2020 gave the world a hard time indeed. But Santa has made it up and brought the best Christmas present crypto enthusiasts could ever wish for: Bitcoin price hit it’s new all-time high of $25,000. Popping champagne and getting ready (optimistically, still!) for the new year, let’s take a look at top trends for blockchain in 2021.
Regulation and tax
With new crypto prices going to the moon, as well as cutting edge tech advancing at high pace, regulators around the world are creating a new environment and legal framework for it. It won’t be easy, however, for both regulators and blockchain and crypto companies.
Coincidence or not, the US regulators decided to go almost all-in before the end of the year. Soon-to-be-replaced Treasury Secretary Steven Mnuchin has confirmed rumours about his team rushing to close «anti-money laundering regulatory gaps»: FinCEN introduced new rules on transactions involving cryptocurrency wallets, i.e. for exchanges and custodians. New regulations have been met quite coldly in the crypto community.
Moreover, the Securities and Exchange Commission (SEC) had decided to file a lawsuit against blockchain payments network Ripple. Consequently, the fourth largest cryptocurrency, XRP, saw a 60% drop in the value of the token once the news became public.
At the same time, 2020 saw ground-breaking developments in crypto taxation, with more tax guidance provided by authorities for mining, or capital gains. PwC’s Global Crypto Tax Report shows that this list is ready to be extended: with DAOs, crypto loans, etc.
Stablecoins and CBDCs
2020 has been a year of stablecoins. The total value of stablecoins surpassed $20 billion in the Q3, Facebook has rebranded its much anticipated Libra project and renamed the coin to DIEM. Stablecoins are about to be used more for cross-border transactions, and already work well for remittances in Latin America, according to Chainalysis.CBDCs got their minutes of fame in 2020, too: Chinese digital currency DCEP is being actively tested in real life, and the Bank for International Settlements says 10% of central banks claim to be likely to issue a CBDC within three years, and 20% within six years.
Blockchain and tech
In the tech field, 2021 is expected to bring more AI and big data to the table. Blockchain is going to be adopted even more, as businesses and enterprises get to know this technology better. AntGroup forecast is echoing this trend: «As more companies digitalize their operations to mitigate the impact of the pandemic, they will increasingly turn to blockchain to help facilitate trust in an ever-evolving world.»«2021 is going to be one of our best years» says Charles Hoskinson, CEO, Input Output (IOHK) & Founder, Cardano (ADA), pointing that it’ll bring improved scalability and security, as well as new hybrid type of governance to blockchain networks.
Want to learn more about 2021 predictions from the brightest minds of the industry? Tune in Hong Kong Blockchain Week Welcome event and check forecasts from experts.
Happy New Year!