Crypto is likely to integrate into the future financial system

Hong Kong Monetary Authority (HKMA) CEO Eddie Yue recently said that cryptocurrencies are likely to play a central role in financial systems in the future, despite recent problems in the sector.

Yue spoke at the G20 meetings on July 17 and said he doesn’t think crypto and DeFi will go away even after the LUNA incident. While admitting that they might be held back, Yue has always promoted the benefits of technology. He said:

“The technology and bushy innovation behind these developments are likely to be important for our future financial system,”

Yue said successful encryption protocols could be modified to adapt to the current financial market. He also highlighted the importance of comprehensive regulation that can support the healthy growth of this implementation.

Bitcoin as part of every wallet

Former Blackrock executive Edward Dowd, ignoring Yue’s comments, also recently said Bitcoin would become part of everyone’s wallet.

Dowd also argued that bear market conditions are not the end of crypto. However, he also differentiated Bitcoin from other cryptocurrencies and said it would likely beat gold in the future.

He said:

“Bitcoin is here to stay. It will be part of everyone’s wallet. At least with Bitcoin, you can trade it digitally, and gold is a much harder sell for me. I’m not against gold, and having gold is not a bad idea,”

He compared Bitcoin to Amazon during the early days of the internet. According to Dowd, 90% of cryptocurrencies will crash, just like 90% of online businesses did during the early years of the internet. Bitcoin is like the remaining 10% of those years, which became Amazon.

Like-minded public servants

Yue and Dowd speak the same lines as US Senators Cynthia Lummis and Kristen Gillibrand. The duo recently introduced a bill to integrate cryptocurrencies into the financial system. The bill appoints the Commodity Futures Trading Commission (CFTC) as the regulator of the crypto market and aims to fully integrate crypto into the US financial system.

Another government office that agrees with the rest is the Bank of England (BoE). The bank has spoken fondly of the crypto sector for years while being cautious about volatility. Recently, BoE Deputy Governor for Financial Stability Jon Cunliffe also compared the crypto industry to the early days of the internet. He said he was confident in the future of crypto and encouraged its integration into the financial system. However, like Yue, Cunliffe also called for a regulatory framework.

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Don F. Davis