Skeptics of digital assets: Not only are cryptocurrencies here to stay, 90% of the world’s population is expected to adopt them in the next decade, according to one of the world’s leading cryptocurrency infrastructure developers.
The current estimate of global cryptocurrency users is around 4%, or 300 million people.
“This is an innovation and paradigm shift at least as big as the internet,” says Torbjørn Bull Jenssen, CEO of Arcane Crypto, a Norway-based investment and technology company focused on bitcoins and digital assets. He made this bold prediction last Thursday, during Oppenheimer’s fourth summit on blockchain and digital assets.
Torbjørn Bull Jenssen was joined by two other leaders in the cryptocurrency infrastructure market: Richard Byworth, CEO of Eqonex Group, a Singapore-based cryptocurrency exchange and finance company, and Luke Dorney, head of partnership sales and operations. from Zodia Custody, a digital custody offering developed by Standard Chartered and Northern Trust banks in the UK.
The experts shared their observations on the current state of the cryptocurrency market with moderator Elliot Chun, founder of Emerging, who is now part of the strategic finance company AP Crypto.
2021, a crucial year for cryptocurrencies
The Oppenheimer Summit, a one-day virtual event that brings together blockchain and digital asset leaders with investment professionals, couldn’t have come at a better time. A pivotal year in which cryptocurrency reached a new stage of maturity, in 2021 several of the world’s leading institutional finance firms brought cryptocurrency as an asset class to investors.
In March, Morgan Stanley announced that it was launching access to three funds that allow holding bitcoin. It is the first major bank in the US to offer the famous cryptocurrency as an asset class (although it only caters to its wealthy clients who have “an aggressive tolerance for risk”). After years of watching and waiting, investment firms like Goldman Sachs, JPMorgan Chase, and Wells Fargo followed suit, prompted by their clients demanding access to cryptocurrencies.
Other cryptocurrency highlights in 2021 include: El Salvador accepts bitcoin as legal tender; the launch of the ProShares Bitcoin Strategy ETF, the first US bitcoin exchange-traded futures fund, approval by Canadian regulators for ETFs (Exchange Traded Funds) that hold bitcoins directly; and tech giants Tesla and MicroStrategy add bitcoin reserves to their balance sheets.
As of mid-November, the global cryptocurrency market was worth $ 2.8 trillion, according to CoinMarketCap.
“I am optimistic about adoption [des cryptomonnaies]because I see a lot of traditional companies entering this space and needing to speak to someone like us, ”says Luke Dorney of Zodia Custody. “We are seeing global asset managers already setting up their structures, with more to come. “
A call for regulation
As large financial institutions jump on the crypto bandwagon, the demand for regulation is increasing. Much of the panel’s discussion revolved around the need for regulation as more and more investors – wanting to invest in safe, secure and lucrative investments – eagerly enter the burgeoning world of crypto assets.
“I think we are in the early phase of most of the adoption curve, which means that people who are entering now are not willing to take major risks,” said Richard Byworth of Eqonex. “You will run into problems where investors will complain to regulators if they get scammed… so regulators have to wake up and realize that they have to protect people from some of these problems. “
Eqonex, the first cryptocurrency exchange to be traded on a US stock market (NASDAQ), focuses on building an exchange with an in-depth process listing sensitive blockchain projects with good security, technology, and methodical processes that attract investors.
“I think that’s the path that regulators should take now that we are starting to see much wider adoption in this industry,” said Richard Byworth.
“We are here to help develop the post-trade infrastructure for institutional clients investing in cryptocurrencies,” notes Luke Dorney. “What we are interested in is trying to improve what has already been built today and make it a safe environment for our clients to break down barriers to entry. “
What about Europe and Asia?
In Europe, Arcane Global’s Torbjørn Bull Jenssen believes that the regulatory environment is “quite good”, thanks in particular to regulations such as the EU’s Fifth Directive against money laundering. This directive requires crypto companies to implement risk-based policies and procedures to comply with anti-money laundering and terrorist financing regulations. But Torbjørn Bull Jenssen warns that some regulations that are being developed could be detrimental to the cryptocurrency industry in the future.
One such regulatory proposal is the EU Crypto Asset Markets Regulation, designed to regulate out-of-reach crypto assets and their service providers in the EU, while providing a single licensing regime in all member states by 2024. Critics believe this digital asset regulation, which was postponed in response to the initial coin supply boom of 2017, could impose insurmountable restrictions on businesses and hamper innovation.
“There will be a lot of new regulations that they will try to adapt to cryptocurrencies that will be incompatible with the way the industry works … but overall it is working very well at the moment,” says Torbjørn Bull Jenssen.
Meanwhile, in Asia, the cryptocurrency market shook in late September after China officially announced that all cryptocurrency transactions were illegal and banned its citizens from working for cryptocurrency companies. Get out of Bitcoin, Ethereum, and the myriad Chinese startups from mainland China, including Hong Kong-based Eqonex.
“My point of view, very strong, is that it is pegged to the digital yuan, and they want to make sure there is no competition for it,” says Richard Byworth. “There is no doubt that they are going to use their long arm to influence other jurisdictions, and the one they can most likely influence is Hong Kong. “
Fortunately, Eqonex has found a new home in Singapore. Richard Byworth, who moved from Hong Kong to Singapore the week of the summit, noted that the Monetary Authority of Singapore has a great opportunity to become a hub for fintech. You can take advantage of the fact that regulators in other countries, especially Japan and South Korea, have been more restrictive in how they operate.
Richard Byworth says he attended the Singapore FinTech Festival earlier this month to hear Ravi Menon, head of the Monetary Authority of Singapore, plead with all cryptocurrency companies present to move to Singapore. “Regulators welcome them with open arms,” says Richard Byworth.
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