Binance, which operates the world’s largest cryptocurrency exchange, said it managed to navigate “headwinds” in the cryptocurrency market over the past year, which has been challenging for the cryptocurrency market as a whole.
The cryptocurrency market was not very fortunate in 2022, as it lost about two trillion dollars last year, and popular cryptocurrencies such as Bitcoin fell below the high levels it recorded in 2021, while other currencies collapsed, according to CNBC.
In its annual report issued on Thursday, Binance said that the year 2022 witnessed the collapse of many projects in the cryptocurrency market as a result of events out of control. “2022 was undoubtedly a challenging year for everyone,” it added.
Last year, Binance refused to proceed with a deal to acquire the operations of its competitor, the FTX platform, which was going through a massive liquidity crisis. Its currency, FTT, plunged to record levels, and FTX initiated bankruptcy proceedings in the United States.
Binance indicated, in its annual report, that the challenges faced by companies in the field prompted them to resort to large layoffs of their employees and freeze hiring, adding that as a company, it pledged one billion dollars – which could be increased to two billion – for an initiative aimed at recovering the industry.
According to the report, the average daily trading volume in 2022 on the Binance platform reached $65 billion.
The need to organize encryption
The International Monetary Fund said, in a blog about cryptocurrencies on Thursday, that the cryptocurrency market “needs strong and comprehensive regulation and supervision” globally, noting that crypto assets do not yet represent risks to the global financial system, but some developing and emerging economies have been affected. Indeed.
He explained that the “encryption” process – where residents of countries start using encrypted assets instead of the local currency – would cause capital to flow out of countries, limit the ability of central banks to implement monetary policy, and threaten financial stability, which creates new challenges. for policy makers.
The IMF believes that there may also be concerns about financial stability in the near future.
The fund made recommendations to regulate the cryptocurrency market to address its imbalance, including subjecting providers of crypto-asset services and issuers of stable currencies – which are used as a store of value – to strict precautionary conditions, in addition to the need for strict and comprehensive supervision and regulation at the level of countries in the world of the cryptocurrency market.
But the fund said protecting users from cryptocurrency risks is “difficult” given the rapid development of cryptocurrencies.
(Prepared by: Shaima Hefzy, edited by: Maryam Abdel-Ghani, to contact [email protected])
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