Gael Itier, CEO and founder of Akt.io, explains his vision of the cryptocurrency sphere and the development this technology is expected to benefit from in the coming years.
European regulations: a boon for the public vision of the crypto sphere
Despite the concern raised by the arrival of the regulations, it is important to note that their implementation takes a long time. The first discussions started in 2018, and it is only in 2022 that we see the first results.
European regulations could therefore take many years to implement, but just as long to change. However, despite their restrictive aspect and their controlling role, they represent a real boon for the sector; they will be a guarantee of quality for the general public, still reluctant to adopt digital currencies.
Until the restrictions came, the cryptocurrency industry did not follow a clearly defined direction. The profusion of solutions and crypto made available to users has undoubtedly contributed to suffocating the population that no longer knew where to turn. The scams are numerous and reported daily by the media; unsurprisingly, potential clients preferred to invest in more traditional industries.
This phenomenon has lasted for years and it is a shame to see regulations come so late, as thanks to them the cryptocurrency industry could have exploded much earlier.
The MiCa law and all other European regulations, in fact, will allow the different offers to be sorted. Less serious companies, which do not want to strive to obtain the necessary licenses (EMI for example) to be registered with governments, will have to close their doors. As for those who remain, they will have the opportunity to continue their activity in the world of crypto while maintaining an institutional approach and will not be bothered by the requirements of the European Union, given that the possession of a license will already have them adequate. with it.
As for the public, they will no longer be afraid to set foot in the sector as they will be able to count on trusted platforms that will offer them services that truly meet their needs. More people will therefore be interested in cryptocurrencies and global adoption will be easier.
However, the real adoption to the general public will be done by the blockchain
Far from being indispensable, regulations play a rather belated role in industry acceptance. Cryptocurrencies have also been very good at creating a place for themselves in society without them. However, in order to hope to attract the public, there are two main elements to keep in mind: trust but also values!
This is why blockchain could play an essential role in the global adoption of the industry, as it conveys very beautiful values that respond to the current concerns of society. Security and ecology are good examples – the blockchain system allows for fast and secure transactions as cryptocurrency companies are increasingly aware of the energy-intensive side of their business.
Thanks to projects like Ethereum 2.0, which addresses these two main problems, the population will be able to realize that the cryptocurrency industry shares exactly their own concerns and that it offers appropriate solutions to remedy. And what’s better than investing in a sector that is completely in line with its values?
Transparency has its role to play in the adoption of cryptocurrencies
If there is another value shared by the blockchain, it is transparency. On the contrary, it is an element that traditional banks forget to highlight, while it represents a real basis for cultivating customer trust. People who are not familiar with cryptocurrencies prefer to turn to the traditional banking system, because they believe that their use is more reliable. However, the phenomenon has dried up for years because taxpayers now know that the money they deposit into their bank account is used to enrich institutions to their detriment.
The blockchain will have no problem restoring people’s trust because, unlike banks, it is very transparent at the transaction level: we know where the money is, where it is going and many companies, like Akt.io, take great care to do i use them environmentally friendly.
As for the phenomenon of volatility and speculation to make money at all costs, it is one of the primary drivers that keep people away from the sector. Regulators are also afraid of it because they fear investors will lose their money. However, these are concepts that the blockchain continues to reject; on the contrary, it detaches itself from it and adds essential foundations to the evolution of the anti-monopoly strategy necessary for the success of the market.
To ensure total trust in the population, one should therefore get rid of the speculative aspect of cryptocurrency, even if this is not a fundamental problem. Bitcoin, for example, spearheaded the dark web rush and then speculation in 2017, before the bubble burst a year later. Bitcoin was worth $ 20,000 at the time, and the bursting of the bubble didn’t stop it from climbing to $ 45,000 later on.
The fault cannot therefore lie in the bubble but rather in the desire for speculation of Bitcoin users, which constitutes a real obstacle to the global adoption of cryptocurrencies. Overwhelmed by its reputation as a volatile currency, Bitcoin scares regulators and they do everything in their power to prevent a new crisis.
