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2022 may have been a wild ride for cryptocurrency but that doesn't mean those keen to dip a toe into the water should be retreating in fear.
Like a thrilling rollercoaster there were ups and downs that hit the headlines, from the much-anticipated Ethereum merge to volatility in the price of Bitcoin. You might have also heard about the crypto billionaire who became a fugitive, while other cryptocurrencies like TerraUSD and Luna collapsed.
But, while last year turned out to be a largely challenging one for the digital asset market after a previous period of exponential growth, 2023 still holds plenty of opportunity, says Charis Campbell, Corporate and Partnership Manager of Binance Australia, the local arm of the world's largest crypto exchange by measure of trading volume.
"2022 was a tumultuous year in crypto but looking forward there is still strong momentum," she said. "We are still building and the communities are still strong - there are still many opportunities."
While cryptocurrency has been publicly available for more than 14 years and has continued to gain popularity with investors, for many people its still a bit of a mystery. However, the high-profile events of last year have no doubt raised awareness about what it's all about.
And Ms Campbell believes 2023 can offer new hope for builders and users alike at a particularly interesting time for the sector as governments around the world grapple with how to regulate the industry.
Here are some of her predictions about what's ahead this year.
Identity is a hotly-contested subject in crypto sparking plenty of debate. In 2022, non-transferable tokens or so-called soulbound tokens started to gain momentum as part of strategies to help reduce default risk in the sector.
Soulbound tokens (SBTs) are digital identity tokens that represent the traits, the features and achievements of that person or entity that could be used to identify them as a "safe source".
"SBTs are issued by 'souls' which represent blockchain accounts or wallets and they can't be transferred," she said. "Identity is the clear use of case of SBTs. There is the thought that you can use them as your identity because you would have this Soulbound token attached to you.
"Right now over-collaterised lending isn't too appealing compared to existing legacy finance but you can't have under-collaterised lending without major default risk unless you leverage identity."
While Ms Campbell predicts the big players will continue to dominate the non-fungible tokens (NFTs) market, she also expects an expansion of other players in 2023.
"We'll most likely see the big ABCs, the Art Blocks, the Bored Ape Yacht Club, the Crypto Punk Eco Systems continue to dominate trading volumes in the NFT world," she said.
"However, for the crypto industry to really mature we're hoping we continue to see the integration of NFTs into real world assets in 2023 - loyalty programs, real estate, art are all obvious examples.
"And the industry saw some breakthroughs in 2022 with the most notable being Maker Dao's accumulation of $600 million in real world assets as collateral."
The move in 2022 for big brands like Disney, Adobe, Reddit, Adidas, Starbucks and Prada getting involved in NFTs is also a good sign, said Ms Campbell.
"I have a special eye on Starbucks Odyssey and Nike Swoosh NFT efforts which are setting the benchmark for more big brands to join in 2023," she said.
There is huge focus this year on the regulatory steps countries around the world are planning in response to the growth of crypto.
Ms Campbell said many countries are watching the European Unions much-debated Markets in Crypto-Assets (MiCA) Regulation and the Transfer Funds Regulation (TFR).
"There are a lot of eyeballs on regulation," she said.
"It's expected the MiCA regulations will be formally accepted in 2023 and be going into effect in 2024. All legislators will be looking at Europe as a test case for drafting their own country's legislation."
Locally, the Reserve Bank of Australia has launched a digital currency pilot project in collaboration with the Digital Finance Cooperative Research Centre to assess the potential of a central bank digital currency (CBDC) in Australia.
As well, the Australian Government has released its Token Mapping Consultation Paper as part of its process to develop a regulatory framework around crypto assets. Released on February 3, stakeholders have until March 3 to submit responses.
"The consultation paper will give an insight into how certain crypto assets should be regulated alongside frameworks for company licensing and ASIC custody and consumer protections," said Ms Campbell.
"Binance Australia will be participating and it's the responsibility of all major players to collaborate with policymakers and regulators and contribute to the development of the framework.
"It's definitely a significant year. Looking at Europe and Australia there is a lot of consultation and pilots taking place."
Binance is the world's leading blockchain ecosystem, with a product suite that includes the largest digital asset exchange. Its platform is trusted by millions worldwide, and features an unmatched portfolio of financial product offerings. It includes Binance Academy, an open-access learning hub providing free blockchain and crypto education. Find out more at www.binance.com
This information is of a general nature only and should not be regarded as specific to any particular situation. This should not be taken as financial advice to buy, trade, or sell cryptocurrency or use any specific exchange. This is not intended for use as investment, financial or legal advice as each individuals need will vary.
This is branded content for Binance Australia.