Finally, the 12th July 2019 CryptoCompare Digital Asset Summit went down. The event, attended by 700 crypto enthusiasts who included coin holders, institutions, crypto honchos and those from the regulatory space, happened at the famous Old Billingsgate market. It was a 6-session conference moderated by several individuals, all engaging different distinguished panelists.
Of course, coffee was in plenty and participants, keen on capturing all the essential information given out, couldn’t be separated from taking notes. But generally, it was worth remembering, mainly because of the lively discussion on pretty much everything in the cryptocurrency and the Blockchain industry.
The following are some of the major talking points during the meeting:
What’s in Store for Stablecoins?
This topic couldn’t have been ignored, especially with the head of CoinDesk as the chief moderator and Blockchain’s Garrick Hileman being among the panelists. Other in the list included Jennifer Senhaji from MakerDAO, Marcos Viriato from Parfin and Ekon Gold’s Simona Macellari.
They all spoke about Facebook and its GlobalCoin, the current Tether debate, the development that the MakerDAO platform is undergoing and the general need for stablecoins in the future. Basically, they talked about:
- Why Facebook-powered ‘libra’ coin could mark another massive milestone moment in the history of the cryptocurrency industry. The team also touched on what the move could mean, especially with regards to moving all the Facebook’s 2.4 billion users into the crypto bandwagon. But although Facebook employees would get a part of their earnings in crypto, the team couldn’t help wondering if the coin would be tradeable. Further, the question they were asking was whether GlobalCoin would be a payment getaway and compete with PayPal or be another coin like Bitcoin.
- If there’s a systematic risk in the crypto market presented by the ongoing Tether debate, especially at a time when it is getting even more explicit that there’s a need for greater transparency. Tether has greatly help stablecoins get more publicity, but as long as questions on auditing continue, regulators still have a reason to worry. Many of these institutional regulators believe that, even though a stable asset is essential, it is only through transparency that its adoption will grow.
- The growing need for a trust-minimized stablecoin which would operate without a counterparty, and why MakerDAO is the best, most suitable candidate. DAI has been recording a 20% increase in its user base every month, which is great for its intended role. But even with that, the crypto industry hasn’t seen a solution which could extend evolution yet. Facebook’s Libra coin will most likely ‘compete’ with other stablecoins, although questions on whether everyone would accept GlobalCoin.
- The fact that we should expect a stablecoins’ marketplace designed to smoothen the transition from the ‘traditional’ world of finance and the ‘new one.’ The market should also reach out to the underbanked.
Thoughts from Regulators’ Point of View
It was another important topic, moderated by Lawrence Wintermeyer of Global Digital Finance. Panelists internalizing the topic comprised of Martin Etheridge from the Bank of England, HM Treasury’s Gillian Dorner and Samantha Emery from FCA.
They covered diverse topic, including how institutions perceive cryptocurrencies, the role of the government-appointed Cryptoassets Taskforce, and the overall regulatory space. They mainly dwelt on the following:
- A visible change in tune about cryptocurrencies in the mainstream world, especially amongst financial institutions; they used to see them as agents of ‘systematic risk.’ Today, they all sing a song about BTC being a hedge against traditional banking. This is clearly highlighted by major institutions creating their own digital assets, the way JP Morgan came up with ‘JPM Coin.’
- The Cryptoassets Taskforce, which basically comprises of the Bank of England, the Treasury, and the FCA, is geared towards making the UK the go-to financial hub across the world. The task force has been reviewing risks as well as benefits associated with cryptos, especially with regards to:
- The risks they have on average users
- Their predisposition to aiding illegal activities
- Chances they have in the market
- How they could affect national stability.
- The team also works to get rid of the risks and support the various benefits of cryptocurrencies. They are fighting to roll out EU’s anti-money laundering directive even as they haven’t noted down any benefits of the coins.
- Some of the findings they have identified from their qualitative research were the minimal risks consumers across the UK face. They also noted that the general understanding of digital assets is still low.
- The view of the Bank of England isn’t to perceive crypto assets as the alternative to money, primarily because of how volatile they are. Also, they pose no material threat to the country’s financial system, although the famous banking institution can’t dismiss the same happening in the future.
Challenges and Opportunities that Exist from Finance to Cryptocurrencies
Paul Gordon of Quantave moderated the talk, and panelists were made up of VanEck’s Gabor Gurbacs, Sam Chadwick from UBS, Pina Emirdag representing State Street and Pendo’s Ruth Wandhofer.
