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Henri Arslanian’s Top Trends in Crypto to Keep an Eye On
FinTech, AI, Blockchain
Henri Arslanian had a simple goal at the Block O2O: Institutionalization of The Digital Asset Fund Industry conference: to share all the latest trends in crypto and let the audience decide what they mean for business, investment, or the crypto industry. He ended up blowing a few minds.
Speaking to a packed crowd, the PriceWaterhouseCoopers crypto and fintech chief laid out several crypto industry trends that he believes is worth keeping an eye on.
He began with regulatory clarity, saying that this is one of the biggest problems he sees since people are often very naïve about regulators. While most think regulators don’t understand crypto, Arslanian says that the average regulator is “waaay more knowledgeable” about the crypto industry than your average banker, adding that they know exactly what’s happening and more likely than not, they have a team dedicated to working on crypto regulations.
Arslanian did say however that it’s all very complicated for regulators behind the scenes, with three camps, a) the principle-based regulators, b) those who are trying to fit crypto into existing framework, and c) the bespoke rulemakers all trying to make the best of it all.
They’re biggest problem? Ongoing monitoring. But it’s getting better and as such, a lot of bad apples will be going to jail. Arslanian said that to combat this, he and his team and has made their best practices books open to the public, with – much to his delight – several exchanges and institutions adopting them.
Another thing that he says needs to kept an eye on are sanctions. Governments around the world are looking at crypto very intently, and with countries throwing sanctions at each other, they’ll be looking at crypto with a very sanction-minded view.
The next thing Arslanian talked about – something that he emphasized was a big deal – were the new crypto “transport” rules. All FATF members need to implement these, apparently, and the only time they don’t apply is when you’re using a tiny ledger or using it on a personal basis.
Arslanian was also amazed by the level of best practices implemented by crypto exchanges. This trend, he says, leads him to believe that the top 10 to 15 exchanges have better KYC than traditional banks.
Industry perception also remains something to watch. With stuff like Quadriga going on, it could be very hurtful for the industry. As he always says, the community “is only as strong as it’s weakest member.”
Cybersecurity is also a hot topic. “If you’re a hacker and you’re not targeting crypto exchanges, you’re an idiot,” said Arslanian. He goes on to say, however, that exchanges are getting better and better prepared for this.
Another trend Arslanian looks at is the growth of the crypto funds industry. Institutions have a lot of questions about these funds, from their viability to directorships, but AuM has been steadily growing.
Speaking of institutions, the increasing involvement of institutional investors in crypto is one of the biggest trends. It’s incredibly difficult for them to do – practically impossible for some – but it’s happening and steadily growing. There are three ways they do this says Arslanian; some merely put capital into crypto firms, others partner with them – think Nomura and Ledger – while others, like – Fidelity – set up new crypto entities. The last route, according to him, is a trend their starting to see as well.
Central bank cryptocurrencies are another thing to watch says Arslanian. Central bankers used to call bitcoin and its ilk “only for drug dealers,” but there’s been a shift, he says, after saying that the best thing to buy drugs with is cash, anyway.
Central banks control money, and the rise of crypto threatens everything from monetary policy to the dollar’s hegemony. Amazon’s potential coin is a serious problem for them, and so is Facebook’s Libra. People trust these companies, and with Facebook boasting 2 billion users, things are going to be interesting.
Arslanian then asked “what is the killer app for a billion users? What will send crypto to a billion users?” The answer? Potentially, China’s One belt one road. “What happens here with 60 countries with no common currency? Often with no infrastructure. Forget SWIFT – this could be the opportunity,” Arslanian said.
Micro-payments are also very fascinating for Arslanian. “The one part we didn’t focus on the Libra announcement is their focus on micro-payments. This is actually one of the biggest benefits that we have.”
Before wrapping up, Arslanian had one piece of advice “if someone comes to you saying he’s a crypto expert – run away!”