1. Biden’s Executive Order on Digital Assets

The Facts:

• U.S. President Joe Biden signed an eagerly anticipated executive order on cryptocurrencies on Wednesday, directing federal agencies towards a suitable approach to the sector and removing substantial uncertainty for the industry.
• Six key areas of interest are outlined within the document: consumer protection, financial stability and mitigation of systemic risk, illicit use of digital assets, economic competitiveness, financial inclusion and responsible innovation.
• Furthermore, the Biden administration joins the race to explore a U.S. CBDC after China was leading the charge.

Why it’s important:

• The EO recognizes the vast potential of crypto amidst geopolitical tensions as well as inflationary pressure and is aiming to take a unified approach among policy makers.
• As the document doesn’t mention decentralization, it is not clear how the posture towards the importance of open and permissionless technology really looks like.
• The fact that the SEC is not mentioned in the EO as well may indicate that the Biden administration puts the SEC in a less important role.

2. South Korea to elect Yoon Suk-Yeol, a pro-crypto candidate as the President

The Facts:

• Conservative Party candidate Yoon Suk-yeol of the South Korea’s People Power Party settled a narrow victory over Democratic Party’s candidate Lee Jae-myung.
• Both took crypto-friendly approaches and even issued NFTs during the election campaign to appeal to younger voters, crypto and tech enthusiasts.
• Yoon vows to deregulate the country’s crypto industry and proposed easing crypto related tax requirements.
• ICON, an aggregator blockchain for dApps founded in South Korea surged 60% on the back of the news.

Why it’s important:

• Before the current government tightened regulation in September 2021 leading to a shutdown of >70 Korean exchanges, South Korea was one of the biggest crypto markets.
• As the lack of legislative clarity surrounding the taxation of digital assets gets resolved, a volume influx of Korean exchanges reentering the space might be on the horizon.
• Furthermore, cryptocurrencies being a polarizing topic of both campaigns is a proxy for the increasing importance of that new asset class.

3. Fourth consecutive record high: February U.S. inflation rate rises to 7.9%

The Facts:

• As published on Thursday, CPI report discloses annual inflation to another 40-year high of 7.9%, jumping 0.8% in February and therefore hitting new highs four consecutive months.
• Especially food and energy, both tied closely to the crisis in Ukraine, drove CPI up while core inflation rose to 6.4%.
• Vehicle cost inflation eases for used cars declining 0.2% while new car prices increased 0.3%.

Why it’s important:

• Despite supply chain issues from pandemic conditions were projected to soften the economic tension, inflation gets yet an extra boost by Russia’s invasion leading to soaring prices of commodities.
• Moreover, another inflation high is likely to reinforce Powell’s stance to propose a 25 basis point rate hike as the Fed is expected to announce after its two-day meeting on March 16.
• Further tightening monetary policy by the FED might put more pressure onto the markets where crypto, currently rather behaving like a risk-on asset, could be affected as well.

4. Ethereum launches Kiln testnet for Proof of Stake transition

The Facts:

• On Wednesday, Kiln launched which is expected to be the last public testnet before the transition to PoS.
• Within the Kiln testnet environment, the actual merge will happen next week as the network transitions from PoW to PoS.

Why it’s important:

• The highly anticipated Merge is the last step towards PoS after the beacon chain launch in December 2020 and the London hard fork in August 2021.
• Launching the testnet with all necessary v2 specifications will allow users to check the stability and developers to verify the reliability of the protocol.
• The transition to PoS currently planned for summer is said to reduce energy consumption by up to 99%.

In other news

• Goldmann Sachs to offer access to Galaxy Digital’s ETH fund. (via The Block)
• Avalanche Foundation pushes subnets by $290M incentives. (via. Cointelegraph)
• Dubai proposal to regulate crypto (via Blockworks)
• FTX expands into Europe. (via PR Newswire)
• Santander to offer loans backed by tokenized commodities. (via. Coindesk)
• Warren proposal targeting sanctions evasion using cryptocurrencies (via NBC)

If you are looking for more in-depth insights on fundamentals and the latest developments in crypto, you might be interested in:

• The latest episode of Decrypt titled “Bitcoin Is For Friends And Foes Alike” sheds a light on the implications of the Russia-Ukraine conflicts on trade, fiat currencies, and the role of Bitcoin.
• Missing the fundamentals? Read our introduction on: “What is Bitcoin?”

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