Virtual currency regulation is a good thing!
Efforts to introduce reasonable and enforceable cryptocurrency regulation in Europe are encouraging traditional financial companies, namely traditional finance (TradFi), to expand decentralized finance (DeFi) services.
Since its first release, Moni Talks Cryptocurrency Platform Three years ago, I went public with my support for proper regulation of the cryptocurrency space. We have worked hard to ensure we comply with relevant regulations in our home country of the Isle of Man and seek regulatory approval in all jurisdictions in which we plan to operate.
My belief is that everyone in the digital asset space has a responsibility to: Protecting consumer and industry reputations. More than that, I believed that a lack of regulation was hindering the adoption of cryptocurrencies by major financial institutions, hindering their growth and adoption.
The latest news from Bitstamp seems to suggest that I was right.
Major banks are making a big move into virtual currency
During an interview with CoinDeska senior executive at Bitstamp, the oldest cryptocurrency exchange, revealed that the company is in talks with three major European banks to introduce cryptocurrency services in early 2024.
Commentators have suggested that MiCA, the European Union’s approach to crypto regulation, is another sign that it is making it easier for traditional financial institutions to engage with digital assets.
This shows that regulations designed to protect the industry without strangling it, developed through serious consultation and real hearings, can produce results.
Contrast that with the situation in Europe, where new regulations have given big banks the confidence to consider offering more digital asset services to what is happening in the US. On the other side of the Atlantic, regulators are taking the lead; U.S. Securities and Exchange Commission, is cracking down on cryptocurrencies. Why would a reputable company partner with an industry under attack by the SEC?
stamp of approval
As MiCA begins to give banks and other financial institutions the confidence to consider offering new digital asset services, Bitstamp has successfully established itself as the “go-to” service provider.
This is thanks to innovative white label products that allow banks and fintech companies to obtain licenses to offer their own crypto trading products.
Robert Zagotta, global chief commercial officer of the Luxembourg-based company, said: “Over the past six to nine months, we have seen a significant increase in inquiries about this service from large European banks.
“We are in advanced discussions with three such banks, which are well-known European banks. We hope to make an announcement in the first quarter or so.”
Although Zagotta did not name the bank, this is clearly good news for Bitstamp and the crypto industry. At least in Europe.
Unfortunately, in the US (Zagotta is also the CEO of Bitstamp’s US division), we see exactly the opposite situation.
The constant stream of lawsuits against crypto players by the SEC and others is not only scaring traditional institutions, but also forcing major digital asset names to consider moving elsewhere. More welcoming jurisdictions like Singapore are gaining in popularity.
Transition is not about escaping regulation, but finding a regulatory environment that allows cryptocurrencies to function and develop while respecting consumer welfare. That is what the EU is trying to achieve through MiCA.
Against the backdrop of European rulemaking, HSBC, Deutsche Bank, and others have become a hot topic when they announced strategic alliances with digital asset companies.
Zagotta confirmed that Bitstamp is experiencing demand for a fully regulated swap product in Europe and is working on developing a solution.
Good things about FTX
The controversial collapse of FTX and the subsequent trial of founder Sam Bankman Freed and others, as well as the regulatory issues faced by Binance in various jurisdictions, damaged the reputation (and thus adoption) of cryptocurrencies.
But companies like Bitstamp, with a positive attitude toward well-written and sensible rules, are now Benefits from the decline in FTX.
In the first six months of this year, Bitstamp admitted about a third more companies than in the second half of 2022, when the FTX meltdown occurred, due to its “push-button” approach to regulation. Zagotta attributes this to FTX’s market share being redistributed, with many companies seeking the security of a regulated provider.
Like me, Zagotta believes the industry cannot afford a catastrophic event like FTX. Especially when it involves another name widely known outside of internal crypto circles like Binance.
easy for banks
Approximately 38 million people in Europe own or trade cryptocurrencies, 58% of whom are under the age of 34, 36% have annual incomes of $100,000 or more, and 82% have a bachelor’s degree or higher, leading to large banks. It’s no surprise that companies embrace digital assets.
MiCA regulations Similar to the Bitstamp discussion, it creates opportunities for collaboration between established traditional financial businesses and cryptocurrency service providers.
This is good news for mass adoption, at least in Europe, and will move the industry forward. In time, other regions will likely follow suit. This is a major change since May last year, when the European Central Bank said that cryptocurrency collaboration with banks posed a threat to financial stability.
The upcoming regulations signal greater market maturity, raise the compliance hurdles, level the playing field, and ensure that the oversight gaps that led to past violations never occur again. This will help avoid history repeating itself.
This is good news and shows how the industry can move forward. However, this will not solve TradFi’s reluctance to engage with cryptocurrencies overnight, and there is a long way to go before widespread adoption.
Brendan Beeken is an entrepreneur, commercial strategist, investor, philanthropist, and founder and chairman of the cryptocurrency community. Moni Talk.
Although Brenda’s success is the result of years of hard work, it was after a life-threatening heart failure that he crystallized his experiences, both good and bad, into a culture, ethos, vision, and values. It gave me a chance to understand exactly what he’s doing and why he’s doing it now.
His professional life is built on four pillars: Trust, Curiosity, Spirit, and Heart. This simple approach allows Brendan to identify what is important in his own actions and what he expects from others. His focus on ethics and clear goals has enabled Brendan to achieve success in multiple industries and fields, establishing a respected, trusted and leading position in the business world.
In 2023, Brendan was named among the Top 32 Business Influencers by the respected publication Business Leader in recognition of his expertise and thought leadership status.
