By George Ward
Last year, the crypto industry saw a lot, from an all-time market cap of $3 trillion at the end of 2021 to the painful lows of 2022. Despite the setback, crypto asset enthusiasts believe that the struggling global economy has underperformed, and so have digital assets.
A New Beginning
Last year was bloody for the fledgling digital asset industry with many bankruptcies, hacks, and implosions, notably that of the Terra LUNA ecosystem and FTX. The exchange’s collapse was the last of the debacle of 2022.
The year ended with the Sam Bankman-Fried, once an influential crypto billionaire becoming a broke and incarcerated figure, having masterminded the biggest fraud in the crypto space. However, reports indicate that the contagion has not spread to the mainstream financial sector.
Many industry analysts predict that 2023 is the year that will usher in a series of regulatory interventions to shape the crypto ecosystem. Observers believe that the US will continue strengthening its regulatory move by classifying different crypto assets into either commodities or securities.
The executive order (EO) of Joe Biden’s administration on crypto assets published in March 2022 confirmed the long-held sentiment that virtual assets are here to stay. Several US government agencies at the federal and state levels have begun to act on the EO by developing regulatory frameworks.
Furthermore, the concept of a digital USD has garnered widespread support. But significant skepticism exists about the move concerning blockchain-based crypto assets exists. Meanwhile, the EO has to open the door for more detailed regulatory proposals that the government intends to implement via legislation.
The oversight roles between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are currently being debated by the US Congress. Therefore, the crypto community will likely see more comprehensive laws for the industry in 2023.
Crypto Regulation Across The UK And Europe
The United Kingdom (UK), despite its political issues for most of 2022, has already revealed its ambition to become a crypto hub last April. According to the nation’s Economic Secretary, Andrew Griffith, the country is still committed to becoming a key player in the blockchain and crypto space.
With the Financial Services and Markets Bill (FSMB) still under debate in the Parliament, the current regulator, the Financial Conduct Authority (FCA), will continue overseeing crypto market regulations. Elsewhere in Europe, the hope is that the new Market in Crypto Assets (MiCA) bill will become the comprehensive regulatory piece to control the digital asset space in the 27 member countries making up the European Union.
However, analysts believe that MiCA may be delayed and pressured to be the final regulatory puzzle to prevent other FTX-like cases.