The panel discussion ‘Reimagining roles and how regulated industry leaders are shaping the future of finance’ at the London Blockchain Conference (May 21 – 23, 2024) aimed to explore how to bridge the gap between traditional finance and digital assets, with a focus on regulation and achieving a system as reliable as conventional finance.
Laurence Lewandowska (Operation and Finance Director at BSV Blockchain) moderated the discussion, which featured:
- Nestor Palao (Head DLT and Corporate Clients at Sygnum Bank);
- Wojciech Kaszycki (Chairman and Founder of Mobilum);
- Hlynur Thor Björnsson (CEO of Orange Gateway).
Introducing the panellists and their companies
The discussion started with the panellists presenting their companies and how these are facilitating the transition from traditional finance to digital assets, considering both technological and regulatory challenges.
Palao highlighted how Sygnum Bank is focused on onboarding traditional asset holders into the digital asset space with trust, leveraging their fully regulated status. They provide solutions that cater to the specific needs of the crypto industry, believing that more regulated entities are needed to facilitate broader adoption.
Orange Gateway, originally focused on the Icelandic market, is now expanding internationally, as Björnsson explained. They aim to simplify access to crypto for broader audiences, particularly through a fiat on/off-ramp for PSP (Payment Service Providers), making it easier for everyday users to buy crypto assets.
Mobilum, Kaszycki’s company, offers digital and prepaid cards linked to crypto wallets, allowing users to convert digital assets to fiat for everyday use. Their debit card program is globally accessible, while a more region-specific credit card program is developing where digital assets can be used as collateral for loans.
Current challenges in regulation
After this introduction, the panellists discussed the challenges in the regulatory landscape for digital assets.
Kaszycki highlighted the positive impact of recent developments like the BTC ETF and the MiCA (Markets in Crypto-Assets) regulation in the EU. He pointed out that while banks are cautious about crypto due to their strict regulatory environment, these developments signal a growing acceptance of digital assets in traditional finance. The challenge lies in the need for clear regulations, which forces banks to tread carefully.
Björnsson emphasised the ongoing issue of fraud and market manipulation in the crypto space, which poses a significant challenge for regulators. He mentioned that as regulators aim to clean up the space, it will help legitimise and stabilise the market, benefiting consumers.
Palao noted that regulatory approaches vary regionally, with Switzerland, Abu Dhabi, Singapore, and others showing progressive attitudes towards digital assets. He pointed out that regulators often struggle to apply traditional rules to the innovative nature of digital assets. However, he acknowledged that some regions are making strides in creating clear, forward-thinking regulations that align with the needs of the digital asset market.
Perspectives on adoption
The discussion then centred on the institutional adoption of digital assets, highlighting different strategies for aligning with regulatory frameworks and scalable blockchain solutions.
Björnsson emphasised their strategy to align with the BSV blockchain, a scalable blockchain, to meet the future demand for tokenised products and services. He believes that as digital assets evolve, scalability will be crucial for institutional adoption, and positioning their exchange to support this market is a long-term goal.
Kaszycki discussed the importance of regulatory compliance, especially with the upcoming Markets in Crypto-Assets (MiCA) regulation in the EU, which will introduce regulated stablecoins. He stresses the need for institutions to fit into the regulatory framework to enable seamless, fast, and secure digital transactions, contrasting it with the slower traditional banking system.
Palao highlighted the outdated nature of traditional payment protocols like SWIFT and the technical and regulatory challenges institutions face when entering the digital assets space. He argues that adopting blockchain technology can address these issues by providing a more efficient and trustworthy system.
