As seen in our last blog post, 2021 has been an eventful year for the cryptocurrency ecosystem. But what can we expect for crypto in 2022?
What will happen around crypto in 2022?
First, one of the most highly-anticipated cryptocurrency updates is a new stage towards Eth 2.0. In 2022, the Ethereum network should switch to a proof-of-stake (PoS) consensus. This update, called the “Merge”, is expected in Q1/Q2 2022, according to ethereum.org.
Basically, this update will merge the Ethereum mainnet which uses a proof-of-work (PoW) consensus with the Beacon Chain (deployed in December 2021) which uses a PoS consensus. After the Merge, Ethereum will only rely on a PoS consensus. Therefore, it will make Ethereum more sustainable and eco-friendly since the PoS consensus is less energy-consuming. Also, it will be another step toward the full transition to Eth 2.0.
The main goal of Eth 2.0 is to make the network “more scalable, more secure, and more sustainable”. In 2021, the network’s fee calculating system changed to make fees less volatile, solving a long-term problem faced by Ethereum users.
NFTs and the metaverse
Second, the NFT craze should keep going this year. Indeed more and more individuals are using NFTs. And organizations too are taking interest in them. For example, Samsung announced just this week that its next generation of TVs will support NFTs, and allow users to discover, purchase and trade digital artworks on a native platform.
Also, NFTs will play a huge part in the metaverse, both of which should massively develop in 2022. For example, Square Enix’s president, an entertainment and video game company, reckons that 2021 was just the beginning of NFTS and metaverse and announced the company will be following these trends very closely.
With that said, The development of NFTs and the metaverse should influence the global adoption of cryptocurrencies. Indeed, they are increasingly popular among companies and financial institutions. For example, according to We Wealth, Italian bank Banca Generali should allow its private customers to buy cryptocurrencies directly with them through Coino, which the bank invested in. Stablecoins should also gain popularity.
A growing adoption also means growing crypto markets. This is why we could also expect new all-time highs for Bitcoin. Indeed, in 2021, Bitcoin broke 3 all-time highs, reaching the latest one in November at more than $67,000. With the increasing adoption of cryptocurrencies from all parts of society, the public, corporations, and governments, we will surely witness growing crypto markets and inflating prices.
What about crypto regulations in 2022?
As it has been the case in 2021, there should be some developments around crypto regulations worldwide in 2022. For example, the next government to update its crypto regulation should be Estonia, which should amend its AML Act next month. Estonia’s Ministry of Finance explains in an FAQ that the government approved the draft bill in December and should come into force in the first half of 2022.
The regulation will bring stricter obligations on VASPs. For instance, VASPs will not be able to open online virtual accounts and are obliged to identify their customers. Also, the ministry put emphasis on the fact that anonymous services should be considered riskier and that VASPs should apply real-time transaction monitoring solutions.
Moreover, there should be more developments around the MiCA regulation. Indeed, in 2020, the European Commission proposed a regulation on Markets in Crypto Assets (MiCA). MiCA is aimed to regulate cryptocurrency service providers providing services in or into Europe. The goal is to bolster consumer protection, transparency, and governance standards. The law will also regulate stablecoins. However, central bank digital currencies (CBDCs) will not fall under the scope of the regulation. This year, there should be more updates about the regulation that could be implemented already in 2023.
Then, we can expect to see more and more governments working on their own digital currency. For instance, China announced that its digital yuan, e-CNY, could launch as soon as February after successfully going through pilot phases. Besides, Jamaica also announced that the rollout of its CBDC should take place in Q1 2022.
Other governments are still actively working on CBDC projects. After reporting the results of its pilot test, Kazakhstan should decide in late 2022 whether the CDBC will be launched. Also, France, Mexico, and Thailand should complete their CBDC rollout in the next years.
Finally, it is likely to see other governments adopt cryptocurrencies as legal tender just like El Salvador did in 2021. The country’s president, Nayib Bukele tweeted that he believed 2 more countries would adopt Bitcoin as a legal tender in 2022.
We are always keeping a close watch on regulations updates over the world. Also, we regularly publish regulatory guidance for cryptocurrency compliance. Head over to our regulation page to learn more.
What about Scorechain in 2022?
2021 has been an incredible year for Scorechain. We more than doubled our headcount last year which will allow us to better develop the product to meet the market’s evolving needs.
This is why we plan to release support for highly requested blockchains in 2022. Besides, we also expect to release a platform update and keep pushing for new crypto risk-AML tools. Stay tuned!
So, crypto in 2022. It will definitely be the year of crypto compliance as more regulations are to be put in place this year. Are you looking for tools to help your team better implement AML processes on cryptocurrencies? Don’t hesitate to contact us for a free demo.
Scorechain is a Risk-AML software provider for cryptocurrencies and digital assets. As a leader in crypto compliance, the Luxembourgish company has helped more than 200 customers in 40 countries since 2015, ranging from cryptocurrency businesses to financial institutions with crypto trading, custody branch, digital assets, customers onboarding, audit and law firms, and some LEAs.
Scorechain solution supports Bitcoin analytics with Lightning Network detection, Ethereum analytics with all ERC20 tokens and stablecoins, Litecoin, Bitcoin Cash, Dash, XRP Ledger, Tezos, and Tron with TRC10 and TRC20 tokens. The software can de-anonymize the Blockchain data and connect with sanction lists to provide risk scoring on digital assets, transactions, addresses, and entities. The risk assessment methodology applied by Scorechain has been verified and can be fully customizable to fit all jurisdictions. 300+ risk-AML scenarios are provided to its customers with a wide range of risk indicators so businesses under the scope of the crypto regulation can report suspicious activity to authorities with enhanced due diligence.