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 Bitcoin price hit its all-time high for the first time this week, which was created in the 2017 Bull Run. While in 2017 primarily individual investors participated in the price increase, in 2020 an increasing number of institutional investors joined in. However, it is not only the price development that should be taken into account here, but in particular the underlying factors that created the foundation for new highs. The recent price surge is no coincidence. The oldest crypto currency has shown a remarkable development in its eleven-year history. Especially in the last two years, regulatory progress has paved the way for a more comprehensive adoption as a means of storing value and for payment. A broader institutional perception is observable and major players in the field of payment services but also in the form of investors are entering the field of crypto assets.
Symbolic for the awakening of institutional investor interest is the announcement of the world's leading index provider S&P Dow Jones Indices to offer index products for crypto currencies starting in 2021. The U.S. company justified its decision by referring to the positive development of the cryptoasset ecosystem, which has undergone a tremendous maturing process since 2017. In cooperation with blockchain data provider Lukka, data from over 550 crypto currencies are available to create customized indices and benchmarking tools.
Payment service providers such as Paypal advance into the field of cryptocurrencies by extending their range of services with Bitcoin & Co. Likewise credit card companies are also active in the area. The U.S. credit card company Visa has already submitted a patent application for its own digital currency to the authorities in 2018. Originally, Visa was also a member of the Libra Association, the Stablecoin project of Facebook. Most recently, the credit card giant emphasized the possibilities of using digital currencies as the means of payment. Furthermore, Visa announced a cooperation with Ethereum-Startup Circle, the company behind the second largest US Dollar Stablecoin "USDC". Finally, the new partnership with financial services provider Blockfi will see the launch of a credit card in spring 2021 that will include Bitcoin as a cashback. Rival Mastercard, which was initially a part of the Libra project, has a similar vision. For several months now, they have been trying to expand their crypto card partner program to catch up with Visa.
With the first blockchain companies settling in the Zug area (which is an area in central switzerland) starting in 2013, the term "Crypto Valley" was soon born in reference to the "Silicon Valley". Thanks to politics and regulation, Switzerland was able to create the necessary legal framework for a flourishing ecosystem around blockchain and crypto currencies at very early stages. Over the years, the area has enjoyed new company settlements and continuous development. The Swiss financial center and the boom in the Fintech industry also had a significant influence on the region's development. Meanwhile, an ecosystem of diverse companies including specialists for digital assets with a banking license, has emerged. One important pillar of the innovation of theblockchain hub are promising and future-oriented start-ups. In a conversation with Mathias Ruch, founder and CEO of the venture capitalist CV VC, we gain insights into the development of the Crypto Valley, start-up financing and the potential of the blockchain revolution.
Furthermore: The European Central Bank (ECB) is intensively engaged in the development of a digital Euro. President Christine Lagarde sees a greater risk to the financial stability and monetary sovereignty of the EU in the current development of privately issued Stablecoins than with the cryptocurrency Bitcoin. Lagarde does not believe that Bitcoin and other digital assets with a limited amount in circulation represent a particular threat to the financial status quo in Europe. However, she recently explained that digital currencies with coupled prices threaten the "competitiveness and technological autonomy" of the European Union. She also added that the efforts of "big tech" to create digital currencies raise important privacy issues. Although not explicitly mentioned, Lagarde apparently refers to projects such as Facebook's Libra, which was renamed "Diem" recently.
Selected articles in the weekly review:
Bitcoin broke the all-time high of 2017 this week, and the price increase is no coincidence. In the current year in particular, significant progress has been observed.
"Crypto meets Wall Street." The leading index provider S&P Dow Jones Indices will offer index products for crypto currencies starting next year.
Visa continues to focus on crypto currencies and is expanding in this area. The US company is particularly interested in the Stablecoins segment.
The entire blockchain ecosystem has undergone a maturing process in recent years. Insights from Mathias Ruch, founder and CEO of venture capitalist CV VC, about start-up financing, the blockchain revolution and the Crypto Valley.
The European Central Bank sees the financial stability and monetary sovereignty of the EU endangered by privately issued Stablecoins and wants to accelerate the development of the digital euro.
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