After a significant downturn in 2022, the value of major cryptoassets such as Bitcoin and the overall market capitalization of cryptoassets has been growing throughout 2023, showing a certain resilience of the crypto market despite the failures observed in 2022. At the end of October 2023, the value of Bitcoin was however still at -40% of its peak of November 2021.

The cryptoasset market is still mainly driven by speculative trading and lending of unbacked cryptoassets by retail investors, but a greater involvement of institutional investors is observed as well as the development of cryptoasset services, such as custody, provided by traditional financial institutions. There is also the potential for new activities and use cases to emerge in the crypto space particularly around decentralized finance (DeFi) and tokenized assets.

Major jurisdictions around the world such as the EU, Japan and the UK are working on the implementation of cryptoasset and stablecoin frameworks, setting out requirements for their public offering and marketing and for the provision of cryptoasset services. In the EU the markets in cryptoassets regulation (MiCA) adopted in H12023 is due to enter into force in 2025. AML / CFT rules have also been updated to take into account cryptoasset transactions and transfers. Work is also underway at the global level led by the FSB and IOSCO in particular, to provide guidance on how to address the risks from cryptoasset and DeFi activities. The BCBS has also set out rules for the prudential treatment of banks’ exposures to cryptoassets.