On the topic of navigating the decade ahead, four prominent contributors took the stage to discuss elements which we might expect for the future of web3. This Token2049 panel include Founder of Tron, Justin Sun, Head of investment of Jump Crypto, Saurabh Sharma, COO of FTX, Constance Wang and CEO of LongHash Ventures, Emma Cui (Moderator).
While the traditional finance industry constitutes hundreds of trillions of dollars, Justin reminded us how the “crypto space is still very small, at ~1T dollars.” Relative to other asset classes we know of, there is plenty of legroom to grow.
Although the route towards mainstream might not be in sight as of yet, Emma mentioned the “collaborative nature of crypto” might be key in exponentially expanding the space.
Regardless of how you participate in the space, either as a builder or an investor, the crypto space has gone through quite a bit of change over the last 18 months.
While there has been a lot of pursuit in decentralized stablecoins with various designs etc, some of which brought happiness in the form of positive yield-bearing, others brought disappointment in the entirety of the mechanism.
“Stablecoins is one of our priorities and focus right now… it has been our focus since day one.” Justin shared his thoughts after reflecting on how stablecoins are the best “store of value” for the people in Asia.
For the most part, the vast majority of people in Asia have little access to the US dollar. Due to the high barrier of entry in the form of financial costs and regulations, blockchain wallets possess an alternative “for them to have their own bank account,” in a completely cost-free manner.
Along with the rising adoption of stablecoins, we will also see chatter among the CBDCs. With multiple variations across different countries, conversations around stablecoins will be either “driven by national agendas, either in the point of view of fear or how people will make it more composable.” However, Saurabh cautioned that there still needs to “be experimentation and research on the algorithmic side.”
Trade-offs with Stablecoins
While stablecoins position themselves in potentially re-writing the way payments happen, certain trade-offs in the adoption of stablecoins are bound to surface.
The most prominent is regulation. Shape regulation is crucial, Saurabh added “either it (stablecoins) will be shut down or become the guardrails in managing the risk with the understanding of it helping innovation.”
“Even though it seems like the regulators are coming in hard, I always feel our working relationship with regulators should be in an open and friendly dialogue, a two-way convosation.”Constance Wong
The crypto space should normalize convosations with regulators in a proactive manner. Perhaps education is needed before the two entities can “collectively work together.”
While the crypto space has often been viewed to be a quick means for a cash grab, we have moved past the “ICO of sh*t coins and scammy stage, and instead, everyone is now building.” The space showcases new technology and innovation never seen before prior to the genesis of the finance industry.
Especially, for crypto to be a “thing” in the future, the need to have these conversations with regulators is ever potent for the success of the space, and we are seeing positive signs of that.
Efforts are made in hosting various governmental bodies and leaders because, at the end of the day, crypto is here it solve a real-world issue, which is payments. While their (regulators) interest in solving this problem has piqued, understanding the broader concept of blockchain might garner a longer time in implementation.
[Editor’s Note: This article does not represent financial advice. Please do your own research before investing.]
Featured Image Credit: Chain Debrief