Regulatory Dynamics

1. The President of the European Central Bank stated that Bitcoin is a speculative asset and requires regulation.

European Central Bank President Lagarde recently stated that Bitcoin is a speculative asset, which, while facilitating some interesting business activities, requires regulation. She hopes to launch a digital euro within five years. Previously, the European Central Bank's Governing Council discussed whether to advance the digitalization of the euro but has not made a clear decision. However, the latest statements from the ECB leadership suggest that the institution is considering the potential impact of this move on the market. The ECB Governing Council noted that the euro system is moving towards the possibility of creating a digital euro.

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

The latest report from the International Monetary Fund ( IMF ) shows that an increasing number of central banks are exploring the possibility of issuing central bank digital currencies ( CBDC ). However, nearly 80% of central banks worldwide either do not have the legal authority to issue digital currencies or have unclear legal frameworks. 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 emphasizes 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 may allow financial institutions to freeze the bank accounts of individuals or companies they believe are related to crypto activities. This rule change is implemented by the central bank and modifies the existing banking code. According to the new regulations, if there are signs of "digital currency circulation," commercial banks will be able to intervene and block access to accounts. The Bank of Russia stated that cryptocurrency-related bank transactions typically exhibit "routine and one-way" characteristics and may be flagged as "suspicious transactions" involving "money laundering or terrorist financing." Unless the government decides to intervene, the amendment may be issued in October this year, but the likelihood of that happening at this stage is low.

Industry News

1. BSN China will launch an open permissioned blockchain.

The BSN Open Permissioned Chain will officially launch on January 31 on the BSN China official website. BSN recently released the "2021 Outlook" outlining its project roadmap, planning to collaborate with multiple international banks and technology companies over the next 5 years to establish a universal digital payment network based on the CBDCs of various countries (UDPN). BSN will also create more public city nodes (PCN) and integrate more frameworks, launching at least 3 new cross-chain protocols. BSN China will have 150 PCNs and 30 portals; the number of PCNs for BSN International will reach approximately 50, distributed across 10 countries/regions. Meanwhile, BSN will complete the integration of all major global permissioned frameworks, and BSN International will finish the integration of 30 public chain frameworks.

2. Bitcoin Core released version 0.21.0 officially, 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 Schnorr Signature and Taproot-related proposals. According to the current plan, the next major version will remove the leading 0 from the version number, changing from "0.22.0" to "22.0", scheduled for release on August 1.

3. Mentougou creditors may receive up to 90% BTC compensation.

According to reports, creditors will be able to request that Mentougou compensates up to 90% of the remaining BTC to the creditors. In addition, there are indications that investors are not necessarily required to accept this payment in advance and can wait for a settlement regarding the lawsuit against Mentougou. 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 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 U.S.-based digital asset custodian focused on providing an "end-to-end" insurance solution for institutions and investors to store digital assets. It is reported that Anchorage's trust company division applied for the charter with the OCC last November, aiming to become a digital asset bank.

5. The mayor of Miami is considering investing part of the treasury reserves in Bitcoin.

The Mayor of Miami, Francis Suarez, is considering investing a portion of the city’s treasury reserves into Bitcoin. In an interview, 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." Francis Suarez expressed his desire to make Miami one of the "most crypto-forward and tech-savvy cities in the U.S." To this end, the city is seeking to establish a regulatory framework to make it the "easiest place in the U.S. to do crypto business."

6. Osprey Funds launched a Bitcoin trust fund with management fees lower 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 approximately one-fourth of its main competitor, the "Grayscale Bitcoin Trust ( GBTC )," which charges 2% and has a value of $28 billion. The minimum investment for qualified investors to purchase the Osprey Bitcoin Trust is $25,000. Before being sold on the secondary market, the trust has a one-year lock-up period. Osprey Funds CEO Greg King stated that the company expects to try to shorten this period to 6 months.

7. Biden will appoint Gary Gensler as SEC Chairman

Biden will appoint former Commodity Futures Trading Commission ( CFTC ) Chairman Gary Gensler to be the Chairman of the Securities and Exchange Commission ( SEC ). According to insiders, the nomination will take place "in the coming days." Previously, there were reports that Biden considered appointing Gary Gensler as Deputy Secretary of the Treasury. Gensler is leading Biden's financial policy transition team. It is reported that Gensler has a deep understanding of the wide application of cryptocurrency technology.

8. Restore grayscale purchases for cryptocurrency trust funds except for ETH and XRP, and dissolve the XRP trust.

Grayscale has announced that qualified investors can now purchase fund shares online. This means that after a 20-day suspension, Grayscale is once again open to accepting new investments. Currently, Grayscale has disclosed new subscription data, with a minimum limit of $50,000 for BTC, and a minimum limit of $25,000 for BCH, ETC, LTC, ZEN, ZEC, and XLM, while ETH and XRP are temporarily unavailable for subscription.

In addition, Grayscale Investments announced that it has decided to begin operating under the regulatory policy of the U.S. Securities and Exchange Commission ( SEC ) regarding Ripple, officially liquidating and dissolving its XRP trust, Grayscale XRP Trust. Previously, the U.S. SEC decided to file a federal court lawsuit against Ripple on December 22, 2020, stating that XRP is a "security" as defined by federal securities laws.

9. The total capital inflow of Grayscale's Q4 products reached $3.3 billion, with institutional investors accounting for 93%.

The digital asset management company Grayscale Investments has released its financial report for the fourth quarter of 2020. The report shows that the total inflow of funds for all of the company's products in the fourth quarter was $3.3 billion, averaging $250.7 million per week, marking the largest quarterly inflow in history. Among these, institutional interest in digital assets continued to grow, with institutions accounting for 93% of the total inflow, reaching $3 billion. At the same time, over 87% of institutional funds flowed into the Grayscale Bitcoin Trust, the highest proportion since the second quarter of 2017. Additionally, Grayscale's total inflow for the year 2020 exceeded $5.7 billion, more than four times the cumulative inflow of $1.2 billion from 2013 to 2019.

10. Forbes Releases Cryptocurrency Billionaires List

Forbes has released its list of cryptocurrency billionaires, with data collected up to January 11 at 21:00. The top rank goes to Gemini co-founders Tyler Winklevoss and Cameron Winklevoss, each with an estimated cryptocurrency net worth of $1.4 billion. Next is Matthew Roszak, co-founder of blockchain startup Bloq, with $1.2 billion(, Bitcoin supporter and venture capitalist Tim Draper with $1.1 billion), MicroStrategy CEO Michael Saylor with $1.6 billion(, Galaxy Digital founder and CEO Mike Novogratz with $1.478 billion), and Ethereum founder Vitalik Buterin with $1.36 billion(. It is reported that the cryptocurrency billionaire list from February 2018 calculated the value of the entrepreneurs' company shares and cryptocurrency investments. The updated list only includes their cryptocurrency investments.

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