Deutsche Bank is advancing its blockchain ambitions with a Layer 2 platform called Dama 2, designed to address regulatory concerns surrounding the use of public blockchains. Built on Ethereum, the platform is part of a broader effort to integrate tokenised assets into financial systems.
According to Boon-Hiong Chan, Deutsche Bank’s Asia-Pacific lead for innovation, public blockchains like Ethereum pose challenges for institutions due to concerns over transaction validators and potential interactions with sanctioned entities. Dama 2 aims to mitigate these risks by offering a more controlled network, allowing banks to curate trusted validators and provide regulators with monitoring tools to trace fund movements.
The initiative forms part of Project Guardian, a collaborative effort led by the Monetary Authority of Singapore, which includes major financial players like JPMorgan Chase and DBS Group. With Dama 2 leveraging ZKsync technology, Deutsche Bank is paving the way for tokenised funds and hopes to roll out a minimum viable product next year, subject to regulatory approval.
The Hong Kong Securities and Futures Commission (SFC) has granted conditional licences to four virtual asset trading platforms, including Accumulus GBA Technology, DFX Labs, Hong Kong Digital Asset EX, and Thousand Whales Technology. However, the platforms must meet certain regulatory conditions before they can begin fully operating.
These licences follow the SFC’s risk-based inspections, which were introduced in June to assess compliance with the region’s virtual asset regulations. The inspections are aimed at ensuring investor protection while promoting growth in the cryptocurrency sector.
The platforms must undergo third-party vulnerability assessments and penetration tests to address any potential security risks. The SFC will oversee the process, ensuring the platforms meet all necessary requirements before expanding their operations.
The SFC has also issued a roadmap to streamline the licensing process, providing clear guidance to ensure that licensed platforms maintain the highest security and compliance standards, safeguarding user funds and preventing fraud.
Bitcoin and the broader crypto market experienced a sell-off following the Federal Reserve’s announcement of a 25 basis point rate cut to its benchmark policy rate. While the rate cut was anticipated by many traders, the market reacted negatively to Fed chair Jerome Powell’s indication that fewer rate cuts than initially expected could take place in 2025. Following the announcement, Bitcoin’s price dropped by 4.6%, falling to $101,300, and Ether saw a 5.96% decline, dropping to $3,600.
Powell’s comments about only two rate cuts in 2025 and an increased inflation outlook raised concerns among market participants. The Fed’s revised inflation forecast, which now expects a 2.5% rate in 2025, also contributed to a more cautious sentiment. Some traders view these shifts in perspective as a sign of a more hawkish stance from the central bank, particularly with the potential policy changes under the incoming administration.
Crypto analysts noted that the drop in Bitcoin’s price cleared out both long and short positions, with BTC falling into a bid zone between $100,000 and $98,000. The key for Bitcoin to maintain upward momentum will be reclaiming the $100,000 to $101,400 zone before the daily candlestick closes. The recovery is seen as crucial to restore market confidence.
Ohio may soon lead the charge in government cryptocurrency adoption, with proposed legislation aimed at incorporating Bitcoin into the state’s financial strategy. Derek Merrin, Leader of the Ohio House Republicans and former Mayor of Waterville, introduced House Bill 703, which would authorise the state treasurer to invest in Bitcoin. Dubbed the ‘Ohio Bitcoin Reserve,’ this initiative is positioned as a hedge against the declining purchasing power of the US dollar, preserving the value of public funds for future generations.
If passed, the bill would grant Ohio the flexibility to allocate treasury funds into Bitcoin, marking a significant step towards crypto integration in government finances. Advocates argue that such a move could enhance the state’s financial resilience, encourage corporate adoption of digital assets, and position Ohio as a trailblazer in global finance. Cynthia Lummis and other proponents believe Bitcoin’s growing acceptance by businesses and even some government agencies underscores its potential as a reliable financial tool.
Ohio’s $72.16 billion public debt, largely tied to infrastructure and education funding, adds urgency to innovative financial strategies. By diversifying its reserves with Bitcoin, the state could improve long-term solvency, potentially reducing the need for tax increases or service cuts. As digital assets gain traction, Ohio’s initiative could set a precedent for other states exploring crypto adoption to bolster fiscal stability.
The US Treasury’s Office of Foreign Assets Control (OFAC) has imposed sanctions on two individuals and a company based in the United Arab Emirates (UAE) for allegedly aiding North Korea’s use of digital assets in illegal activities.
The sanctions target Lu Huaying and Zhang Jian, along with Green Alpine Trading, LLC, a front company linked to a broader scheme of money laundering. These actions aim to disrupt a network that, according to US authorities, funnels millions of dollars to North Korea’s nuclear weapons and missile programs.
North Korea has a history of using digital assets and cybercrimes to fund its military efforts, employing IT workers and hackers to generate funds that are often obscured through complex laundering operations. The sanctions focus on Sim Hyon Sop, a representative of North Korea’s state-run Korea Kwangson Banking Corporation, who has been previously sanctioned. Sim is accused of using a mix of cryptocurrency cash-outs and money mules to move funds back to the regime for its military projects.
Under the new sanctions, any property owned by the designated individuals or entities in the US is blocked, and US citizens and companies are prohibited from engaging in transactions with them. Non-compliance could lead to further enforcement actions, even against those outside the US. The move reflects a coordinated effort with the UAE to combat North Korea’s destabilizing activities. It highlights the importance of international cooperation in tackling illicit financial networks that exploit new technologies, including cryptocurrencies.
