2022 was a whirlwind year for crypto, to say the least.
While the year started off strong, with real technological advancements and excitement about its potential, there were noticeable challenges. Overnight support in the millions to Ukraine, 1 billion donated in COVID relief, and legislative gains in the EU and Asia, were accompanied by headlines around Terra Luna, Celsius, and Three Arrows. At the end of the year, the latestrevelations about FTX and the alleged criminal activity of a small group of people within the company sent massive shockwaves through the entire crypto industry. Given its importance in the space, thecontagion and fallout may not be over.
If there is one message that came across loud and clear, it’s that regulatory clarity is needed – and it’s needed now.
It’s undeniable that Millennials and Gen Z are facing financial challenges that their parents never really experienced. And while there are many reasons, some of the main causes for this generational gap are the soaring real estate prices and the fact that traditional financial assets have become increasingly inaccessible for many within the younger generations.
Sustainability. It has become a loaded topic generally and even more so in the blockchain industry. Unfortunately, the mainstream conversation has led to a lot of misconceptions about blockchain’s environmental impact. Regardless of how familiar one is with the applications of blockchain technology or use cases for cryptocurrency, mentions of blockchain and proof-of-work consensus mechanisms are now synonymous with high energy use—without a parallel focus on the actual value being generated behind the energy use.
Compliance has never been more of a burden on companies and organizations than it is today. This can be explained by several factors, including the rise in volume and complexity of financial crime, more opportunities and incentives to commit fraud or engage in money laundering, and the sheer number of laws and regulations that exist today compared to even 20 years ago, as regulators around the world try to remain one step ahead of bad actors.
It's fair to say that businesses are still uncertain about how cryptocurrencies can benefit their bottom line and/or enhance customer experience. With many consumers still wary of anything blockchain-related, and markets well into our periodic "crypto winter" season, it's understandable that business leaders might wonder what they can expect from digital assets. Well, the good news is we are seeing the move from speculation to utility, and nowhere more is this obvious than with the emergence and meteoric rise of stablecoins.
To say these are rocky times in the crypto sector would be somewhat of an understatement. As the US discourse has become increasingly vitriolic, many fear thatUS innovation across Web3 will be hampered—but what innovation would be missed? There have been too many scams, rug pulls, blind celebrity endorsements, and snake oil salesmen. As Circle’s Jeremy Allaire noted during their Converge conference last year, this is the time to realize a better future for the sector.
