The crypto space has expanded quite a lot ever since the bear market ended. The increase in prices not only garnered the attention of retail investors, but startups also saw the opportunity for their launches. Big names like Facebook and Telegram have publicized their projects and are set for their launches soon.
Not only big names of the industry but countries as a whole are working on making their own currencies. China, Bahamas, and others are entering the digitized domain by bringing in their fiat-backed digital currencies to make digital and cashless financial systems. Countries are educating themselves on the use cases presented by crypto and how their financial systems can benefit from these currencies. Resultantly, regulatory authorities are working on making policies and regulations to contain any potential threat of illicit activities that can happen.
All this talk about regulations and digital fiats have taken the attention of people away from bitcoin, ETFs and other previously talked about topics in the crypto space. Countries like China are making their own financial system digitally but they are still not welcoming of Bitcoin. Similarly, other countries also believe that bringing in a currency that has a system of its own might disrupt their existing financial systems and open them to threats of terror financing, money laundering, and other illicit activities. This has put most countries in a sort of competition where they want to make the first move to shift their financial systems into digital domains while also keeping a close eye on the pros and cons of these digital currencies, prompting the regulators to dive fully into these assets.
Mark Zuckerberg is also making attempts to bring Facebook’s first digital currency into the game which would make the US the leaders of innovation in the world but is facing a serious setback by Congress and the SEC who believe that before a stablecoin is launched on such a large scale, all the privacy questions should be answered and a clear policy should be presented so that there are no controlling authorities yet the currency is regulated so that the country doesn’t see another Cambridge Analytica event.
The competitiveness has shifted the focus of institutions and governments away from once the most prestigious crypto to innovation and bringing in use cases for digital currencies. Another point to be noted is that both of these currencies are different animals altogether, one being a store of value, other being made for the purpose of transactions and replacing fiat. This might also be the reason why governments are keen on building financial systems based on their own fiat-backed currencies while they are still not comfortable with bitcoin entering their systems.