The collapse of cryptocurrency giant FTX in late 2022 sent shockwaves throughout the crypto world. Previously valued at $32 billion, FTX filed for bankruptcy in November and its former chief executive officer Sam Bankman-Fried faces criminal charges. Countries around the world are expected to tighten regulations, leaving cryptocurrency platforms on shaky ground.

Central banks worldwide increasingly recognise the benefits of wholesale central bank digital currencies (wCBDCs) in making remittances and other cross-border transactions cheaper, faster and safer. Pilot projects set in motion seek to identify opportunities and risks as well as explore the possibility of having shared infrastructure to automate cross-border payments, foreign exchange and settlements.

The mBridge pilot has tested the issuance of over $12 million in central bank digital currencies (CBDCs) and payments of over $22 million on bridge. It has resolved long-standing pain points in traditional cross-border payment systems and is rooted in the roadmap for distributed ledger technology (DLT)-based infrastructure, as well as CBDC.

Despite the impressive figures, the banking industry has been slow in partnering with the United Nations Environment Programme Finance Initiative to set, implement and achieve its sustainability goals. The industry’s response to the climate change crisis is neither proactive nor pre-emptive. The vast majority of the estimated 25,000 licensed banks remain outside.

The continuous expansion of the crypto market and the innovations it promises have been closely watched by the financial services industry, particularly by regulators. While it continues to face an uncertain, future. several factors, including the constant offering of new cryptos, new use cases in DeFi and CeFi application, increasing number of users, and structural changes and innovation in financial markets will determine its long-term growth.

CEOs and leaders in the banking industry discussed the impact of emerging technologies and innovations on financial service including the development of new decentralised operating models and Web 3.0, the third generation of the internet.

Ethereum, Terra and Binance Smart Chain (BSC), the top three largest DeFi blockchain networks, represented 76.5% of all DeFi activity. Ethereum is facing stiff competition from other DeFi blockchains and is moving to Ethereum 2.0.

The total capitalisation of digital assets surged three-fold in 2021, with strong evidence that the momentum is likely to continue into the new year. DeFi users are expected to continue their exponential growth over the next 12 months, with more institutional investors moving into the space, combined with greater clarity over regulators’ stance in the large economies such as China and the US. What challenges and uncertainties could lie ahead to derail the upbeat outlook?

Commercial banks such as DBS Bank and traditional exchanges such as the Singapore Exchange have one thing in common: they are setting up and adding digital exchanges and platforms to their existing business lines.

As trials move into actual implementations, global financial markets and monetary systems will be disrupted and transformed.

Crypto markets have seen recent spikes and increased volatility as more mainstream companies and speculators continue to join the digital asset trading and investment bandwagon. The impressive rise of other cryptocurrencies beside Bitcoin has dented its market dominance.

Despite concerns over the unbridled speculation that has inflated the value of cryptocurrencies and initial coin offerings, many governments have embarked on cryptocurrency initiatives that may render them legal tender in the not too distant future.

Spurts in prices of cryptocurrencies and initial coin offerings over the last two years, with start-ups raising millions in minutes, have raised excitement and regulatory attention amid fear of “bubble” and potential losses.