European Parliament Member from France, Sarah Knafo, has called on the EU to embrace Bitcoin by establishing national strategic reserves and rejecting the European Central Bank’s (ECB) proposal for a digital euro. In a video shared on her X account, Knafo advocated for European nations to develop their crypto-mining industries and cease increasing taxes on cryptocurrency holders. She highlighted Bitcoin as a means to secure freedom and protect citizens from the overreach of centralised financial systems.
Knafo, citing the example of El Salvador‘s adoption of cryptocurrency and the US plans for a Bitcoin reserve, criticised the EU for clinging to outdated financial systems that are prone to inflation and crises. She warned that the ECB’s digital euro could lead to an over-centralised system, where officials could control transactions and potentially exclude individuals from the banking system for expressing dissenting opinions.
Knafo also pointed to the growing global trend of nations considering Bitcoin reserves to safeguard their financial stability, with countries like Japan, Russia, and Brazil exploring similar initiatives. She argued that Bitcoin could serve as a more reliable financial system, offering long-term protection from economic mismanagement.
The call for a Bitcoin reserve reflects the increasing global recognition of decentralised finance as a potential solution to financial instability, with various countries looking to Bitcoin as a safeguard for national funds.
President-elect Donald Trump met with Kris Marszalek, CEO of Crypto.com, on 16 December at Mar-a-Lago to discuss plans for a US Strategic Bitcoin Reserve. The meeting focused on developing a policy framework for the reserve, which aims to classify Bitcoin as a strategic asset within the Treasury’s Exchange Stabilisation Fund. The plan also includes rigorous audits and security protocols for government-held Bitcoin, consolidating assets within seven days and establishing a management programme within 60 days.
The Strategic Bitcoin Reserve is designed to bolster US economic security and global financial leadership in the digital asset space. The move aligns with Trump’s broader pro-crypto agenda, which includes appointing key industry advocates like Howard Lutnick as commerce secretary and Paul Atkins to lead the SEC. His administration’s crypto-friendly outlook is expected to enhance regulatory clarity and foster innovation.
The news coincided with Bitcoin reaching an all-time high of $108,268.45 on 17 December. This surge reflects growing confidence in the cryptocurrency’s role in the US financial landscape. Meanwhile, Ohio’s Derek Merrin has also proposed a state-backed Bitcoin reserve, signalling increasing governmental interest in Bitcoin as a hedge against economic uncertainties.
A recent Emerson College poll reveals that 19% of US voters have at some point invested in, traded, or used cryptocurrency. The poll, which surveyed 1,000 registered voters between 11 December and 13 December, also found that nearly 40% of crypto users had purchased with it. Crypto usage is notably higher among younger individuals, with nearly a third of voters under 40 using cryptocurrency, and men being twice as likely to use it as women.
The poll also highlighted the growing diversity of the crypto user base, with 33% of users identifying as Asian, Hispanic, or Black, compared to just 14% who were white. Additionally, 57% of crypto users expressed a favourable view of Donald Trump, reflecting the industry’s increasing political influence. This demographic is becoming a key constituency, as crypto advocacy groups continue to push for policies that favour digital currencies.
A separate survey by the Digital Chamber, a crypto advocacy group, indicated that roughly 26 million US voters prioritise pro-crypto policies when selecting political candidates. Over half of voters in another poll by Grayscale expressed a preference for pro-crypto candidates, with many suggesting that the US government could become the most crypto-friendly in history following the 2024 elections. This shift signals a growing alignment between crypto supporters and the political landscape, promising a more favourable regulatory environment for the industry.
Bit Trade, the operator of Kraken in Australia, has been fined $8 million for offering an unapproved margin lending product to over 1,100 customers. The Federal Court of Australia ruled that the company breached financial regulations by failing to assess customer suitability and neglecting to provide a Target Market Determination (TMD), a document essential for ensuring products are appropriately matched to consumers’ needs.
The Australian Securities and Investments Commission (ASIC) revealed that customers lost $7.85 million due to the product, with one individual losing $6.3 million. Justice John Nicholas criticised Bit Trade’s actions as “serious” and profit-driven, calling out the company for its delayed response to compliance issues. In addition to the fine, Bit Trade was ordered to cover ASIC’s legal costs.
Kraken was disappointed with the ruling, arguing that Australia’s regulatory framework lacks clarity and calls for tailored cryptocurrency laws. However, ASIC Chair Joe Longo described the decision as a turning point for consumer protection, urging digital asset firms to meet compliance obligations. The regulator is currently consulting with the crypto industry on updates to its guidance, though critics claim the government’s inaction has left the sector in “regulatory limbo.”
Bitcoin prices have reached a new record, surpassing $107,000 amid speculation that President-elect Donald Trump might establish a Bitcoin strategic reserve. The milestone came shortly after prices broke through $106,000, reflecting growing optimism in the cryptocurrency market.
Meanwhile, MicroStrategy announced a $1.5 billion bitcoin purchase, adding 15,350 bitcoins at an average price of $100,386 each. The company now holds 439,000 bitcoins, worth $47 billion, and has seen its market cap soar from $1.1 billion in 2020 to nearly $100 billion. The firm’s shares have surged by 527% this year, boosted by Bitcoin’s rally and its forthcoming inclusion in the Nasdaq 100 index.
Despite its impressive growth, analysts suggest MicroStrategy may face challenges in joining the S&P 500 due to concerns over profitability. Current accounting rules restrict how gains from bitcoin holdings are recorded, although new standards expected in January 2025 could help the company more accurately reflect its bitcoin-related gains.
