A few major events that took place in 2020 that have shaped the industry into what it is today include the launch of tokenized stock trading, a government-induced KYC and AML crackdown, blockchain analytics firms becoming major players in the industry, DeFi hacks and exploits, and more governments exploring the world of central bank digital currencies. Each of these developments is likely to have an impact on the way the industry evolves and what we see take place in the future.
That being said, what will 2021 have in store for the blockchain and digital currency industry? Here are a few major developments and trends—in no particular order—that I believe we will see unfold in 2021.
More digital currency service providers will become national banks
In 2021, we will most likely see more digital currency service providers file to become national banks. If a digital currency company receives a national bank charter it allows them to easily operate across the nation rather than applying for the licenses to operate that are different in each state. In 2020, we saw Kraken become the first digital currency service provider to become a national bank.
At the end of 2020, we also saw BitPay and Paxos file to become national banks; there is a good chance that their applications will be approved in 2021.
More digital currency service providers will offer tokenized stock trading
FTX, Bittrex, and Bitcoin-based TDXP were some of the first digital currency exchanges to launch tokenized stock trading. Tokenized stock trading lives at the intersection of legacy finance and blockchain/digital currency. With tokenized stock trading, a token that runs on the blockchain represents the underlying shares of stock being traded. Because tokenized stock trading is blockchain-based, the market is open 24/7, settlement time is almost instantaneous, and transaction fees are only a fraction of a penny.
What’s also unique about tokenized stock trading is that it gives individuals who do not live in the United States the ability to invest in stocks that trade on the U.S. stock markets.
Tokenization will come to Bitcoin SV
I believe that in 2021, we will see a wave of tokenization come to Bitcoin SV (BSV). This means that Bitcoin wallets will have to be able to support the tokens coming to Bitcoin. That being said, I am expecting several of the token generation protocols to launch in 2021, and several bitcoin wallets to become token-compatible.
More digital currency companies will attempt to go public on US stock exchanges
Following in the footsteps of Coinbase, which has already announced its plans to IPO and become a publicly-traded company, I believe we will see more digital currency service providers go public in 2021. The Coinbase IPO will take place in 2021, but beyond that, the digital currency borrowing and lending service BlockFi has hinted that they are looking to go public as well.
Increased regulatory clarity will come to the industry
As the blockchain and digital currency industries continue to grow, increased regulation becomes inevitable. In 2021, we will see both industries receive more government attention as well as regulatory clarity from government agencies around the world that give service providers guidelines on how their businesses can and should operate in the eyes of law enforcement.
Let’s see if I’m right!
Let’s see if my predictions are right! At the end of 2021, I will go back and take a look at this article to see which predictions became reality and which predictions did not materialize. Regardless, of which predictions come true or not, the blockchain and digital currency industry will continue to climb in 2021; a lot of growth has happened in both industries and they are taking all the right steps to be even bigger forces in the world of banking and finance.
See also: Calvin Ayre’s 2021 forecast—Expect big data, enterprise gains for Bitcoin SV
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