While change is guaranteed, the scope and scale of change are not. In the financial industry, blockchain – the technology behind Bitcoin (BTC), ether (ETH), non-tradable tokens (NFT) and other digital assets – has put us at a crossroads.
What does the future hold for money?
We have been at the forefront of cryptocurrency for the past 10 years and protect investors large and small alike, giving them the opportunity to invest in these exciting new financial frontiers. The experience gained here helps us know what happens next.
Countless results are possible in this historic period, but one thing is certain: the impact and innovation of technology will impact far beyond traditional financial sectors.
A mature digital real estate industry is coming
Blockchain offers a faster, more efficient, and more secure framework for financial transactions compared to the contracts, transactions, and records that currently define our economic, legal and political systems. Harvard Business Review put it this way: “[Old financial structures] are like a rush hour impasse in the seizure of a Formula 1 race car. In the digital world, the way we organize and maintain management oversight must change.”
For generations, technology has modernized the way we conduct financial transactions. The modern credit card has been around since the late 1950s, the first real online sale was completed in 1994, PayPal was founded in 1998, published and sold by eBay in 2002, and Satoshi Nakamoto started the blockchain revolution in 2008. There is no economic weight Big for longer on the sidelines. And 55 of the world’s 100 largest banks use this new technology in one way or another.
The first international rules were issued in Japan in 2016 after crypto exchanges were hacked, including the theft of 850,000 BTC against Mount Gox. Since the success of any financial market depends on predictability, security and overall market performance, regulators continue to evaluate the direction and viability of their participation in cryptocurrencies.
On this topic: Will regulations adapt to cryptocurrency or cryptocurrency to regulation? Expert response
Regulators and companies want investors to have a certain degree of protection in any market – digital or otherwise – to ensure participation. Consider the Federal Deposit Insurance Corporation (FDIC) for US banks or the eBay money-back guarantee. Without regulation, market participants can be exposed to both long-term and short-term risks.
Regulators also ensure that the markets play on an equal footing. As Commodity Futures Trading Commissioner (CFTC) Dan Berkowitz said in June:
“It makes no sense to allow an unregulated and unlicensed derivatives market to compete alongside a fully regulated and licensed derivatives market.”
Most importantly, it is not only regulators and governments who decide the future – we investors, managers and the average consumer – who decide how we want to use digital assets in the future.
Language development for useful digital assets
With the development of the market, the cryptocurrency industry will also develop in the development of language. Regulation and widespread acceptance will change the way the media and public view and talk about digital assets.
As cryptocurrency evolves, it will retain its uniqueness — don’t expect the HODL, R&D talk and go to the moon to fade away — but it is imperative that the broader group of blockchain investors feel comfortable in the space.
It may sound simple, but the focus on integrating the languages of crypto and corporate finance has allowed us to work with institutions over the past 10 years, from new banks, fintech companies and brokers to banks, hedge funds, and family. offices.
The development of languages comes as more and more large investors see the long-term value of the time-proven blockchain as they begin to diversify large holdings, including cryptocurrency, thus increasing the correlation between these new assets and legacy assets with a history. the value. For example, gold. Or bonds or paper money backed by the central bank.
In business, you are judged by the company you own, so we wouldn’t get a warm hug if we didn’t use the language of financial services and regulators more broadly.
However, there is reason to believe that cryptocurrency is being priced as a commodity, not as a digital currency – US Federal Reserve Chairman Jerome Powell told Congress in 2019 that bitcoin is a “speculative store of value” like gold. But bitcoin is not everything, it is the most traded one. The industry needs to stop focusing on a specific use case for technology and start talking more about money, investing, financial management, and intelligence.