The discussion covered topics on how the mainstream financial institutions could be rallied to engage in cryptocurrencies, using Blockchain to settle stuff and the whole question of Bitcoin ETF. The talk mainly focused on:
- Why the use of Blockchain in settlements is excellent for the industry’s progress. They talked about UBS and the whole Settlement Coin initiative, including its attempt to be a digital currency, but can’t quite guarantee both the liquidity and the velocity between parties. They also cited exchanges as places where the final value could be felt.
- Blockchain and its role in creating the much-needed disruption in the traditional banking institutions – it is the new frontier. For them, however, the issue isn’t about adoption, but rather how they will find the balance between adopting it and maintaining their overall business operations.
- According to the panel, all the accurate assets’ pricing, custody answers, and surveillance have to be in place if crypto ETF has to earn the approval. However, it might take a while since everything revolves around several service providers, mainly those whose reputation is unsurpassed in the traditional markets.
- They also spoke about the crisis pitting Bitcoin and all it stands for and the various requirements of the corporate world. Bitcoin is self-sovereign and immune to censorship, which stops it from getting fully aligned to the needs of enterprises.
Investing in the Space and Getting Funded: what the VCs had to say
The topic was moderated by Teana Baker-Taylor from the Global Digital Finance and had Shane Kehoe from SVK Crypto, KR1’s George McDonaugh, Ami Ben David from Spice VC and James Roy Poulter from The Reserve.
They talked about the changing investment trends, advised cryptocurrency entrepreneurs as well as Blockchain growth labs. Some of the key points from the whole talk included:
- They said that space is still open to all, only that VCs would need to be zealous with a track record of getting things done.
- Even though space is still new to crypto, its essence couldn’t be underestimated. The new crop of talent has to significant on creating a reputation among them.
- VCs are expected to take time while adopting new projects as this depends on how comfortable they get on a project, plus the fact that fewer VCs are already in place.
- The next record-breaking IPOs will possibly come from a space-oriented investment, though it is hard to predict whether it will happen from the Silicon Valley, New York, London, or any other place.
The topic of Market Integrity and Protecting the Consumer
The talk also centered on the above-stated topic, with the moderator being FT Alphaville’s Jemima Kelly. The panel comprised of Binance’s Ted Lin, Ethfinex’s Will Harborne, Kraken’s Austin Alexander and Chen Arad from Solidus Labs.
They talked a lot about the whole issues of market manipulation, the essence of transparency in exchanges and well as ICOs and IEOs as they are today. The main points from the discussion, however, can be summed up below:
- Fake exchange volumes, which less-established exchanges apply to give a false impression that they also trade high volumes and thus give investors a belief that they too have the liquidity. It is fraudulent activity, similar to wash trading and the only solution to it would be the use of data aggregation websites.
- It is excellent to note that honest exchanges are pushing for the exposing of their dishonest counterparts, although regulators probably contribute to it. Data in the market hasn’t really pointed to where the problem is.
- Traders also seem to be opting for exchanges they can only trust, a move which appears to be creating a competition between established exchanges. The popularity of IEOs further evidences this.
- Crypto markets are a lot different and free more than the highly regulated traditional markets like equity markets. Tokens in the crypto space can be listed on multiple platforms, unlike the current market, and this enhances price discovery.
- America isn’t doing much and only seem to be pushing exchanges offshore using the tight regulations it’s rolling out. Kraken and a couple of other exchanges located within the US seem to have felt it already.
What the Future Holds for the Crypto Assets Market, plus the whole Idea of Institutionalizing the Digital Assets
Isabel Woodford moderated the talk from The Block. Panelists selected were CoinShares’ Meltem Demirors, Max Boonen from B2C2, George Zayra from BeQuant and Caspian’s Chris Jenkins.
They spoke in depth about the infrastructure in the crypto space, the apparent institutional interests, Bakkt as well as BTC’s cypherpunk roots. From the discussion, the followed were the main highlights:
- Who the “Big Guys” joining crypto are since a majority of prop traders, hedge funders and brokerage firms are already in it, even as the large asset management companies like the Schroeder’s are yet to. They, however, wondered if the industry needs them or whether there’s a retail opportunity beneath their involvement in crypto.
- They said the big institutions’ involvement in crypto wasn’t due to the gaps that exist mainly in infrastructure or regulation and the risks involved. The panel called for an evolution, saying it should happen before the institutions become fully immersed into it.
- There’s still an aura of doubt regarding Bakkt and its role as the ‘game changer’ is postulated to be. It even has a lot to prove, including whether its entry into space will be worth the hype or the whole move will damage the credibility of crypto future.
- There are still questions on whether institutional involvement impedes on Bitcoin’s ‘anti-establishment’ concept. The panel argued that a more significant investment in crypto would benefit the community, even though the elephant in the room remains the coin’s self-sovereignty and its incompatibility.