Crypto Execs Say Finance Isn’t Ready for Digital Transition

 

(Bloomberg) -- Traditional finance has a long way to go before it’s ready to embrace digital currencies, say crypto executives. 

Many companies are still focused on quarterly profits and shareholders, but that model is going to be challenged in the next decade, speakers at the “Digital Money 2030” panel at the Singapore Fintech Festival said Tuesday. 

Tim Grant, the CEO of SIX Digital Exchange, said the future financial system should benefit everyone. 

“A bank that will not move this into their mainstream and be willing to give up a lot of their revenues now to secure their future will end up without a future,” said Gigi Levy-Weiss, a general partner at NFX. Changpeng Zhao, the CEO of Binance, the world’s largest cryptocurrency exchange by volume, agreed. 

“There are only a very few traditional organizations I see today that actually embrace crypto and blockchain and they are most likely to do well,” he said. 

Digital currencies have gained popularity this year as prices soar. 

Central banks from China to Europe to the U.S. are studying whether to create their own versions of digital currencies. 

Bitcoin is up about 170% and Ether has more than tripled since the start of the year. Meantime, institutions and investors are rapidly jumping into the space.

However, there are still significant issues on the road to digital evolution. 

Zhao noted that it’s still very difficult for consumers to hold cryptocurrencies securely. Levy-Weiss mentioned privacy, since many of these systems would be able to track people’s every transaction. 

Levy-Weiss said bigger countries should have an easier time implementing a digital currency. 

The difficulties experienced by Facebook Inc. and the Libra currency project -- now renamed Diem Association -- show that it’s the opposite for companies, where the bigger ones will get more pushback for their plans, he said. 

Levy-Weiss is on Facebook’s Advisory Council. 

“There’s more regulatory focus on these companies that will make it tougher for them to succeed in this field,” he said. 

“If anything I would expect there’s a chance smaller companies will do much better when it comes to sneaking under the radar and then growing fast.”

©2020 Bloomberg L.P. Source: bloombergquint.com