FT Currencies Correspondent Eva Szalay recently hosted a webinar roundtable with industry experts to discuss if regulation will kill the crypto hype.
The virtual discussions throughout the webinar explored the future of cryptocurrencies. The panel considered how regulations could make or break private cryptocurrencies, if national regulators are willing and able to collaborate on a global crypto framework and the biggest risks that crypto markets pose to the global financial system. The full webinar is available to watch on-demand.
The rapid rise of crypto
With the emergence of bitcoin in 2009 — the first decentralised cryptocurrency — many others have been created since then and at great pace too. Now, the number of different cryptocurrencies available are in their thousands. Much is still unknown about the future of crypto but what is clear is that digital currencies are changing and evolving quickly.
Rules and guidelines made today can fast become outdated. The panel suggested that to overcome these challenges regulators will need to keep up with the fleeting technological developments of the crypto world. This is true especially with the multiple ways of viewing digital assets, as commodities, securities and as currencies. The way crypto is framed and regarded will impact the future and how it is regulated.
Sometimes it's a commodity, sometimes it's a currency and sometimes it's a security. We need to adapt to this new thing which is led by technology.CEO and Co-founder, eToro
Balancing the global market
During the webinar, the expert speakers explained that the global perspective on crypto regulation is shifting and entering a pivotal stage. Currently, there is little in the way of clear frameworks and financial regulators are expressing their concerns. The panel of speakers highlighted that a balance needs to be struck between creating a global market, allowing for financial freedom and aligning crypto with local laws and regulations. On the other hand, balancing the global market is as much about constructing governance but also ensuring that these regulations still allow for growth, innovation and maintain high standards.
Staking is just the crypto vernacular for a lending product, but don't want to call it a lending product because then it perhaps could fall into the regulatory space.Executive Director, Crypto UK
Experts in the crypto world predict that cryptocurrencies will overtake cash and if this is the case, regulations will need to be implemented quickly. Giles Keating sits on the Board for Bitcoin Suisse AG and participated in the webinar roundtable. He emphasises that, “regulation is needed very quickly. People will start using them as cash. As the transaction costs come right down, they really will take over from debit cards used day to day or Apple Pay.”
Crypto integrating into mainstream markets
As the crypto market grows, questions are being raised around how crypto will integrate and interact with pre-existing governing and regulatory bodies. The webinar panel suggested that in order to merge crypto into the mainstream financial markets, many companies will look for business-ready crypto frameworks with robust and clear structures.
In understanding this, the way that crypto players operate today is significantly different to traditional banks and even that alone changes the nature of reporting on it. The webinar panel highlighted that there are fluctuating levels of reliability in sources reporting on crypto compared to the more traditional way of how banking is reported on. An example of this — pointed out in the webinar — is that unlike old-school banking, crypto players have a reputation for getting into intense twitter debates with regulators. This is unconventional compared to how financial service organisations have previously operated.
A 2 trillion dollar market that has emerged out of nowhere, globally, by the people for the people. A very romanticised and democratised view of the markets. Some bad actors in some places, but a lot of positive innovation and eventually it's really about financial freedom.CEO and Co-founder eToro
Relive the discussion in full by watching the webinar on demand.