Blockchain and Cryptocurrency News Roundup

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  • January 25, 2021
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25 January 2021.

Dive into a short summary of some of the biggest headlines in Crypto this week. Beijing, Shanghai to join wider testing of the digital Yuan in 2021, treasury secretary nominee Janet Yellen plans to encourage a legitimate crypto use, Ethereum will become the main asset for investors in 2021 & Coinbase to sell stock on the private market ahead of IPO.

Beijing, Shanghai to join wider testing of the digital Yuan in 2021

China’s biggest cities are planning to hold pilots to promote the use of the country’s central bank digital currency (CBDC) this year. According to a report from Chinese state media outlet Global Times on Sunday, Beijing’s mayor said the capital will hasten development of “demonstration zones” for fintech and professional services over 2021. That effort will include promoting a pilot application for the CBDC, officially called Digital Currency Electronic Payment (DCEP). Shanghai’s mayor made a similar pledge to promote the digital currency, per the report. In Guangdong Province, authorities are to support Shenzhen’s development as an “innovative pilot zone” for the digital yuan, its governor said. All three statements were made on Sunday.

Shenzhen has just announced its third trial of DCEP, allowing the public to get their hands on the electronic cash via lottery-like giveaways. The report cites “industry observers” as saying the announcements mark a bigger push to promote the digital currency before a launch in the “near future.”


Treasury secretary nominee Janet Yellen plans to encourage a legitimate crypto use

President Biden’s pick to lead the United States Treasury Department, Dr. Janet Yellen thinks crypto has the potential to enhance the financial system and wants to encourage its legitimate use-cases. President Joe Biden has nominated Janet Yellen as Secretary of the Treasury, and while her comments on cryptocurrency last week appeared to be negative—the former Federal Reserve chair has revealed that she sees great potential in the nascent digital asset class. Yellen initially said that the US needs to examine how it can curtail the use of crypto for illicit financing which she explained was its main use during her Senate confirmation hearing last week, She made the comments in response to a question from Sen. Maggie Hassan (D-NH) who asked about the potential for cryptocurrency to be leveraged in financing criminal and terrorist activities. While it appeared that Yellen was destined to be another old-world cryptocurrency opponent, a written statement published on the Senate Finance Committee website today indicates that the incoming Secretary of the Treasure may have a more positive view on the potential for crypto to reshape the United States financial system. In her statement, Yellen did again state the need for the US to confront the use of illicit activities leveraging crypto, this time she added that she also plans to encourage legitimate leveraging of digital assets. The former Fed Chair wrote: “I think it important we consider the benefits of cryptocurrencies and other digital assets, and the potential they have to improve the efficiency of the financial system.” Yellen added: “I think we need to look closely at how to encourage their use for legitimate activities while curtailing their use for malign and illegal activities. If confirmed, I intend to work closely with the Federal Reserve Board and the other federal banking and securities regulators on how to implement an effective regulatory framework for these and other fintech innovations.” The overall outlook of Yellen appears quite bullish for cryptocurrency, as a regulatory framework for Bitcoin and digital assets would give much needed concrete legitimacy to the nascent crypto sector. The Senate Finance Committee will hold an official vote on Yellen’s nomination tomorrow, after which it will go to the Senate chamber. If confirmed, Yellen would also be the first woman in history to serve as the United States Treasury Secretary.

