Cryptocurrency Leaders See Exponential Growth; banks adopt crypto as an asset class

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Skeptics of digital assets take note: not only is cryptocurrency here to stay, but 90% of the world’s population is expected to adopt it within the next decade, says one of the leading crypto infrastructure developers at the world.

The current estimate of global cryptocurrency users is around 4%, or 300 million people.

“This is an innovation and a paradigm shift at least as big as that of the internet,” said Torbjørn Bull Jenssen, CEO of Nordic company Arcane Crypto, a technology and investment company focused on on bitcoin and digital assets based in Norway. Jenssen made his bold prediction last Thursday at Oppenheimer’s fourth summit on blockchain and digital assets.

Jenssen was joined by two other leaders in the crypto infrastructure market: Richard Byworth, CEO of Singapore-based EQONEX Group, a full-service crypto finance company and cryptocurrency exchange, and Luke Dorney, head of sales and partnerships. for Zodia Custody, a digital preservation offer. developed by Standard Chartered and Northern Trust banks and based in the UK

Panelists shared their observations on the current state of the overseas crypto market with moderator Elliot Chun, founder of Emerging, who is now part of strategic finance company AP Crypto.

2021: a pivotal year for crypto

The Oppenheimer Summit – a one-day virtual event bringing together blockchain and digital asset leaders with investment professionals – couldn’t have come at a better time. A milestone year in which crypto reached a new stage of maturity, 2021 saw several of the world’s largest institutional financial firms bring cryptocurrency as an asset class to investors.

In March, Morgan Stanley announced that it was launching access to three funds allowing possession of Bitcoin. It was the first major US bank to offer the famous cryptocurrency as an asset class (but only to its wealthier clients who have “aggressive risk tolerance”). After years of watching and waiting, investment firms such as Goldman Sachs, JPMorgan Chase, and Wells Fargo have followed suit, spurred on by their clients demanding access to crypto.

Other crypto highlights in 2021 include: El Salvador accepting Bitcoin as legal tender; the launch of ProShares Bitcoin Strategy ETF, the first exchange-traded Bitcoin futures fund in the United States; The approval by Canadian regulators of ETFs that directly hold Bitcoins; 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 am optimistic about the adoption [of crypto] go up, just 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’re already seeing global asset managers setting up their structures, and there’s more going down the pike. “

A call for regulation

As large financial institutions enter the crypto movement, the demand for regulation is increasing. Much of the roundtable focused on the need for regulation as more investors – who wish to invest in safe, secure and lucrative investments – eagerly enter the booming world of crypto assets. .

“I think we’re in the first majority phase of the adoption curve, and that means you’re looking at people coming in now who aren’t ready to take major risks,” Byworth said of EQONEX. “You’re going to run into issues where investors will complain to regulators if they get ripped off … so regulators have to wake up and realize they have to protect people from some of these issues.”

EQONEX, the first cryptocurrency exchange to be listed on a U.S. Stock Exchange (NASDAQ), focuses on creating an exchange with a comprehensive process that lists sensitive blockchain projects with good security, technology, and orderly processes that appeal to investors.

“I think that’s the way regulators need to look now that we’re starting to see much wider adoption happening in this industry,” Byworth said.

“We’re here to help develop post-trade infrastructure for institutional clients investing in crypto,” notes Dorney of Zodia Custody. “What interests us is trying to improve what has already been built today and make it a safe environment for our customers to break down barriers to entry.”

In Europe, Jenssen of Arcane Global says the regulatory environment is “good enough”, in part thanks to regulations such as the EU’s Fifth Anti-Money Laundering Directive. It requires crypto-asset companies to implement risk-based policies and procedures to comply with anti-money laundering and terrorist financing regulations, known as LAB / CTF. . But Jenssen warns that some regulations in the works could hurt the crypto industry in the future.

One of these proposed regulations is the EU Crypto-Asset Markets Regulation (MiCA), designed to regulate out-of-scope crypto-assets and their service providers in the EU while providing a regime of single license in all member states by 2024. Critics believe MiCA, which was offered in response to the initial coin supply boom in 2017, could place insurmountable constraints on businesses and hamper innovation.

“There will be a lot of new regulations that they will try to adapt to crypto that will be incompatible with how the industry works… but overall it’s 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 companies. Exit Bitcoin, Ethereum, and the countless Chinese startups from mainland China, including Hong Kong-based Byworth’s EQONEX.

“My point of view, very strongly, is that this is tied to the digital yuan, and they want to make sure there is no competition for it,” Byworth said. “There is no doubt that they will use their long arm to influence other jurisdictions, and the one they can possibly influence the most is probably Hong Kong.”

Fortunately, EQONEX has found a new home in Singapore. Byworth, who left Hong Kong for Singapore the week of the summit, noted that the Monetary Authority of Singapore (MAS) had a major opportunity to be a fintech hub. It can take advantage of the fact that regulators in other countries, including Japan and South Korea, have been more restrictive in their operation.

Byworth says he attended the Singapore FinTech Festival earlier this month to hear MAS chief Ravi Menon plead with all crypto companies in attendance to relocate to Singapore. “Regulators embrace them with open arms,” says Byworth.

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