“Bitcoin (BTC) traded higher early Tuesday, defying the Bank of Japan (BOJ)-inspired slump in stock markets. The BOJ unexpectedly lifted the cap on the 10-year Japanese government bond yield to 0.5% from the previous 0.25%, ending the long period of near-zero interest rates.
The central bank said the policy tweak would facilitate the transmission of monetary-easing effects, indicating that it didn’t want markets to read it as a sign the BOJ is finally pivoting away from liquidity easing. However, risk assets did just that.
The reaction in equities and bond yields is understandable, considering the BOJ’s policy of capping the 10-year yield near zero with unlimited liquidity-boosting open-ended bond purchases, also known as yield curve control (YCC), was a major source of downward pressure on borrowing costs in Asia and worldwide and supported risk-taking. The Yen was supposedly used to fund risk-taking activities elsewhere.
The BOJ funding was the cheapest source of liquidity. While the policy tweak is not a removal of YCC, the signaling will lead people to extrapolate that BOJ Governor Haruhiko Kuroda will seek to exit YCC by the end of this term in April.
Crypto services provider Matrixport’s head of strategy and research, Markus Thielen, said the BOJ’s move and the resulting yen strength could boost demand for other assets, including cryptocurrencies.
A stronger yen will make Japanese stocks less attractive to foreigners as well as to locals. This might increase the interest in alternative investments – such as BTC.”
“Starting today, you can now purchase crypto on the Uniswap Web App using a credit/debit card or bank transfer at the best rates in Web3 thanks to our partnership with Moonpay!
The company shared that the decentralized finance (DeFi) onboarding experience has been a major hurdle to adoption, as CEXs are seen as more convenient by users despite associated risks. Uniswap hopes its latest rollout will improve the onboarding process.”
“Payments processor Visa recently proposed a system known as “account abstraction” that uses smart contracts to enable automated programmable payments on Ethereum. Such a move would allow recurring payments to be conducted entirely over blockchain networks.
Account Abstraction (AA) is a proposal that aims to combine user accounts and smart contracts into a single type of account on the Ethereum blockchain. One use case for AA is the creation of “delegable accounts,” which allow for the automation of payments. A user can delegate the ability to initiate a payment to a pre-approved smart contract, known as an auto payment contract.”
“In a recent blog post, Coinbase CEO Brian Armstrong shared a “realistic blueprint” for regulating cryptocurrencies and restoring trust in the industry following the collapse of crypto exchange FTX. According to Amstrong, “regulation should be limited only to centralized actors” in the cryptocurrency industry, where transparency is limited.
For decentralized crypto products like decentralized finance (DeFi), decentralized autonomous organizations (DAOs), and self-custodial wallets, financial regulators shouldn’t play a role here, as “transparency is built in by default.” Specifically, self-custodial wallets should be treated as “software companies,” and decentralized protocols should be treated as equivalent to “open source code.”
Decentralized stablecoins are a “good place to start” in an attempt to regulate the industry, said the Coinbase CEO. Stablecoins issuers could be regulated under “standard financial services laws” by registering themselves as a state trust or OCC national trust charter. This would require these firms to hold assets 1:1 with exposure only to high-quality assets like treasuries.
After reigning in stablecoins, he also highlighted the need for more clarity around which assets in the crypto market are commodities and which are securities. The Coinbase chief also called on Congress to step in and pass legislation for classifying cryptocurrencies with a new version of the Howey test.
I’m optimistic that we can make significant progress on the above in 2023 and pass crypto legislation.”
- “Epic battles over regulation – 2023 could be the year where the clashes over regulation finally reach their climax.
- Web3 platforms continue to grow – More meaningful Web3 social platforms and protocols, and growth in interoperable identity, on-chain social graphs, and crypto-abstracted social experiences.
- Truly global bitcoin adoption – Global adoption is probably the number one story for next year.
- Web3 gets fashionable – Further collaborations between Web3 personalities and consumer and luxury brands that want to explore new commerce models and customer touchpoints.
- Don’t count out NFTs – The sustained high-risk appetite in NFT-funding in 2022 is a strong indicator that it will be one of the first sectors to recover next year. Brands will continue to flock to NFTs.
- Gaming and DAOs continue to grow – Titles that have been in development for quite some time including Big Time, Star Atlas, Ember Sword, will finally see the light of day in 2023.
- The big exchanges become “disaggregated” – We see custody, brokerage and exchange/price discovery get broken out into different players, just like in [traditional finance].”
“Independent gaming developer Metaverse Game Studios, which boasts a host of developers that have worked on various AAA titles, has announced a partnership with Web3 development platform ImmutableX to continue building Angelic, a new Web3 MMORPG.
The upcoming title is powered by Unreal Engine 5 and is touted as a dark science fiction-themed narrative strategy RPG featuring turn-based combat. ImmutableX’s full-stack gaming platform will power Ethereum-based nonfungible tokens (NFTs) digital collectibles in the game that can be owned by players.
By leveraging ImmutableX, our users can tap into the benefits of fast, secure, and gas-free minting and an uninterrupted, quality gaming experience.
Angelic will roll out alpha testing with select community members and partners in January 2023 and a public launch in February.”