This week’s overall crypto outlook was dominated by central bank digital currencies, while the crypto market traded on relatively neutral sentiments in the same period.
Central bank digital currencies (CBDCs) became the talk of the town amongst the crypto community during the week. The digital euro project was the highlight as regulators fast-tracked it and shared other details about it. As several countries join the race to develop their central bank digital currencies, the applications of the underlying blockchain technology have become more prominent.
Meanwhile, the broader crypto market did not see much volatility this week. BTC traded in a close range, while other tokens saw little gains. Analysts and traders could closely monitor the market’s movements this weekend, as BTC’s $50,000 support has become crucial. Moreover, the upcoming Bitcoin halving event this year could impact the crypto market.
Earlier this week, European Central Bank (ECB) officials specified the privacy concerns of the digital euro project. According to them, the project will have the highest security and privacy protocols. The ECB also clarified a few queries from the banking industry, putting aside claims that the digital euro project could reduce bank deposits.
The digital lira CBDC project has also progressed in Turkey, where regulators published a new research report on it. Countries worldwide, including China, which has banned crypto trading, have supported the issuance of CBDCs, noting the importance of blockchain technology.
Hong Kong and Japan saw major developments this week regarding the crypto industry in Asia. Hong Kong’s crypto-friendly rules have led to record crypto license applications. The Hong Kong Monetary Authority, recognizing crypto’s growing popularity, has given crypto firms directions regarding tokenization and custody of digital assets.
Its official letter stated, “The HKMA will keep in view the evolving digital asset market and international regulatory landscape, and may provide further guidance as and when necessary.” On the other hand, Japan specified requirements for peer-to-peer (P2P) crypto transactions.
Besides, asset management firms in the European Union have also claimed digital asset products have become more popular after the US crypto ETFs. According to these firms, the spot Bitcoin ETF approvals in the US have surged investors’ confidence in these products. As a result, Europe may see more such digital asset products soon after regulatory approvals.
Stablecoins have also emerged as a popular use case of blockchain technology, which two countries affirmed this week. The UK will likely have a stablecoin law this year. Similarly, South Africa also plans to adopt stablecoins to boost digital payments.
Thus, this week’s overall crypto outlook was stable and largely loomed around CBDCs, stablecoins, and regulatory issues.
In hindsight, these crypto tokens were the best performers this week:
The following tokens saw the highest negative returns this week:
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