Cambodia Authorizes Banks to Offer Category 1 Crypto Assets Services, Bitcoin Metrics Signal Shift

In a significant policy shift, the National Bank of Cambodia (NBC) has authorized commercial banks and payment institutions to offer services related to Category 1 crypto assets, including secured stablecoins.

Cambodia's Central Bank Authorizes Crypto Services, Bitcoin Banned

In a significant policy shift, the National Bank of Cambodia (NBC) has authorized commercial banks and payment institutions to offer services related to Category 1 crypto assets, specifically mentioning secured stablecoins. However, the use of unsecured cryptocurrencies, such as Bitcoin, remains strictly prohibited.

This marks the first time that the NBC has permitted commercial banks and payment institutions to engage in activities involving crypto assets. The move is part of a broader effort to regulate and supervise the digital asset industry in the country.

According to a tweet by Wu Blockchain, the new regulation allows commercial banks and payment institutions to offer services related to Category 1 crypto assets, which include secured or stablecoins. At the same time, the use of unsecured cryptocurrencies, such as Bitcoin, is still prohibited.

Meanwhile, Bitcoin's spot exchange reserves and netflows have turned positive, indicating a net addition of 15.8K BTC following several weeks of decline. This development raises questions about market sentiment, with possibilities ranging from increased caution to preparation for a potential correction.

Spot exchange reserves and netflows are signaling a shift. After several weeks of decreasing reserves, they just turned positive (+15.8K BTC). Could this be caution, profit-taking, or preparation for a correction? Rising reserves usually lead to heightened volatility and short-term price pressure. $BTC pic.twitter.com/LRbBtmNTha

— Kyledoops (@kyledoops) December 27, 2024

This shift in metric is noteworthy as rising reserves often lead to heightened volatility and short-term price pressure in the market.

In related news, Bitwise has announced plans to launch the Bitcoin Standard Company ETF, with a focus on companies that hold Bitcoin as part of their corporate reserves. To qualify for the index, companies must meet stringent criteria, including holding a minimum of 1,000 Bitcoins, a market valuation of at least $100 million, an average daily liquidity of $1 million, and a public free float of at least 10%.

This fund will primarily invest in companies that hold Bitcoin as part of their corporate financial reserves. To qualify for the index, companies must meet the following criteria: holding at least 1,000 Bitcoins, a market value of at least $100 million ... https://t.co/0000000000pic.twitter.com/0000000000

— Wu Blockchain (@WuBlockchain) December 27, 204Beit to the positive momentum, Bitcoin spot ETFs saw a significant net inflow of $475 million on December 26, marking the first positive net inflow after four consecutive days of outflows. Notably, Fidelity's ETF (FBTC) contributed heavily with a net inflow of $254 million, indicating strong institutional interest in the digital asset.

Bitcoin spot ETF had a total net inflow of $475 million on December 26, which is the first net inflow after encountering net outflows in the past four days. Fidelity ETF FBTC had a net inflow of $254 million. https://t.co/59u0BnEqLG pic.twitter.com/uIUu0Hfdjl

— Wu Blockchain (@WuBlockchain) December 27, 2024

This development comes amid regulatory shifts in Cambodia and changing Bitcoin metrics, presenting a landscape of both opportunities and uncertainties. Investors are advised to stay alert as the market unfolds, with rising reserves and ETF inflows setting the stage for potential volatility and growth.