Industry experts explored the opportunities, challenges and regulatory updates on cryptocurrencies to support digital asset adoption in a chat at the Fintech Talent Festival 2022 in London on November 15.
The session on 'the future of crypto assets, moderated by Anthony Calpas, founder & managing partner, Karukera Capital, began by discussing crypto assets.
A bright future for crypto assets depends on three factors, pointed out Eleftherios Jerry Floros, CEO, Elysian Impact Investing: interoperability, standardisation and regulations. "Assigning the same valuation across the entire range of crypto assets will open the gates for more investors," Floros said.
Ijeoma Okoli, director/founding member at Digital Economy Institute / Impact X Capital Partners LLP, emphasised the need for an improved understanding of cryptocurrencies to deliver value to consumers "cheaply and quickly".
Financial inclusion—key to growing business—would encourage more investors to participate in the economy, added Okoli.
"Lawmakers lack sufficient understanding of crypto. It is incumbent upon members of the secretary to proactively engage with legislators for ensuring better clarity," said Okoli.
The prospect of remediation and the 'low-hanging fruit' of tokenisation was of interest to Tarun Sachdeva, chief strategy officer, Ziglu. Emphasising the need for laying the foundations of a governed framework for newly introduced tokens, Sachdeva commented.
"The crypto infrastructure should not just move money but also value for customers better. The goal is to build trust surrounding custody, educate and communicate," he added.
The industry is not a level playing field at present, Sachdeva remarked, adding that technology and security remain top challenges.
According to Simon Ware, associate director (Innovation), Aztec Group, it is ironic how many fintech companies crib about coming under the ambit of regulatory bodies.
"Just like traditional assets take cautious anti-money laundering measures, regulatory bodies need to strengthen security and make room for more value-added services," Ware said. According to him, unaffordable or inaccessible private market funds—represented through tokenised products—would also benefit the crypto asset industry.
"Two questions arise: Is regulation going to discourage people from investing in the crypto space with tokenisation or facilitate the delivery of slightly different product ed to them?" Ware stated.
Professional audits are of little help, he added, since crypto awareness lies in educational resources. Coinbase, a crypto exchange, offers such educational programs, Ware pointed out.
Confident about a "huge future in digitalisation of assets", Jamie McNaught, founder and CEO, Solidi Ltd, highlighted the role of ownership for a brighter future of the crypto industry.
"There needs to be clarity in proof of reserves and ownership. I am hopeful about a system in future that holds exchanges separate from the custodian system for enhanced safety," said McNaught.
The UK's Financial Conduct Authority (FCA) would benefit from further standardisation in crypto asset regulation, the experts agreed. The session concluded with the speakers rooting for a certain degree of international cooperation in the mutual recognition of crypto assets.
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