Bitcoin’s dipped back down from the $30,000 level it hit earlier this month, but Standard Chartered said it could hit $100,000 by the end of next year. Meanwhile, crypto firms remain focused on the regulatory environment - and all eyes are on the EU's new rules. Here’s what you need to know:

1. Crypto firms scramble for banking partners as willing lenders dwindle

2. Bitcoin could hit $100,000 by end-2024, Standard Chartered says

3. Chinese digital currency stocks surge amid new efforts to promote e-CNY

The European Parliament has backed the EU’s crypto rules, which are due to be rolled out in phases from July next year. They are the world’s first set of comprehensive laws designed specifically for the crypto asset sector, and the EU’s financial services chief, Mairead McGuinness, said she hopes other countries follow suit.

Regulation has become a key talking point for crypto firms. Some have been vocal in their criticism of what they say is a lack of clear regulation in the United States. In the latest escalation of its fight with the U.S. Securities and Exchange Commission, the exchange Coinbase filed a legal challenge on Tuesday to try and make the SEC create new rules for crypto. But the SEC has said that crypto firms need to comply with the laws that already exist.

Meanwhile, in the world of central bank digital currencies, the EU’s financial services chief said that a digital euro introduced by the European Central Bank wouldn’t be a “Big Brother” project seeking to control citizens. People who are worried about that should “calm it down a little”, she said. The ECB said something similar in January: that it wouldn’t want to gather data about a digital currency’s users. (Reminder: a central bank digital currency would be a way for people to have digital money issued directly by the central bank, rather than commercial banks. Read more here.)

To be sure, the ECB hasn’t decided yet whether it will introduce a digital euro, and it wouldn’t be before 2026 in any case. European banking lobbies have said that a central bank digital currency could take deposits and business away from commercial lenders, but an ECB board member this week said that the ECB could “compensate” banks.

Meanwhile, China has been pushing ahead with its own digital currency, the digital yuan or “e-CNY”. The state media reported that a city, Changshu, will pay state employees their salary in the form of the digital yuan from May. Reuters spoke to three people who had been receiving the e-CNY, but they all said they don’t find adequate scenarios to spend it in their daily life.

* Banking problems

: Crypto firms are still scrambling to find new banking partners after the collapse of Silvergate, Signature and Silicon Valley Bank last month. As they turn to smaller financial institutions, there is more “concentration risk”. U.S. regulators have already expressed concerns about the safety of banks which are highly focused on crypto clients.

* Coinbase in Bermuda:

Coinbase said it’s got a licence to operate in Bermuda, as part of a push to expand globally. This comes after Coinbase’s CEO said at a conference in London that crypto firms could develop in “offshore” havens if they don’t get clarity over the rules in the U.S. and UK.

* Anonymity risks:

A U.S. regulator said that the “allure of anonymity” is what makes crypto assets attractive to illicit finance. Governments and companies need to address this, she said.

* Called off:

Binance’s U.S. arm ditched its $1.3 billion deal to buy assets from Voyager Digital. The deal had been temporarily stopped by a U.S. judge last month, to give the government more time to examine it. Binance.US said a “hostile and uncertain regulatory climate” in the U.S. made for an unpredictable operating environment.

* North Korea:

The U.S. put sanctions on three people based in China who it said were involved in laundering money stolen by North Korean hackers. The U.S. says North Korea steals cryptocurrency to help finance its weapons programmes. North Korea-linked hackers stole an estimated $1.7 billion in crypto heists last year, according to Chainalysis.

* Analyst predictions:

Standard Chartered said bitcoin could reach $100,000 by the end of the year. JPMorgan has also made bullish predictions about bitcoin recently. (A Citi analyst said in November 2020 that bitcoin could climb as high as $318,000 by the end of 2022. Instead, it closed the year down about 65% at $16,500.)

* Insider trading:

The trial’s started for a former OpenSea product manager accused of insider trading by buying NFTs based on confidential information about the tokens. Read more about the case here.

Crypto plus AI? It’s a match made in buzzword-heaven. Cryptocurrencies linked to artificial intelligence have outperformed bitcoin recently, and a firm called CryptoGPT raised $10 million to fund its products that it says allow users to sell their data to AI companies. Investors hope that a few runaway successes will compensate for the projects which come to nothing.

(Reporting by Elizabeth Howcroft; Editing by Louise Heavens)


Reuters