Ethereum will become the main asset for investors in 2021

The potential of Ether greatly exceeds Bitcoin, and the community is beginning to understand the value of ETH. During the second half of 2020, we saw a growing interest in cryptocurrencies from institutional investors and big capital. However, all the attention of the whales, as well as all the attention of the public, was fixed on Bitcoin (BTC). Today, we will look at why Ether (ETH) is a more attractive asset and why this cryptocurrency should become the “first cryptocurrency” for every investor. Let’s start with the numbers: ETH’s growth since its March 2020 low after the coronavirus-induced market crash has been 1,200%, whereas BTC has only grown around 700%. ETH’s growth since its March 2020 low after the coronavirus-induced market crash has been 1,200%, whereas BTC has only grown around 700%. Of course, against the backdrop of record highs for Bitcoin, whose price reached $ 40,000, the rise of Ether to $1,400 does not seem so impressive. Moreover, the market capitalization of ETH is five times less than the volume of the BTC market. But what is more important for an investor: nice numbers and records of an asset from a portfolio or high income? There are very strong reasons to believe that Ether will continue to rise in price in 2021 and bring more profit to investors than the “most famous cryptocurrency,” Bitcoin. Ethereum is the number-one platform for building blockchain projects and launching decentralized applications. The chart below displays the number of unique ERC-20 tokens traded during the first years since the launch of the Ethereum network. And despite the fact that the rate of expansion of the market for blockchain startups has slowed down since the initial coin offering bubble burst in 2018, their total number is still growing.

And even despite the fact that Ethereum has serious competitors — such as Tron, Polkadot, Cardano, Cosmos and Tezos — Vitalik Buterin’s cryptocurrency platform continues to be a leader in this direction. During 2020, more than $1 trillion worth of transactions were recorded on the Ethereum blockchain. These figures exceed the transaction volume of payment giants like PayPal, which is used by over 350 million users and has average volumes that do not generally exceed $200 billion per quarter. Also, keep in mind that each transaction generates network fees paid in ETH. And since the network’s growth rates are still high, we can confidently expect the continuation of the “bullish” trend of ETH. In any case, interest in cryptocurrency is increasing, as is the number of active wallets, the number of transactions on the network and the average transaction size. Despite Bitcoin’s leadership in the cryptocurrency market, Ethereum remains the leader of the young decentralized finance industry. Highly popular in the summer of 2020, DeFi lending and staking projects continue to grow, attracting new investments. The total value locked in decentralized finance since the beginning of 2020 has grown nearly 3,300%, from $687 million to $23.2 billion. And it is Ethereum that is the main platform for the creation and launch of most new DeFi projects and stablecoins. The emission of stablecoins is constantly growing, as digital assets backed by the value of less-volatile fiat currencies are a very convenient tool for quick settlements between users, for forming trading pairs on crypto exchanges and for saving capital from high volatility in your crypto wallet.

Separately, we should talk about the interest of institutional investors in decentralized finance. While the chaos in the DeFi market nearly eroded institutional confidence in the potential of blockchain in the financial sector in the summer of 2020, public companies continue to show interest in the new asset type. In August 2020, Archax and Algorand revealed plans to develop tools for introducing DeFi among institutions. And in the fall of 2020, it became known that xSigma, a subsidiary of the Nasdaq-traded ZK International, is working on the development of DeFi services and is preparing to launch a decentralized exchange for trading stablecoins. We all remember what big investors’ attention to Bitcoin led to last year, right? Now, it looks like other areas of the cryptocurrency industry are in for the same, and some of them are directly related to Ethereum. And the main advantage of Ethereum lies in the versatility of its technology and its growing community.


Coinbase to sell stock on the private market ahead of IPO

Secondary markets typically allow current and former employees, as well as other vested shareholders, to sell stock ahead of a public offering. Coinbase will hold a secondary market for its private stock on the Nasdaq, according to reports. The exchange informed shareholders that they would receive further details about the sale on Monday,  The Block reported today. Secondary markets typically allow employees, former employees and others who hold stock in a private company to sell some portion of their vested shares in advance of a public offering.  

Coinbase, the largest crypto exchange in the US, in December filed a registration for an Initial Public Offering (IPO) to the US Securities and Exchange Commission (SEC). A date for the offering has yet to be set. Coinbase has had a good past 12 months. The exchange said in its year-end report that it now has $90 billion in digital assets on its platform. The company has embraced regulation and tried its best to get in the good books of lawmakers: most privacy coins (sometimes associated with crime) are unavailable on the platform and it has a strict Know Your Customer (KYC) policy. In December 2020, crypto market analysis firm Messari valued the exchange at $28 billion.


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