The Crypto 5
Greetings!
Welcome to the Crypto 5 - your weekly round up of hot stories in the ever-changing world that is crypto.
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The UK's economic secretary says crypto could “turbocharge” the country's financial industry and is “fully behind” a stablecoin for?wholesale settlements between banks.
A stablecoin is a digital asset that is backed 1:1 with a fiat currency. We will spare you the technical details, but you can check out this quick explainer on stablecoins for more info.
If this plan goes ahead, the UK would be in good company in 2023:
Japan’s largest bank, Mitsubishi UFJ Trust...looks set to issue a?stablecoin for settlements?in February. In the U.S., a group of larger banks in November began working with the Federal Reserve Bank of New York?to test using digital tokens?that represent the dollar for settlements.
The UK is one to watch in the crypto space.
Blockworks shares an important chart to contextualize 2022. Yes, it was a year of “whiplash” but there were also some record funding rounds - and that money will be spent on building new and better user experiences.
Despite the fall, there were plenty of 9-figure rounds including ConsenSys, Yuga Labs, Opensea, Blockdaemon, Matter Labs, and Limit Break, among others. If the trend from past bear markets continues, the capital will be deployed through the bear market to develop better UXs and rails for scalability to accommodate the new market participants in the next bull run.?
If we take a look back at the last bear market in crypto, what came out: NFTs, important upgrades to Ethereum and Bitcoin's lightning network (think back to dial-up when you wrote your emails all offline and sent them in batches later) and of course decentralized apps (dapps) that execute transactions with?smart contracts.?
The building continues, so dont rule out crypto.
The People’s Bank of China is tracking its central bank digital currency, the e-CNY, in official reports. While the Bank said there was no noticeable change in growth rates, it reported “the currency in circulation grew at a rate of 15.3% in December, with the broad money supply reported to be 266.43 trillion yuan.”
Why does tracking China matter?
China has a 6-year head start on Central Bank Digital Currencies and has filed over 120 patents, according to the Atlantic Council. China can leverage its Digital Yuan to help it achieve its foreign policy objectives in emerging markets and beyond.
Chinese banks provided nearly $450 billion for its Belt and Road initiatives. According to Goldman, in the next five years “the Digital Yuan could have as many as one billion users, see as much as $240 billion in issuance and have an annual payment volume of $3 trillion.”
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Before he takes the stage at the World Economic Forum 's Annual Meeting in Davos, Michael Casey pens a piece about how grassroots movements in crypto are changing the game.
He doesn't sugar-coat the year that was 2022: “Cryptocurrencies are far from universally accepted. And the negative sentiment generated by the 2022 meltdown will slow growth.”
But, and there is a but.
“...the worldwide adoption trend...is on the up and it’s poised over the long term to disrupt the Western financial establishment, which whether it likes to be labeled as such or not, includes privileged “crypto bros” who treated centralized token exchanges as casinos to 10-x their dollar wealth.”
He spotlights crypto projects built for and by local communities:
There are a lot of other impactful projects out there - check out Casey's piece for more details and resources.
Axios Crypto is one of the top crypto newsletters out there. If you are not subscribed, please do so immediately.
Crystal Kim sums up the latest headline-making issue between Barry Silbert's Digital Currency Group and the Winklevoss' Gemini crypto exchange.
“Catch up quick: Gemini had to?halt?its Earn program in mid-November as a result of Genesis stopping its lending services, which the latter attributed to fallout from the failure of crypto exchange FTX. Genesis had a Jan. 8 deadline to meet, already come and gone.”
There are a lot of details in this one and it's an important story for the week. Brady Dale and Crystal Kim deserve major kudos for their consistent work, so best to check out this read to get all the details.
Before you go,
It's worth sharing a few pieces on the aforementioned World Economic Forum and its Annual Meeting.
Often accused of being a talk shop and a gathering of the elites, the Forum is more than that (i'm sorry). How do I know? I was one of the "lizard people" on the inside, you may say. Well, don't take my word for it:
But what has the Forum actually done, you maybe asking...
Best of luck to the Forum team next week and, as usual, thank you for getting to the bottom of this newsletter.