In an age of rapid digitization, Tales From the Crypto, a panel at today’s Money20/20 event, provided deep insights into the emerging trends of the crypto investment and regulatory landscape. FTI Consulting’s Steve McNew led the discussion, showing how digital asset custodian platforms are navigating the interesting intersection of web2 and web3.
Bridging the investment gap
The conversation was led by Martin Dave, co-founder of Palisade, a digital asset custody platform based in the UK and France. Palisade is a pioneer in bridging the gap between traditional investments and the crypto world, a critical step to enhance investor protection and portfolio diversification.
According to Dave, financial products are usually sold rather than sought after by the investor, and are often motivated by a desire to secure savings for future needs. While cryptocurrency adoption can be both institutional and retail, Dave stressed the reputational risk effect that is most important to institutional adoption. As Web 3 continues to evolve, including blockchain and cryptocurrency, it should provide enterprise-grade security and convenience.
Regulation as a shield
Regulation emerged as a focal point of the discussion. The importance of adhering to Anti-Money Laundering (AML) and Counter-Terrorism Financing principles was highlighted as a key aspect of maintaining the integrity of cryptocurrency investments.
(embed) https://www.youtube.com/watch?v=T5rnSJKMNFs (/embed)
As the industry is still advancing, the cryptocurrency regulatory landscape must be accommodating and flexible. Regulations, in essence, function as a set of best practices, evolving from past failures and adapting to the rapidly changing environment of Web 3. The importance of regulation extends beyond compliance and acts as a builder of trust for clients, particularly regulated custodians such as Palisade.
Artificial Intelligence and Blockchain: The Future of Compliance
Emerging technologies such as artificial intelligence (AI) and blockchain are offering promising developments in wealth management. Alpaca, an American financial technology company, believed in the potential of artificial intelligence to speed up back-office and compliance processes while enhancing investment applications.
AI and blockchain, when combined, can automate and optimize tasks to increase speed and scale. There is potential to use the blockchain to identify patterns of transactions by analyzing the patterns. However, improving the traceability of algorithmic recommendations remains a challenge.
Gender imbalance and geopolitical considerations
The gender imbalance in the industry and geopolitical considerations were other topics addressed in the panel discussion. The UK was praised for its infrastructure and wealth management framework, although the potential for growth in the investment applications space was recognized.
The panel discussion at the Global Wealth Summit 2021 emphasized the importance of enhancing confidence in wealth management. Amid negative media coverage of the cryptocurrency industry, panelists emphasized the positive collaboration between Web3 creators and regulators and the important role of low-cost and affordable investment platforms in expanding cryptocurrency adoption.