David Schwed, COO of Halborn, issued a message to his colleagues from the floor of the fintech conference in Amsterdam at Money20/20 earlier this month.
He wrote that he was content. He feels that adults are present.
After attending crypto-focused conferences in Texas, Miami, and Barcelona over the previous two weeks, he said seeing exhibits for JP Morgan, Citibank, and Goldman Sachs was a refreshing change of scenery from fist bumps and late-night celebrations.
The blockchain security company Halborn hired Schwed in July of last year. He formerly held the position of worldwide head of digital assets technology for BNY Mellon, one of the America’s oldest institutions and the biggest custodian bank in the world.
He told that this is one of the reason he believes there is a “huge, huge market” for big banks to enter the cryptocurrency space. Moreover, he is not the only one.
Long before FTX hit its all-time low in November last year, institutions from the traditional world of banking dabbled in cryptocurrency. However, traditional finance, often known as TradFi in the industry, seems to be ready to gain ground—and perhaps market share—as the SEC closely monitors the two main centralized exchanges still operating. Some experts assert that Wall Street is the end destination of all financial routes in the United States, regardless of how new they may be.
Because they are risk averse, Schwed argued that the banks and other financial institutions with capital are always years behind. Once there is any form of clarity, whether it comes from the SEC or legal systems, they will immediately seize the chance to build.
Schwed thinks that cryptocurrency will continue to have its libertarian-leaning anti-establishment actors even if Wall Street decides to participate. Screw financial intermediaries, was their catchphrase. However, he asserted that when authorities intensify their efforts, that faction will either dissipate or shift towards privacy coins, resulting in more stringent rules along the way.
In the future, he predicted, the companies that we see now will look and feel very different. The smart businesses will base their operations on the outcomes of these SEC litigation since they are the ones gaining capital.
He told that three years from now, the biggest enterprises in the sector would be made up of an altogether different cast, as America’s financial watchdog works to subdue cryptocurrency.
One of the seasoned investors who thinks the guard is about to change is “Shark Tank” star Kevin O’Leary. He told that three years from now, the top enterprises in the sector would be made up of an altogether different cast, as America’s financial watchdog works to subdue cryptocurrency.
He added of today’s top exchanges, We have to appreciate them for their service and their enterprise, but they have to depart. They don’t comprehend the idea of effectively integrating [with] the international financial system so that institutions can take part.
A spark of optimism for crypto adoption flickered when BlackRock announced its effort to develop America’s first spot-based Bitcoin ETF amid the sour moods on Crypto Twitter following the SEC’s recent regulatory onslaught. Within a short period of time, Wall Street giants Fidelity, Charles Schwab, and Citadel Securities declared that their cryptocurrency exchange EDX Markets had started trading.
Days later, Bitcoin was close to the level of $30,000, up almost 20% since BlackRock submitted its proposal.
It would be a game-changer if BlackRock’s Bitcoin ETF is authorized. Ever since the Winklevoss twins submitted their initial application for a Bitcoin ETF in 2013, the SEC has repeatedly rejected every proposal.
After the ETF announcement, Sui Chung, CEO of CB Insights, said his phone started to “ring hot” with calls from clients right away. Clients from major conventional corporations in particular were evaluating BlackRock’s chances of success.
He claimed that there had been a noticeable change in their perspective towards Bitcoin and that if BlackRock was open to experimenting with the development of new financial products, then they should be as well. After all, it is clearly possible to create new financial products.
In spite of the SEC accusing Coinbase of running an unlicensed exchange in a lawsuit, BlackRock’s decision to continue using Coinbase as the custodian for its Bitcoin ETF is a subliminal vote of confidence in the firm. Inkling a contract that gives BlackRock’s institutional Aladdin platform users access to digital assets through Coinbase’s brokerage service was the first major relationship the two companies announced last August.
The SEC gained some support from TradFi by singling out Coinbase. The Committee on Capital Markets Regulation, which bills itself as a neutral research organization, filed a brief shortly after the agency filed its case, criticizing the agency’s legal action and charging the SEC with making it too difficult for cryptocurrency firms to register with the watchdog.
BlackRock’s decision to dive deeper will encourage additional institutions to consider cryptocurrency seriously as an emerging asset class, according to Leo Mizuhara, CEO of the digital asset management platform Hashnote.
According to Mizuhara, [BlackRock] substantially legitimizes the entire area as an investable asset class. They did this immediately following the SEC’s lawsuit against Coinbase, which, in his opinion, really shows how little people believe the SEC has a case.
For some of cryptocurrency’s ardent supporters, the glow that comes with increasing involvement from major institutions is an unwelcome development. After BlackRock’s filing, FUD of a TradFi takeover circulated on Crypto Twitter, branding the SEC’s regulatory double-tap as a malicious scheme.
According to self-described DeFi addict Miles Deutscher on Twitter, these large corporations feel frightened by cryptocurrencies since they are accustomed to controlling the financial markets. He asserted that the intention is to destroy the cryptocurrency industry through severe regulation so that giant TradFi may take over and rule US trade.
Wall Street’s role, however, ought to be embraced as a necessary evil by individuals who work for these organizations.
According to Mizuhara from Hashnote, he has long believed that Bitcoin and cryptocurrency won’t take off if they’re exclusively used by anarchists and hardliners. It truly must become popular if it is to leave its influence on the world. Right now, we’re on step two of 10, but step 10 is soon to come.
