At IVS Kyoto 2023, BTSE CEO Henry Liu, event host Chaval Jiaravanon and fellow panelists Takeshi Chino – Country Manager, Binance; Mohammad Naufal Alvira – Business Development & Sales VP, Indodax; and Huy Nghiem – Founder & CEO, Finhey, came together to discuss the crypto landscape after the dramatic collapses seen in 2022.
Encompassing lessons learned from 2022, bullish sentiments on the future of crypto, and the essential nature of both CDBCs and stablecoins – we’ve provided a recap below if you weren’t able to be there in person!
What Can the Industry Learn From 2022’s Greatest Collapses?
Henry splits the lessons exchanges can learn from 2022 into two categories. Firstly, for exchanges and operators. For operators, Henry says, the idea of blockchain is to promote transparency. So it’s important that exchanges don’t obscure their flows or operate their own trading desks constantly – exchanges have the tools to deliver transparency, and must offer these tools to their users.
Secondly, for retail investors, Henry thinks the key lesson is much simpler – don’t choose an exchange based on extraneous factors like F1 team affiliations. Doing your own research on the transparency and flow of the exchange you choose to trade with is crucial.
Regulators: How to Work With, Not Against
Henry agrees with other panelists that transparency and communication should be paramount for customers, exchanges, and regulators. Companies often avoid the tough questions regulators pose, but engaging with them openly can often lead to more comfortable relationships. The assurance provided to regulators translates into comfort for customers, which is ultimately good for everybody. Despite some regulatory hurdles in places like the U.S., progress is being made, especially in Asia.
Stablecoins: A Better Form of Money
Henry argues that in the current crypto landscape, stablecoins are undoubtedly the strongest pillar of cryptocurrency. They provide an avenue to risk-free assets in a market filled with volatility. Henry shares his hopes for the future of stablecoins – they should first be regulated properly – then, each jurisdiction should have multiple issuers of each stablecoin. Henry goes as far as making a strong prediction for the future of the asset – a 10x market cap increase for stablecoins in the next two years.
The Co-existence of CBDCs and Stablecoins
Henry believes both CBDCs and stablecoins have their place in the economy, and are not mutually exclusive. The financial industry needs both international settlement currencies like G7 currencies and domestic stablecoins for local payments – and stablecoins differentiate themselves with programmability and transparency – which Henry believes makes them a simply better form of money. Henry believes CBDCs will manage the economy’s M1 money supply, but stablecoins are also required for regional needs and cross-border settlement.
A Bullish Outlook For 2024 and 2025?
There has been a noticeable decline in scam projects preying on retail investors in the current bull market run, and the trading environment is also healthier, with improved liquidity and regulated onboarding/offboarding of stablecoins. Henry shares a strong bullish sentiment for the industry in the coming years, and precluding any large macroeconomic factor, expects a movement into healthy trading ranges.
The Crypto Market: What’s Missing Right Now?
While we have a plethora of stablecoins pegged to various assets, Henry believes the missing piece of the crypto puzzle is a multitude of venues for redemption and transfer. The key to unlocking the full potential of stablecoins is having entities and countries across the world that can accept, transfer, and settle using this asset.
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Note: BTSE Blog contents are intended solely to provide varying insights and perspectives. Unless otherwise noted, they do not represent the views of BTSE and should in no way be treated as investment advice. Markets are volatile, and trading brings rewards and risks. Trade with caution.