Regulatory Dynamics

1. The Serbian government legalizes the trading and issuance of digital assets

The Serbian government will allow the issuance and trading of digital assets and related services based on a law that took effect on December 29. The draft "Digital Assets Law" was published in October and was passed by legislators in late November. The law officially came into effect on Tuesday after being published in the official gazette and will begin implementation in six months. The new law stipulates that digital asset service providers in Serbia must obtain a license from regulatory authorities before they can operate.

2. Beijing launches the pilot zone for legal digital currency and the construction of the digital financial system.

The 16th Plenary Session of the 12th Committee of the Communist Party of China in Beijing was recently held. The meeting emphasized that next year will focus on promoting work in thirteen areas, including the establishment of benchmark cities for the global digital economy. Plans are in place to increase investment in new infrastructure, implement the "Ten-Hundred-Thousand" project for digital economy application scenarios, build a blockchain service platform, and launch a pilot zone for legal digital currency and the construction of a digital financial system. In addition, there will be active expansion of digital trade, acceleration of the construction of an international information industry and digital trade port, an international big data trading center, and a digital trade pilot zone.

3. Colombia allows businesses to use funds to purchase Bitcoin.

The Colombian company regulatory authority Superintendencia de Sociedades announced in its official notice that, after consultation, companies in the country are now legally allowed to use their funds to purchase cryptocurrencies such as Bitcoin, provided they comply with relevant provisions in existing business regulations. This decision marks a significant shift in the regulatory authority's stance, as it was still warning companies about the risks of cryptocurrency investment in early 2018, deeming tokens too "volatile" to be suitable as assets. However, the new statement still contains some warnings about cryptocurrencies, stating that cryptocurrencies "are not money or legal tender" and cannot "be used as a means of payment."

Industry News

1. Bitcoin has first broken through thirty thousand dollars, while the market circulation continues to decline.

On January 2, Bitcoin historically broke through the $30,000 mark, just 17 days after surpassing $20,000. Data shows that a trading platform primarily aimed at institutional investors experienced an outflow of over 35,000 Bitcoins, worth more than $1 billion. Some analysts believe this may be due to institutional investors making large-scale purchases out of FOMO (fear of missing out).

The market capitalization of Bitcoin has exceeded $630 billion, rising to the 8th position in the rankings of well-known company stocks, surpassing Alibaba (with a market cap of $629.683 billion). It is worth noting that since the beginning of 2020, Bitcoin reserves across all exchanges have continued to decline from 2.88 million to 2.35 million, a decrease of 18.22%. Among them, the Bitcoin reserves of derivative exchanges have also fallen from 1.46 million at the beginning of August to 1.14 million.

2. Cover Protocol plans to issue a new token after being attacked by hackers.

On December 28, Cover Protocol was attacked by hackers, who exploited a vulnerability in the reward contract to issue approximately 10,000 COVER tokens. Subsequently, a white hat hacker also massively minted tokens and returned the proceeds to Cover officials. On December 30, Cover Protocol updated its compensation plan to include users providing liquidity in specific trading pools and users holding YETI and YPIE tokens in the list eligible to receive new COVER tokens. Previously, the groups eligible for new COVER tokens included liquidity providers from other trading pools, COVER token holders, and un-migrated SAFE2 and SAFE holders.

3. MicroStrategy CEO holds a large amount of Bitcoin

MicroStrategy founder and CEO Michael Saylor revealed in a podcast interview that he has purchased 88,000 bitcoins through entities controlled by the company or personally. At the current price of about $29,000, these bitcoins are worth over $2.5 billion. When asked whether investors should take profits now, Saylor suggested a long-term holding strategy, believing that bitcoin continues to reach new highs. He also stated that the extreme volatility that bitcoin experienced in its first decade may not be repeated in the future.

In addition, the MicroStrategy company's website recently launched a "Bitcoin Strategy" page, showcasing the adjusted returns comparison of Bitcoin with mainstream fiat currencies, indices, precious metals, stocks, and bonds, where users can view detailed metric data.

4. Shenzhen issues digital RMB red envelopes again

On January 1, 2021, Shenzhen issued another 20 million yuan in digital renminbi red envelopes. Following the previous "Gift Enjoyment Luohu Digital Renminbi Red Envelope" pilot, Shenzhen launched the "New Year Shopping, Gifts in Futian" event. All individuals in Shenzhen can participate in the digital renminbi red envelope lottery. The event is funded by Futian District of Shenzhen, with each winning red envelope amounting to 200 yuan, and winners can spend it at participating merchants within the validity period. This red envelope distribution adopts a "lottery drawing" format, with the registration channel for the lottery officially opening at 0:00 on January 1, 2021.