The current year for the Russian cryptocurrency market began with a slight fever. At the end of January, news appeared in the media that the FSB was almost in favor of a complete ban on cryptocurrencies in the country. A little later, in its annual report, the Central Bank voiced a similar position.
However, the government quickly denied the existence of any final decision on the regulation of the crypto market. The Ministry of Finance assured that no one would ban the circulation of cryptocurrencies, although the market is waiting for quite serious regulation.
One way or another, it seems that Russia is still far from a full-fledged law on cryptocurrencies. But in 2022, there are enough other events to pay attention to. RTVI, together with Currency.com crypto platform expert Mikhail Karkhalev, chose the main ones.
Fed monetary policy
The main economic “expectation” for 2022 is the monetary policy of the world’s leading central banks, primarily the US Federal Reserve. The behavior of the global market also depends on the increase in rates of this mega-regulator.
With the tightening of the Fed’s key rate policy, investors will withdraw capital from risky assets – stocks and cryptocurrencies – into “live” money and reliable assets: bank deposits and bonds, the rates for which will grow.
Do not forget about corporate assets. If investors are not in a hurry to get out of stable companies like Google, Microsoft or Apple, then high-tech startups, whose rapid growth is largely tied to emotions and hype, can take money quickly enough. And in such a scenario, the crypto market will fall under the distribution.
It is not yet known exactly how many times the Fed will raise the key rate in the US against the backdrop of a significant increase in inflation. If at the end of last year there were three increases in 2022 and three in 2023, now the market believes that the rate can be raised up to five times.
NFT gains momentum
Any hype technology is hype because there is demand and interest from the community for it. But in the case of NFTs, it’s not just about demand fueled by pure interest: as early as last year, the technology of non-fungible tokens showed that the range of its application is very wide.
“[Technology] NFT has opened up the opportunity for many people to essentially get rich out of the blue.And since something can be monetized, it means that it will only flourish. We are definitely talking about a revolution, for example, in the world of media: music, cinema, art, and so on,” says Mikhail Karkhalev.
Technology can also be useful in more “mundane” issues: for example, in jurisprudence. It will be possible to make a will in the form of an NFT, it will exist in a single copy, and no one will be able to challenge it or claim that it is a fake. The same applies to any other legal transactions: contracts, agreements, etc.
So for 2022, the potential of NFT is huge, and the global market has just tasted it. At the end of last year, one of the largest gaming studios, Ubisoft, announced the launch of its own NFT marketplace, where you can trade unique items from the popular games of the IT giant.
According to Mikhail Karkhalev, the “second coming” of Ethereum is a global event, but a long-term one. Co-founder of the altcoin Vitali Butlerin recently stated that Ethereum 2.0 is barely half ready, and by the end of 2022 it will be only 80% ready.
“[Butlerin] said several times that the very concept of Ethereum 2.0 is not entirely correct. This is the same ”Ethereum”, which is simply updated and developed. And even if there are some important updates in 2022, I don’t think they will cause a huge surge of interest. There were hard forks before that, but they didn’t have a strong impact on the coin’s rate even at the moment, ”explains Karkhalev.
Big politics and “world government”
The events of January in Kazakhstan, although they “cheered up” the crypto market for some time, did not have global consequences. Even if we assume that hostilities begin in the country and citizens begin to invest money in cryptocurrencies in the hope of maintaining their savings, this should have little effect on the market.
But there is another important event that is worth taking a closer look at, the RTVI interlocutor believes. This is the annual conference of central banks in the US Jackson Hole, which is scheduled to take place at the end of August.
“There is such an interesting moment. On the eve of the next change in the monetary system, the leaders of world economies always gather and somehow discuss the end of the current system and the prospects for a new one. For example, in 2008, against the background of the global economic crisis, the G20 met (G-20 summit – Ed.). And in 2009, bitcoin appeared,” notes Karkhalev, calling these events “a coincidence in the spirit of conspiracy theories.”
According to him, it is possible that at the summit in Jackson Hole, the heads of world central banks will discuss the next update of the international monetary system. For example, digital currencies, which all major world economies talk about in one way or another.
“China has its own digital yuan, the US plans to work on a digital dollar, and in Russia there are such rumors about the digital ruble. All countries are thinking about creating their own digital currency in order to compete with private crypto-coins. Perhaps just in August this will be discussed. Then it would be a grand event, ”concludes the expert.
There is no list of all regulatory rules yet, but the main thing is that cryptocurrencies will not be banned in the country. According to various estimates, the “regulation” of crypto can bring hundreds of billions of rubles a year to the Russian budget.
Firstly, it will allow to retain capital within the country. People use crypto as a source of income, convert it into rubles and spend it here in Russia. So why lose an additional source of income to the budget?” Karkhalev explains.
The most likely scenario looks like this: the Ministry of Finance will approve certain market rules, enshrine them in the form of a law, and impose control over cryptocurrency operations on large banks and other financial organizations. The market for brokerage services, for example, is structured in a similar way.