- For an event on the future of money, mention of crypto was few and far between
- Many finance players are finding promise in blockchain but are not yet sure of the use cases
Bigwigs dressed in button-up Wall Street suits representing the rails of traditional finance, from MasterCard to Visa, Stripe to JPMorgan, at the Money20/20 conference in Amsterdam this week largely relegated crypto to the sidelines.
The concept was more of a curiosity than a tangible sector of finance – with executives from crypto-native companies such as Ripple and Kraken championing digital assets.
Compliance and anti-money laundering units Chainalysis and Elliptic occupied a prominent floor space, directly across from each other at the entrance, like rivals vying for potential TradFi customers. Slightly further back were startups aimed at helping the institutional crowd gain exposure to crypto, such as Fireblocks and Copper.
Mainstage panels focused specifically on digital assets were typically tasked with analyzing regulatory pangs — like trust in DeFi, accompanied by jokes about the Terra debacle.
“There is no doubt that crypto has huge potential for development,” Lithuanian Central Bank Board Member Simonas Krėpšta said during one of Tuesday’s early sessions, titled “Until where can you go with Crypto FOMO?” Lithuania is home to some 400 crypto exchanges, Krėpšta said, but does not have an official licensing program.
Krėpšta added: “If the crypto industry wants to gain wider acceptance, there needs to be more trust between the community and the industry – stablecoins need to be stable. We need regulators to better understand the industry, but crypto needs to be bold enough and sometimes even volunteer for stricter regulation than traditional finance.
Stablecoins, stablecoins, stablecoins
In an offstage panel, Sendi Young, Ripple’s Managing Director for the UK and Europe, touted cross-border payments as the ultimate use case for digital assets (not surprising, given that business-to-business remittances are Ripple’s main sales driver).
Cyril Mathew, head of global crypto partnerships at Stripe, meanwhile detailed the company’s recent payout tests for Twitter content creators. Last month, Stripe moved to allow businesses to pay customers in crypto through the Polygon blockchain, starting with Circle’s dollar-pegged stablecoin USDC.
“Our first foray into crypto was in 2014 when we started accepting bitcoin payments,” Mathew said. “The market wasn’t quite ready – people aren’t trying to pay for goods and services in bitcoin, these are actually the barriers to retail payments.”
Mathew added Stripe, which wants to “serve and inspire internet GDP growth,” believes retail payments are all set to be disrupted by digital assets, but stablecoin payments “make a lot of sense. today”.
For an event on the future of money, bitcoin, ether and other non-stable cryptocurrencies received very little mention, apart from a tucked away “how to decarbonize crypto” fireside chat. in a “Sex and Drugs and Rock and Roll Bar” on the last day.
There has, however, been discussion of NFTs and the potential of Web3 to transform behavior. Perhaps more aptly, merging physical behaviors that have been around for thousands of years (collecting shiny objects) with the metaverse.
Vlad Panchenko and Ori Levi, CEOs of DMarket and NFTrade respectively, alongside Julia Morrongiello, Head of European Growth at Zero Hash, ultimately disagreed on whether gaming, ticketing or splitting exotic and illiquid investments were the killer application of NFTs.
“The potential for NFT tied to the elements of the game is what excites me the most,” Levi said from behind sunglasses, wearing a loud shirt that was somewhat out of place in the sprawling RAI conference center.
Levi continued, “People invest a lot of their lives in games, and with NFTs, you finally have ownership.” He predicted that traveling between metaverses with in-game NFT items will happen “very soon.”
On the main stage, Helen Hai, Head of NFTs and Fan Tokens at Binance, used much of her 20-minute spot to detail the philanthropy powered by the exchange’s charitable arm. She also presented the potential role of blockchain and NFTs in the “fourth industrial revolution” – a process intended to merge physical and digital constructs over the next century.
Crypto ‘custody’ could help close the gap
For Berlin startup Finoa, however, institutional interest has grown rapidly – and not just for stablecoins. A year ago, Finoa closed a $22 million Series A funding round led by major UK venture capital fund Balderton Capital. At the time, it had more than 250 clients, including German equity specialist Bankhaus Scheich – that number now exceeds 300.
The company has primarily served as a trusted (and regulated) third party – providing security for digital assets for various crypto market players, such as venture capitalists.
Marius Lunding Smith, chief strategy officer at Finoa, told Blockworks that the company is poised to become a “full-fledged crypto bank by retaining access to everything Web3, allowing institutions to participate in a way that they can understand”. In other words: under strict regulatory and safety parameters.
Smith said stablecoins were not a focus for customers, although there is demand for crypto-native interest accounts, which are usually denominated in US-pegged stablecoins.
Yet Finoa discovered a few years ago that bitcoin and ether claimed most of the demand. Now, crypto savvy investors – for example crypto funds that have just invested in a new token – want custodial and staking services for new Layer 1 tokens, such as NEAR, polkadot, tezos, flow and MINA .
On whether financial incumbents will move beyond their apparent obsession with dollar-pegged stablecoins, Smith expressed a holistic view:
“There will always be those who seek the highest returns that are high risk. We need to be there and allow participation and access for those who have that appetite. For others, it’s about making sure they can interact with the most common tokens in a way that makes sense – conservative, good returns that are more sustainable, secure, and lower risk.
And so, custody is necessary when offering digital assets to institutional types, Smith said. There are platforms that allow participation in virtually any cryptocurrency, which works if it’s purely a technology provider, but operating within regulatory limits is another story.
The crypto industry has a responsibility to ensure that the ecosystem can be understood by traditional systems.
“Otherwise we’ll never really get mass adoption,” Smith said.
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Crypto Zeitgeist Dominated By Stablecoins, Regulations Tech Tribune France
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