To endorse the phenomenon, a solution is possible: change the whole view that the population has of cryptocurrencies and also review what its users have of their cryptocurrencies. To do this, it is up to companies to lead the battle by brandishing pro-application values that will demonstrate the true usefulness of the blockchain. Originally, it exists to serve, to meet the needs of society and not to make easy money!
The information would remove the doubts of potential users
By demonstrating the usefulness of blockchain for the population, the industry informs the public but also the main regulators.
The European Central Bank recently called for global regulation of cryptocurrencies. This is incredibly difficult to set up and there is little chance it will see the light of day. The G7, the G20 and the United Nations, just to name a few, have completely different visions of the sector and demands from each other.
On the other hand, some countries like China have a very specific policy towards the sector, while African states would need it to become more bankable. The objectives and needs of the territories are too different to be able to achieve total unification.
This phenomenon shows large organizations’ lack of understanding of how blockchain works. Before proposing any regulation, they should ask for information from experts or actors in the crypto sphere in order to guide them on the main needs of the market.
Companies operating in the sector do not hesitate to contact the various competent authorities (CBI, AMF, etc.) and always have something new to learn; this is also what allows them to evolve correctly and develop at the same speed as technology.
The European Central Bank therefore has the means to find out, but its beliefs about the economy are so firmly rooted that the crypto sphere has a hard time changing its mind. Unfortunately, we will not achieve the frank democratization of cryptocurrencies without an explosion of goodwill on the part of these authorities. They remain, for the moment, opposed to the emergence of new financial markets that could compete with them.
Cryptocurrencies and the banking sector may or may not coexist
From an industry perspective, some actors might argue that regulators’ reluctance stems from a willingness to control the market; it would seem, however, that their motivations are rather the protection of the population.
Regulators are afraid of stablecoins, for example, because the structures that hold them do not have the glaring power and regulatory aspect of the Central Bank. Furthermore, the retail sector is now fully immersed in the cryptocurrency sphere; if stablecoins grow further, they will represent a significant share of fund holdings, competing with fiat currency.
But there is a real regulatory risk: something could escape us and allow, for example, a company to walk away with accumulated cryptocurrencies, or several billion dollars. In this case, the Central Bank should be able to compensate for the problem, but it may not have the capacity to do so. It would therefore be interesting for states to take an interest in cryptocurrencies and provide an infrastructure that will prove effective once adopted.
However, the industry can move closer to the traditional banking system and create a bridge between the two worlds. For example, it is already proposed to combine the advantages of the blockchain and those of traditional businesses with the creation of “Blockchain Booklets”. Functioning like a normal passbook, they welcome customer investments in fiat currency or cryptocurrency without risk or fees, with favorable interest rates. It will soon be possible to use cryptocurrencies to fill a shareable kitten or to save on behalf of their children. After that, credit cards will allow cryptocurrencies to be used like any other currency on a daily basis.
As for stablecoins, which are pegged to the dollar or euro, they are the perfect representation of fiat money on the blockchain. In essence, they are thus the witnesses of a possible coexistence. However, for the approach to be successful, they don’t have to compete with each other. Instead, stablecoins should be used to offer innovative products or services tailored to the needs of consumers. In this case, they will have a more utilitarian role than a monetary one and will be well regarded by governments, because they will not conflict with any virtual currency such as the digital euro.
Stablecoins could overtake Bitcoin
While close to traditional currencies, stablecoins are starting to compete with other cryptocurrency heavyweights such as Bitcoin. The USDT holding numbers continue to grow and amount to colossal amounts. Bitcoin is also in a very bad position compared to Ethereum 2.0, which risks further widening the gap with stablecoins. The new ETH creates excessive speculative movements that cause stablecoin adoption to continue to explode, albeit in a more linear fashion than other currencies such as BNB. It is therefore too early to say that stablecoins will be the next cryptocurrency revolution, but the phenomenon shows some interest from investors.
Finally, although their indexation to the dollar or the euro is not necessarily the engine of mass adoption, stablecoins occupy a legitimate place in the list of solutions that allow certain territories to develop a new economic system. Africa, South America or even Russia could thus bank while remaining competitive with other countries. Tether and his other acolytes could therefore hold some surprises for us in the future.
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