Crypto newsletter: Downward momentum hits pause

 

This week we saw declines in the cryptocurrency market as the major coins followed the stock indices. However market rebounded strongly yesterday, pointing that we are still in a bull market. Some altcoins such as Chainlink and Synthetix surged 20% in the last 24 hours. Meanwhile Bitcoin, Ethereum and Ripple also moved higher and are now close to their major resistance levels. Bitcoin's market dominance rose to 58.6%. The capitalization of all digital assets in circulation increased to 336 billion, while an average daily trading volume is registered at $91 billion.

EU has proposed a digital financial package

European Union has adopted a “Digital Financial Package” with the aim of creating a single market for digital financial services and “modern payments” in the region. The package consists of 5 areas and one of them is devoted to new legislation for crypto assets called MiCA. The regulation recognizes the need to provide legal clarity for crypto assets and its issuers to drive innovation in the region. At the same time, the legislation provides protection and “financial stability” for investors. In that sense, the proposal indicates the new requirements that crypto assets operators will have to comply with. The new rules will allow operators authorized in one Member State to provide their services across the EU (“passporting”). Safeguards include capital requirements, custody of assets, a mandatory complaint holder procedure available to investors, and rights of the investor against the issuer. Crypto exchanges must have a physical presence in the European Union and must obtain prior authorization from a “competent national authority” to start providing their services. In addition to the above requirements, providers of crypto services must pass a test on their technological capabilities. This will ensure that consumers are protected against cyber theft and other security breaches.

The startup Optimism introduces new testnet to solve Ethereum's network scaling issues

Over the past few months, the Ethereum network faced heavy congestions and soaring transactions costs due to growth of the decentralized finance (DeFi). Users are waiting for Ethereum 2.0, a major network update that is supposed to resolve the scalability problems. Developers expect to start rolling out the solution by the end of the year; however, many ETH-based projects cannot wait that long. Luckily startup Optimism launched Optimistic rollups, a limited version of its testnet to improve the Ethereum scalability.  It is supposed to allow to scale Ethereum network up to 2000 transactions per second. The decentralized cryptocurrency exchange Synthetix is the first project registered with the testnet and users willing to participate in the tests will receive 200,000 SNX. Also Uniswap and Chainlink expressed their willingness to participate in the project.

 

Russian telecom regulator Roskomnadzor has added Binance cryptocurrency exchange to the register of platforms disseminating prohibited information due to distribution of data related to the acquisition of digital currencies like Bitcoin. Binance — the world’s largest cryptocurrency exchange -emphasized that it had never received any notifications or warnings from state authorities or law enforcement authorities. At the moment Binance website and services are still available for the Russian users.