind fast-growing sector. Switzerland was able to introduce legislation at an early stage to ensure legal certainty. The European Commission has now proposed a new package to ensure the digitisation of the financial sector. The legislative draft, called "Regulation on Markets in Crypto Assets" (MICA), is intended to clearly specify what a crypto-asset is and which sub-categories exist. With this approach, the European Union is presenting a framework for dealing with the new assets. In addition to countering the fragmentation of the digital market for financial services, the aim is to ensure that the EU regulatory framework facilitates digital innovation in the interests of consumers as well as market efficiency. This is a crucial and necessary step forward for the European Union to provide legal certainty for the rapid growing market of digital assets. The latest proposal must be adopted by EU governments and the European Parliament before it becomes law. If adopted, the European Union would be the biggest and foremost region with full cryptocurrency regulation.
Landmark news for the United States: The state of Wyoming recently accepted the application of one of the largest crypto currency exchange services, Kraken. This makes Kraken Financial the first exchange for digital assets with an official banking license in the United States.
A mostly unregulated, rapidly growing area is decentralised finance (DeFi). Decentralised stock exchanges, decentralised lending, stablecoins.... even observers with an affinity for finance can rarely make sense of these terms. Uniswap, Sushiswap - a decentralised delivery service? Far from it. While in the traditional markets everything revolves around central bank policy and its liquidity injections, a multi-billion dollar battle for liquidity is taking place in the parallel world of decentralised stock exchanges. This week, Uniswap, currently the biggest player in the field, introduced its own token "UNI" with a market capitalisation of a whopping USD 500 million. A free distribution (Airdrop) to existing users of the exchange caused a considerable sensation. An immersion in decentralised digital finance.
The foundation for the decentralised financial system (DeFi) was laid by granting loans against the deposit of cryptoassets as collateral. Meltem Demirors explains in a three-part series how the development took its course and which innovations are already setting the DeFi standard. In this week's issue, the reader is introduced to the current models for alternative loans.
Even the armed forces of the United States are already recognizing the advantages of the blockchain: The United States Space Force has commissioned the blockchain company Xage Security to develop its data protection strategy.
And finally: There was a sharp correction in the digital assets markets. Bitcoin, Ethereum as well as the DeFi-Coins have taken a hit. More about this in the Technical Analysis.
Selected articles in the weekly review:
The European Commission has proposed a new package for the digitalization of the financial sector. For the first time a bill includes regulation of crypto-assets, which is supposed to create legal certainty in the European Union (EU).
Kraken, one of the world's largest crypto-currency exchanges, becomes the first official Bitcoin bank in the United States. The exchange received a state-recognized bank license in the USA
The decentralised stock exchange Uniswap introduced its own token "UNI". This was celebrated with an airdrop to its users. The competitor SushiSwap also caused quite a stir recently. An overview of recent events in the world of decentralised stock exchanges and the struggle for liquidity.
In a three-part series, Meltem Demirors brings the past, present and future of crypto-credit markets closer to Demirors. This time the reader is introduced to the current models for alternative credit in the world of DeFi.
The United States Armed Forces are taking benefit of the Blockchain in the area of data protection.
An overview of the trading activities on the cryptomarkets. Studies on traded volumes, supply and demand situations, as well as periodic technical analysis of the most important crypto-currencies and indices, including the perspective of Crypto Finance AG Senior Trader Patrick Heusser.