A recent Forbes article provides insights into what could be building up for cryptocurrencies in the upcoming year. Clear indications are driven by the prospects of improved regulation for virtual asset service providers and the halving of Bitcoin.
To begin with, Alexander Schell, Executive Director of the Crypto Valley Association, expects reports of the FATF to clarify understanding of how Virtual Asset Services Providers (VASP’s) operate and as a result help cryptocurrency adoption rates. To be specific, he believes that “Increased clarity from the FAFT on its position relating to VASPs globally will be particularly helpful… As the industry focuses on innovation and enterprise adoption, it is imperative that regulators do not implement a policy that will create obstacles and stifle the development of the industry.”
To reiterate Alexander’s point, Nick Cowan, CEO of the Gibraltar Stock Exchange Group, equally weighs in on the importance of regulation in the future of digital currencies. On the basis thereof, the rising interest of Central banks and their adoption of blockchain technology could also ameliorate this growth. To quote, “We have also seen many Central Banks looking into the creation of their digital currencies and implementation of blockchain technology in their legacy financial ecosystems.
Furthering this point is Florian Glatz, Co-founder of Fundament Securities as well as Benoit Coeure of Bank for International Settlements. The latter asserts the advantages of digital currencies and the building appetite amongst the central banks, specifically the European Central Banks (ECB) and their involvement in financial intermediation. Moreover, the expectations following the launch of the digital yuan by the People’s Bank of China will create speculation on digitizing the Euro.
The price volatility surrounding digital assets in 2019 will see a decline. A un – optimistic Vaibhav Kadikar of CloseCross suggests that “In the new decade, the high volatility of the asset will become a distant memory. Price stabilization will spur a renewed interest from institutional investors to enter the space”.
Showing a slightly more doubting outlook is Dave Hodgson, Director of NEM Ventures. To quote accurately, “In 2019, we saw an increase in governments, regulators and central banks engaging with blockchain and crypto in general – sometimes positively and sometimes not so positively. Notably, the Financial Action Task Force (FATF) recommendations around Know Your Customer (KYC) continues to have an impact on how crypto exchanges operate; the Libra association continues to divide regulators, customers, and the crypto industry, and the launch of the first Security Tokens by both major institutions (Societe Generale) and national markets, such as Germany (BitBond), is making waves”. With that being said, he is still open to see where trends such as Bitcoin’s halving and the events following it will do to grab the public attention.
The final points to consider are the releases of predominant technology upgrades by bigger chains, for example, ETH 2.0 and NEM with Catapult. With that considered, there remain hesitations on many of these factors following through with certainty and whether a stabilized year is ahead to come for the cryptocurrency market.
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