Regulatory Trends

1. The President of the European Central Bank holds a cautious attitude towards Bitcoin and hopes to launch the digital euro within 5 years.

European Central Bank President Christine Lagarde stated that Bitcoin is a speculative asset that, while fostering some interesting business activities, requires regulation. She hopes to launch a digital euro within five years. Previously, the Governing Council of the European Central Bank discussed whether to advance the digitalization of the euro but has not made a clear decision. However, the latest statement from the ECB leadership suggests that the institution is considering the potential impact of this initiative on the market. The ECB Governing Council noted that the euro system is evolving towards the possible creation of a digital euro.

2. IMF Report: Only 40 Countries Approved to Issue Central Bank Digital Currencies

The International Monetary Fund (IMF) released a report on January 14 stating that despite an increasing number of central banks exploring the possibility of issuing central bank digital currencies ( CBDC ), nearly 80% of central banks worldwide are either not allowed to issue digital currencies under current laws or the legal framework is unclear. The IMF reviewed the central bank laws of 174 member countries and found that only about 40 member countries are legally permitted to issue digital currencies. The IMF emphasized that if a country issues a digital currency, everyone within that jurisdiction must be able to conveniently access that payment system, which could pose certain challenges to financial infrastructure.

3. Russia plans to authorize banks to freeze accounts involved in cryptocurrency transactions.

Russia's new banking regulations will allow financial institutions to freeze the bank accounts of individuals or companies they believe are related to cryptocurrency activities. This rule change is implemented by the central bank and modifies the existing banking code. Under the new regulations, if signs of "digital currency circulation" are detected, commercial banks will have the authority to intervene and block access to the accounts. The Bank of Russia stated that cryptocurrency-related bank transactions typically exhibit "routine and one-way" trading characteristics, which may be flagged as "suspicious transactions" involving "money laundering or terrorist financing." Unless the government decides to intervene, these amendments could be enacted in October this year.

Industry News

1. The BSN Open Permissioned Chain will soon be launched on the official website in China.

The BSN Open Permissioned Chain will officially launch on January 31 on the BSN China official website. The "BSN 2021 Outlook" released by the BSN official outlines its project roadmap:

• Plan to collaborate with multiple international banks and technology companies within 5 years to establish a Universal Digital Payment Network (UDPN) based on the CBDCs of various countries.
• Create more Public City Nodes (PCN), integrate more frameworks, and launch at least 3 new cross-chain protocols.
• Promote private BSN and authorized platforms, with the goal of covering 23 provinces in China by 2021.
• Continue to strengthen cooperation with cloud service providers, framework providers, and portal providers.

2. Bitcoin Core released version 0.21.0, the next version will be named 22.0.

The Bitcoin Core client has released the official version 0.21.0 source code on GitHub, nearly 6 months after the release of the previous major version 0.20.0. The most significant change in version 0.21.0 is the implementation of the Schnorr Signature and Taproot proposals. The next major version will remove the leading 0 from the version number, changing from "0.22.0" to "22.0", and is scheduled to be released on August 1.

3. Mentougou creditors can demand up to 90% BTC compensation

Bloomberg reported that creditors will be able to request that Men Tou Gou compensates them with up to 90% of the remaining BTC. CoinLab stated that investors are not necessarily required to accept this payment in advance and can wait for a settlement concerning Men Tou Gou's lawsuit. If a large amount of BTC obtained from claims flows into the market, it may lead to price fluctuations.

4. Anchorage becomes the first national digital asset bank in the United States.

Cryptocurrency custodian Anchorage has announced that the Office of the Comptroller of the Currency (OCC) has conditionally approved its application for a national trust charter, making it the first federally chartered digital asset bank in the United States. Anchorage is a domestic digital asset custodian that offers an "end-to-end" insurance solution for institutions and investors to store digital assets.

5. Miami's mayor considers investing part of the treasury reserves in Bitcoin.

Miami Mayor Francis Suarez is considering investing part of the city’s treasury reserves in Bitcoin. He stated, "We are looking to diversify our portfolio and hold Bitcoin investments. If I had done this last year, I would have achieved a 200% return." Suarez hopes to make Miami "one of the most crypto-forward and tech-savvy cities in the United States" and is seeking to establish a regulatory framework to make it "the easiest place in the U.S. to conduct crypto business."

6. Osprey Funds launched a Bitcoin trust fund with lower management fees than Grayscale.

Osprey Funds, a subsidiary of REX Shares, will launch the "Osprey Bitcoin Trust (OBTC)" in the over-the-counter market, charging a management fee of 0.49%. Fidelity Digital Assets will provide custody services. The fees for OBTC are about one-fourth of its main competitor, the "Grayscale Bitcoin Trust (GBTC)", which charges 2% and has a value of $28 billion. Qualified investors must purchase a minimum of $25,000 in the Osprey Bitcoin Trust, with a one-year lock-up period before selling on the secondary market.

7. Biden will appoint Gary Gensler as SEC chairman.

Biden will appoint former U.S. Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler as the chairman of the U.S. Securities and Exchange Commission ( SEC ). Sources say the nomination will take place "in the coming days." Gensler is leading Biden's financial policy transition team and is said to have an in-depth understanding of the wide application of cryptocurrency technology.

8. Grayscale resumes most cryptocurrency trust fund subscriptions, dissolves XRP trust

Grayscale Investments has reopened for new investments after a 20-day pause. Currently, the minimum investment limit for BTC is $50,000, while for BCH, ETC, LTC, ZEN, ZEC, and XLM, the minimum limit is $25,000. However, purchases of ETH and XRP are temporarily unavailable. Additionally, Grayscale has decided to liquidate and dissolve its XRP trust in response to the SEC's lawsuit against Ripple.

9. Grayscale Q4 capital inflow reaches a record high, with institutional investors accounting for 93%

Grayscale's Q4 2020 financial report shows that the total inflow of funds for all products in the fourth quarter was $3.3 billion, averaging $250.7 million per week, a record high. Institutional investors accounted for 93% of the total inflow, reaching $3 billion. Among these, over 87% of institutional funds flowed into the Grayscale Bitcoin Trust. The total inflow for the entire year of 2020 exceeded $5.7 billion, more than four times the cumulative inflow of $1.2 billion from 2013 to 2019.

10. Forbes releases the cryptocurrency billionaires list

Forbes has released the latest cryptocurrency billionaire list. The top ranks include:

• Gemini co-founders Tyler Winklevoss and Cameron Winklevoss (each $1.4 billion)
• Bloq co-founder Matthew Roszak ($1.2 billion)
• Venture capitalist Tim Draper ($1.1 billion)
• MicroStrategy CEO Michael Saylor (600 million USD)
• Galaxy Digital founder and CEO Mike Novogratz ($478 million)
• Ethereum founder Vitalik Buterin ($360 million)

The updated list only includes their cryptocurrency investments, unlike the list from February 2018, which also accounted for the value of the entrepreneurs' company shares.