What the top crypto execs predict for the industry in 2022: Regulation and a Big Tech ‘brain drain’

What the top crypto execs predict for the industry in 2022: Regulation and a Big Tech ‘brain drain’

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Sam Bankman-Fried, CEO of cryptocurrency exchange FTX, at the Bitcoin 2021 conference in Miami, Florida, on June 5, 2021.

Eva Marie Uzcategui | Bloomberg | Getty Images

Cryptocurrencies have had yet another wild year.

Bitcoin , the world’s largest digital asset, has seen a roughly 65% gain since January — with some ten to twenty percent swings in between. It brought in a crop of new, individual investors along the way as payment giants like PayPal started letting users trade crypto. More billionaires and institutional investors dove in to help legitimize the asset class.

The industry now sprawls well beyond bitcoin. NFTs, blockchain-based videogames and “ Web3 ” are top of executives’ minds heading into next year. Regulation remains as the biggest uncertainty.

Here’s a look at what some of the industry’s most influential executives had to say. FTX CEO, Sam Bankman-Fried

The 29-year-old founder and CEO told CNBC he doesn’t expect legislative action to be the immediate answer for “regulatory clarity.” Especially since it’s “pretty hard right now to get things through Congress.”

It’s just as likely to be cobbled together from a series of statements, enforcement actions, and “other indications” to set the guardrails,” Bankman-Fried said.

The CEO is still bullish on Solana as an alternative to Ethereum. But it’s possible that a new blockchain pops up as the “Holy Grail” that would eventually be able to host a million transactions per second. Right now, he said there are “very few even trying to get that point.”

“There will be substantial fleshing out of the crypto regulatory systems over the next few years.”

“Most banks have effectively decided internally that they will be entering the crypto ecosystem. But how and when they do it is going to depend a lot on the details of regulatory structure.”

“There’s enormous worry about stablecoins right now. But it’s pretty straightforward to address. You have attestations, or you have an audit from a regulator.”

“The thing that people are worried about with stablecoins is are they stable? If you can address that, you’ve addressed most of the worries about it from a customer protection and a systemic risk perspective. It’s not that hard to do. So I’m cautiously optimistic that that’s where we’re going.” Circle CEO, Jeremy Allaire

Jeremy Allaire, Co-Founder and CEO, Circle

David A. Grogan | CNBC

The CEO of Circle is calling for more use of dollar-pegged cryptocurrencies, or stablecoins, by e-commerce firms, consumers and financial institutions. Circle, which is set to go public via SPAC, operates its own stablecoin called USDC.

Allaire expects to see more institutional adoption and celebrity trendsetters lending their brands to crypto through NFTs. DAOs, which rely on crowdfunding, may even “challenge venture capital investors on some of the largest and hottest deals in crypto,” he said.

The biggest threat? “Incoherent and inconsistent, hastily formed regulations and policy,” Allaire said.“Even in an environment where the Fed raises interest rates, investors and businesses will be hungry for the high-yield opportunities offered through digital assets. So expect to see institutional adoption of digital assets balloon — directly, through ETFs, or custom yield-generating products.”“There is bipartisan recognition that blockchain and crypto technologies represent a U.S. competitive advantage, especially if properly regulated, so new legislation and laws will come quicker than many people expect.”“In 2022 stablecoin adoption will continue its upward trajectory. We believe that dollars on the internet will soon be as efficient and widely available as text messages and email.” Bitfury CEO & former head of the OCC, Brian Brooks Brian Brooks, chief executive officer of Bitfury Group Ltd., speaks during a House Financial Services Committee hearing in Washington, D.C., on Wednesday, Dec. 8, 2021.Stefani Reynolds | Bloomberg | Getty ImagesBrian Brooks, the former Acting Comptroller of the Currency, said there’s now consensus among lawmakers in Washington that crypto is here to stay. He expects more blockbuster funding rounds after a record 2021, continued mainstream understanding of the crypto space.For example, not all “crypto” are currencies, or meant to act like currencies, he said.“Retail adoption is there and will continue to accelerate, but for those established Wall Street firms and other financial services companies that are not already involved in the crypto ecosystem, it is a matter of “when” not “if”.“The need for clear regulatory action that creates a sustainable framework to allow crypto and Web 3 to grow in the United States will reach its tipping point.”“The level of activity and innovation occurring in the space is too great to ignore, as is the risk to American competitiveness in technology and capital […]

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