Digital asset skeptics take note: cryptocurrency will not only stay, but 90% of the world’s population is expected to adopt it in the next decade, says one of the world’s leading developers of crypto infrastructures.
The current estimate of global users of cryptocurrencies is around 4%, or 300 million people.
“This is an innovation and paradigm shift that is at least as big as the internet,” says Torbjørn Bull Jenssen, CEO of Scandinavian-based Arcane Crypto, a technology and investment company focused on bitcoins and digital assets based in Norway . his bold prediction last Thursday at Oppenheimer’s fourth Blockchain and Digital Assets Summit.
Jenssen joined two other crypto infrastructure leaders: Richard Byworth, CEO of Singapore-based EQONEX Group, a cryptocurrency exchange and crypto financial services company, and Luke Dorney, director of sales and partnerships at Zodia Chartert and British and Northern Trust banks
The panelists shared their observations on the current state of the overseas crypto market with moderator Elliot Chun, founder of Emergents, which is now part of strategic finance firm AP Crypto.
2021: A MILESTONE YEAR FOR CRYPTO
The Oppenheimer Summit, a one-day virtual event that brought blockchain and digital asset leaders together with investment experts, couldn’t have come at a better time. A milestone year during which crypto reached a new stage of maturity, 2021 saw several of the world’s leading institutional financial firms offer cryptocurrency as an asset class to investors.
In March, Morgan Stanley announced that it was launching access to three funds that allow Bitcoin ownership. It was the first major US bank to offer the famous cryptocurrency as an asset class (if only to its richest clients, who have an “aggressive risk tolerance.”) After years of watching and waiting, investment firms such as Goldman Sachs, JPMorgan Chase and Wells Fargo have followed suit this example, prompted by their customers who requested access to cryptocurrencies.
Other cryptocurrency highlights in 2021 include: El Salvador accepting Bitcoin as legal tender; the launch of the ProShares Bitcoin Strategy ETF, the first publicly traded Bitcoin futures fund in the United States; Approval by Canadian regulators of ETFs that directly hold Bitcoin; and tech giants Tesla and MicroStrategy are adding Bitcoin reserves to their balance sheets.
As of mid-November, the global cryptocurrency market value was $ 2.8 trillion, according to CoinMarketCap.
I’m optimistic about adopting [cryptocurrency], simply because I see so many traditional businesses stepping into this space and needing to talk to someone like us, says Dorney of Zodia Custody. We are already seeing global asset managers setting up their own structures and more are on the way.
A CALL FOR REGULATION
As large financial institutions jump on the cryptocurrency bandwagon, the demand for regulation increases. Much of the roundtable focused on the need for regulation, as more investors seeking to invest in safe, secure and profitable investments are enthusiastically entering the booming world of crypto currencies.
I think we’re in the first majority stage of the adoption curve, and that means you’re seeing people coming in now who aren’t willing to take big risks, says Byworth of EQONEX. You will run into issues where investors will complain to regulators if they get ripped off… so regulators have to wake up and realize that they have to protect people from some of these issues.
EQONEX, the first cryptocurrency exchange listed on a U.S. stock exchange (NASDAQ), focuses on building an exchange with a thorough process listing sensitive blockchain projects with good security, technology, and methodical processes that attract investors.
I think regulators should look like this now that we are starting to see much wider adoption in this industry, says Byworth.
We’re here to help develop the post-trade infrastructure for institutional clients investing in crypto, says Dorney of Zodia Custody. Our goal is to improve what has already been built and to offer our customers a safe environment to break down barriers to entry.
In Europe, says Arcane Global’s Jenssen, the regulatory environment is “pretty good”, thanks in part to regulations like the 5th EU Anti-Money Laundering Directive. It requires crypto asset companies to implement risk-based policies and procedures in order to comply with anti-money laundering and terrorist financing regulations, known as AML / CTF. However, Jenssen warns that some evolving regulations could harm the crypto industry in the future.
One such regulatory proposal is the EU Crypto Asset Markets Regulation (MiCA), which aims to regulate inaccessible crypto assets and their service providers in the EU while at the same time providing for a uniform licensing regime in all states.The initial boom in the supply of coins in 2017 can make companies insurmountable Impose restrictions and impede innovation.
There will be a lot of new regulations that they will try to adapt to cryptocurrencies that will be incompatible with how the industry works… but overall it is working very well right now, Jenssen said.
Meanwhile, in Asia, the cryptocurrency market was rocked in late September after China officially announced that all cryptocurrency transactions are illegal and banned its citizens from working for crypto corporations. Exit Bitcoin, Ethereum, and countless mainland Chinese startups, including Hong Kong-based Byworth’s EQONEX.
I think it’s very strong that it is related to the digital yuan, and they want to make sure there is no competition for it, says Byworth. “There is no doubt that they will use their long arm to influence other jurisdictions and it is likely that they can influence Hong Kong the most.
Luckily EQONEX has found a new home in Singapore. Byworth, who moved to Singapore from Hong Kong the week of the Summit, noted that the Monetary Authority of Singapore (MAS) has a great opportunity to be a hub for fintech. It can take advantage of the fact that regulators in other countries, including Japan and South Korea, have been more restrictive.
Byworth says he attended the Singapore FinTech Festival earlier this month to hear Ravi Menon, the head of the MAS, beg all crypto companies in attendance to move to Singapore. Regulators embrace them with open arms, says Byworth.
