Aptos Ecosystem Deep-Dive

Welcome back everybody. It’s been another exciting week in crypto and we’re pleased to bring you the next edition of The Blockchain Review. The US Justice Department declared a major international cryptocurrency enforcement action and Genesis’ Crypto lending business has filed for bankruptcy protection, yet so far BTC is holding the line at $21k! …will the pump continue?

This year has got off to a good start with some of those sweet green weeks we’ve been missing for a long time. It’s great to have some of the excitement back but let’s zoom out and consider whether it’s going to be sustainable throughout this year and what the prevailing narratives will be.

One indication that a bear market has come to an end is when the price doesn’t significantly react to bad news. The troubles at Genesis have been known about for several months in what’s a gradually developing situation, so that news could have been priced in already. The Justice Department news was somewhat of a surprise, however some movement from regulators in 2023 had been anticipated.

One of the ongoing narratives this year is therefore likely to be continued clampdowns on decentralized technology and DeFi, what the Justice Department terms cryptocurrency. Along with continued trials of CBDC’s and plans or pilot tests by governments to encourage their use. 

As before we can look to the US to see what their moves are and garner indications on similar policies throughout the western world, particularly the G7. Last year the G7 made announcements urging swift regulation of crypto assets and their desire to have them meet the same standards as the rest of the financial system. 6 months prior the G7 had laid out guidelines for CBDC’s. 

The European Union is also leading on their plans for a Digital Euro and will begin to draft their legislation this month with a proposal for the actual legislation targeted for Q2. The European Central Bank has previously stated that they see stablecoins as a threat. So it’s important that in the crypto industry we continue to try to lead on the narrative of the benefits of decentralized tech as a counterweight to CBDC’s. 

Having a parallel financial system is of course worrying the existing financial system and probably governments who are grappling with how to control it. But ideally the crypto industry will be able to keep going with the narrative of an alternative choice. One for those who value their freedom, privacy and liberty- many of the original Bitcoin values.

The need for regulations to protect normal people from the disasters we saw last year is not the same thing as the need for a government controlled CBDC. We mustn’t conflate the two, because there are distinct benefits for having a system which is free from government control- not to mention all the other use cases such as NFT’s, Metaverse and Digital Identity that are emerging with blockchain technology. 

There’s going to be an ongoing delicate balance between the old systems and the new. It’s like a changing of the guard and there’ll be people with opinions on both sides for a while, but keep going with the creation and active use of all the wonderful new things and eventually we’ll reach consensus on what’s best for the average person.

We’ll always provide you with our research to help with your education. We’ll keep close track of the main developments and evolution of the niches in blockchain so that you get the best of the new knowledge. When you’ve finished reading your report then please remember to fill out the feedback form, your research is valued and we’re always open to suggestions.