2022 was a depressing year for the crypto space amidst scams, rug pulls, hacks, and many other activities by bad actors that tried to cripple trust in the industry completely. Market sentiment has been relatively low, which has hampered the rapid progression made by blockchain.
It’s important to look at some key projections at the start of the new year, 2023, and understand how the market will transform and evolve.
It wasn’t all negative and grim for the space in 2022. We saw blockchain adoption and usage grow across different industries. Big names in the Banking and Finance industry, like JPMorgan, performed their first blockchain transaction on the Polygon chain, and a lot more increased their blockchain investment in 2022.
Despite the state of the market, several patterns are emerging that can bring some much-needed respite for the space through 2023. Read on to find out about some exciting predictions for the year 2023.
2023 could be decisive for crypto as regulators worldwide are proposing stricter and increased regulation, which could compromise the decentralization that has been a driving force behind their success.
The cryptocurrency communities have responded by opposing these regulations and advocating for the preservation of their independence. The outcome of this battle between the industry and regulators will shape the future of cryptocurrency.
This year is poised to be filled with political wrangling and unexpected alliances as industry players and regulators seek a mutually acceptable resolution in what is perceived as an ideological conflict.
Although, the crypto space can’t avoid the regulatory hammer for long. The fallout from so many centralized entities collapsing means that the trust built until 2022 will crucially need to be regained in the new year and onwards. The recent hearing on the collapse of FTX by the U.S. House Committee on Financial Services indicates the gravity of these matters. We can expect more such developments in the future.
Regulating cryptocurrency is controversial, but many experts argue it can benefit investors and the industry. Increased regulation can lead to more stability in the crypto market, which is known for its volatility.
Additionally, it can protect long-term investors, deter fraudulent activities within the crypto ecosystem, and provide clear guidelines for companies to innovate within the crypto economy as long as the regulations are appropriate.
The past year’s events have highlighted some issues with centralized finance (CeFi), such as the potential for fraud, censorship, and single points of failure. These issues have increased interest in decentralized finance (DeFi) as a more transparent, open, and resilient alternative.
In 2023, there will be more interesting and complex DeFi applications and use cases. The year will likely see DeFi projects with use cases such as synthetic assets, self-custody wallets, prediction markets, and regulatory-compliant platforms that connect TradFi to DeFi, like RebusChain.
Rebus is a regulated investment platform that uses our native utility coin, $REBUS, to allow seamless DeFi to TradFi interaction and linkage. Although Rebus will build the first set of DeFi Instruments or products, the platform is designed for 3rd parties, our platform partners, to build on the RebusChain.
Recently, there has been a growing interest in blockchain technology, with a steady increase in adoption by various industries such as banking, finance, international trade governments, and supply chain management. This is largely driven by the potential benefits that blockchain technology offers, such as increased security, transparency, and decentralization.
Solutions like Cosmos putting efforts into growing blockchain technology by funding, onboarding, and training developers will see continued development throughout 2023.
The rapid development of cryptocurrency markets is causing central banks worldwide to accelerate their efforts to develop and implement their own digital currencies. In 2022, there was increased interest in CBDCs among many countries, with more than half of central banks exploring their potential benefits. Many central banks have already moved beyond conceptual discussions and are in various stages of researching, testing, or deploying CBDCs. Some CBDCs have already been launched.
In 2023, we can expect to see a growing number of CBDC projects driven by recent developments in the cryptocurrency market. This will also prompt more central banks to introduce their own CBDCs earlier than expected, with increased collaboration worldwide, supported by organizations such as the IMF and BIS. This could also lead to growth in the blockchain industry and mainstream adoption.
NFTs became highly popular in 2021. Since then, they have been used for various purposes, such as in crypto games and collectibles. Being a new asset class, we are constantly seeing different use cases for them.
Despite the recent turmoil in the crypto market causing a temporary decrease in interest, NFT use is expected to continue to evolve and grow in terms of technology and creativity. We can expect new use cases for NFTs, especially in digital identity.
Decentralized identity products like the Rebus NFTID will allow individuals to manage their identity-related information. With DIDs, anyone can create, own, and control their identifiers and any associated attestations without having to rely on central authorities such as service providers or governments.
According to a report by Chainalysis, global use of cryptocurrency has not slowed as much as expected despite the crypto winter — even though the value of major cryptocurrencies has decreased, and several projects have failed. In fact, adoption has remained higher than it was before the market saw significant growth in 2019.
With this in mind, it’s safe to say that it’s early days in crypto. Data suggests that Bitcoin, Ethereum, and other cryptocurrencies still have a lot of room for growth. We are seeing innovations and developments year after year that capture the minds of people all over the world. An example is the adoption of the Bitcoin lightning network in El Salvador for everyday transactions — and there is more to come.
Even with significant security breaches and failures in centralized crypto exchanges, the overall crypto industry saw significant technological progress in 2022. Despite the difficult market conditions, Web3 technology has reached many people, and it’s here to stay. Our job as an industry is to make the technology more user-friendly, secure, and trustworthy for people around the globe and to bring about an age of transparency, stability, and self-reliance in finance.
At Rebus, we are committed to creating an ecosystem with underlying technology that satisfy both functional and regulatory requirements.