Sovereign states & cryptocurrencies

The Library of Congress (LOC) conducts periodic reviews of countries’ stances on Bitcoin and cryptocurrencies. In November 2021, it identified 103 countries whose governments directed their financial regulatory agencies to develop regulations and priorities for financial institutions regarding cryptocurrencies and their use in AML/CFT. So far, El Salvador is the only country in the world that has declared bitcoin to be legal tender but other states might follow this year. Especially in South America where the population is extremely confident in bitcoin and countries are being tormented by hyperinflation.

Central banks & CBDCs

There are now three live retail CBDCs in the world – in The Bahamas, the Eastern Caribbean and Nigeria – and one coming soon in Jamaica. There are 28 pilots and 68 central banks have communicated publicly about their CBDC work.

Over 70% of central banks have begun exploring the possibility of introducing central bank digital currencies (CBDCs), according to a new paper, commissioned by the Global Financial Markets Association (GFMA), that identifies the GFMA’s critical considerations for the success of potential CBDCs in wholesale markets (wCBDCs). Entitled Central Bank Digital Currencies: A Global Capital Markets Perspective, the report stress that central banks in collaboration with the private sector should continue to explore the role that wCBDCs can play in driving innovati97on and efficiencies in wholesale markets. Also, central banks should take a measured approach in the introduction of wCBDCs and the timeline should be cautious to mitigate any potential transition risk impacting safety and soundness, and financial stability.

wCBDCs are expected to operate alongside legacy instruments and systems, and not to replace them. It is therefore important for wCBDCs to be interoperable with the broader financial market ecosystem.
The use of sandboxes, proof of concept, dialogue with market participants, and pilot programs based on specific use cases will test the application of wCBDCs and help identify the impact on capital markets.
After sufficient analysis of lessons learned, financial institutions and regulators should define a transition period that is reflective of the risks and opportunities, and an effective implementation.

Worldwide crypto-users
In 2021, the number of global crypto owners almost tripled, from 106 million in January to 295 million in December. If we extrapolate a similar rate of increase in 2022, we are on track to reach 1 billion crypto users by the end of 2022.(…) “We expect the number of global crypto owners to reach 1 billion by the end of 2022.” – crypto.com report – Crypto Market Sising

Source: https://triple-a.io/crypto-ownership/

Bitcoin is by far the most well-known and traded cryptocurrency. Exact user figures for Bitcoin are not available, but it is estimated that the global user base of all cryptocurrencies increased by nearly 190 percent between 2018 and 2020 The increase in demographics might have been caused by both a rise in the number of accounts as well as improvements in identification. More accounts in exchanges or wallets became systematically linked to an individual’s identity, which made it easier to estimate the minimum user numbers associated with accounts on each service provider.

How many Bitcoin wallets are there? Blockchain.com wallets, something that makes purchasing Bitcoin possible, reached over 81 million wallet users in 2022.

Crypto as a business

The payments giant Visa said during its earnings call that customers made $2.5 billion in payments with its crypto-linked cards in its fiscal first quarter of 2022. That was 70% of the company’s crypto volume for all of fiscal 2021. Fireblocks, the highest valued digital asset infrastructure provider in the world, said that its customers have amassed $45 billion assets under custody on the platform. Fireblocks is the first company to enable decentralized finance for institutional players. The platform already supports over 800 major institutions.

„The disruption of cryptocurrencies in the financial sector reached the point of no-return and over the next decade every business will become a web 3 business.” – according to Fireblocks

Why is Romania the crypto-country of CEE?

First of all, blockchain technology has already been adopted by the Romanian Government. The IT systems and applications, that were used in the parliamentary elections from December 2020, developed by the Special Telecommunications Service (STS) based on the Decision of the Permanent Electoral Authority (AEP) no. 29/2020, were implemented using blockchain technology.This state-of-the-art complementary solution guarantees the integrity and reinforces the transparency and traceability of the electoral process. Romania is the first EU country to use a voting reporting tool that is based on blockchain technology for national elections – according to Cointelegraph

The Romanian population has a stronger and older love story with blockchain technology, even if they don’t know it, that was born the moment Romanians started buying bitcoin.
According to a study conducted by iSense Solutions back in March 2018, more than half (57%) of Romanians in urban areas have heard of cryptocurrencies. In addition, the study reveals that 8% of Romanian internet users in urban areas have bought cryptocurrencies in the last 12 months. Bitcoin is the most popular digital currency when it comes to purchases – 7% of urban Romanians have bought a Bitcoin in the last 12 months, and 14% intend to buy one in the next 12 months. At that time, four years ago, the study reveals the belief of 30% of respondents that virtual currencies represent the future of means of payment.

One and a half year later, another ING international survey (conducted in September 2019), “From cash to crypto: the money revolution” shows that 12% of Romanians answered positively to the question about having crypto, a higher percentage than the respondents from France or Germany. At that point in time, it seems that Romanians’ interest in crypto was the highest in Europe.

Should banks choose to move into the sector, it’s worth noting that many consumers remain on the fence regarding mixing banking with cryptocurrencies. However, Romanian are among the most open people in Europe (after Turkey) in favor of the idea that banks shoul offer current accounts in cryptocurrecncies.