2023 has been a very tumultuous year for the digital asset space, with the ongoing FTX saga, the collapse of Silicon Valley Bank, massive fines, and the ban of Binance, among other things. Things seem to be changing and 2024 is off to a great start in many ways.
Bitcoin:
Positive market sentiment has returned, showing why Bitcoin (BTC) is once again a very important asset. With exchange-traded funds (ETFs) hitting the global market immediately and halving in April, it's anyone's guess where they'll be at the end of the year. This is important for accrediting BTC ETF offerings like BlackRock.
Digital currencies backed by fiat
Stablecoins, token deposits, and central bank digital currencies (CBDCs) are also strongly opposed to the idea of "global finance 2.0," and the US dollar-based dominance of the global economy creates some distinction between these new forms of money. Digital currencies. Cross-border transactions and settlements in real time 24/7.
Stable coins pegged to the local currency have returned in recent months, although the exchange rate is still weak against the US dollar. With the announcement of stable currency rules and consultations in Japan, Singapore, Hong Kong, the United Kingdom and elsewhere, the gap is narrowing and new dynamics are emerging between economies. Meanwhile, more than 70% of the world's central banks have piloted CBCCs, such as several projects in collaboration with the Bank for International Settlements (BIS), including the mBridge, Guardian and Mariana projects.
Aspects of digital infrastructure development
Negotiations over Layer 1 (L1) infrastructure have yielded some winners, while the battle over Layer 2 (L2) and aggregation sites continues. Ether
Scalable Layer 2 solutions have emerged around the world, offering a variety of options to provide additional capabilities to improve scalability, data protection, and cost-effectiveness. Many Zero Knowledge (ZK) kits have entered the market, although over time they have run away, and their focus is on applications and protocols, the connection between the chain, but more importantly the connection between traditional finance (TradFi) and decentralized finance. . (testing).
In addition, the development of Layer 2 solutions on the Bitcoin network has also accelerated as the new BRC-20 token standard has led to a higher volume of transactions on the main chain. One of the advantages of BRC-20 is that everything happens on-chain without the need for smart contracts or other centralized media, which is a big step towards trustless networks. In this way, the two-tier solution can generate more token reputation and exchange main chain transactions without incurring online transaction fees.
The normative field is strengthened.
International policies around regulator-focused finance (CeFi) have been enforced with similar rigor and safeguards. The EU's introduction of MiCA has set best practices for others, and jurisdictions aspiring to become digital value centers are beginning to shift policy frameworks toward stablecoins, DeFi, decentralized identities, and self-hosted wallets. This is supported by extensive research and development efforts by international standards bodies such as IOSCO and the Financial Stability Board (FSB), which are driving the entire industry towards a mature regulatory environment. The Crypto Innovation Council has published a 2023 Crypto Policy Brief for more information.
My observations for next year
1/ Continued adoption of tokenized real-world assets (RWA) on "public networks", further demonstrating the benefits of open source technology and decentralized infrastructure.
2/ Dollar-backed stablecoins remain strong even as over 90% dominance begins to wane. Euro, yen and dollar-based currencies (HKD, AED) have more market share.
3/ Web3 appears in more government ads than ever, reflecting the importance of the new digital economy, especially in the East.
4/ Bitcoin takes large stakes in major funds and corporate treasuries.