Throughout 2022, the cryptocurrency sector sent out shockwaves that hit investors and those interested in entering into the market — particularly Wall Street and fintech — with the most recent collapse of FTX hurting the development of trust between Wall Street, fintech and cryptocurrencies.
But Wall Street is still committed to entering the crypto industry, said Adam Levine, vice president of corporate strategy at Fireblocks.
“In a word, yes,” Levine said at Benzinga’s Global Fintech Deal Day on Thursday. “Wall Street and financial institutions are really interested in what cryptocurrencies have to offer, seeing the future of financial services being digitized and tokenized — that’s where we’re seeing a lot of activity right now.”
Back in 2021, hedge funds and international clients traded $1.14 trillion worth of crypto through Coinbase Global Inc. COIN, up from $120 billion in 2020 to more than twice the $355 billion retail investors traded.
“These institutions have spent months, and in many cases over a year, looking at what the right strategy [to enter the space],” Levine said. “We’re seeing the noise over the last few months, very unfortunate, but that’s not derailing their commitment.”
John Avery, strategy and product lead at FIS Global, said heading into 2023, fintech is most excited about the use cases for the cryptocurrency sector; three of them, specifically.
“The first,” Avery said, “is connecting traditional finance system, processes [and] operations into digital assets.”
“Tokenization of real-world assets,” Avery said of the second use case. “Using Web3 rails for traditional assets, as a new form of technology and infrastructure to process and power those assets.”
For the third use case, “We’re also seeing demand for stablecoins and other forms of value transfer use cases in [business-to-business] processing scenarios,” Avery noted. “These could be for domestic payments, cross-border payments and corporate treasury.”
Heading into 2023, Levine agreed there would be a proliferation of stablecoins, specifically on a global scale.
“If you look at some markets, Brazil’s central bank has been pretty active in the CBDC space as a leader,” Levine said, “but the private sector is continuing to innovate and I think we’ll see a lot more there.”
Avery's expectations for 2023 are to see more collaborations among companies, helping bring the crypto infrastructure to life.
“Really to make Web3 use cases at scale, [and] that requires more than bilateral partnerships and collaborations. It requires industries coming together with all of the actors in a particular end-to-end transaction flow,” he said.
Photo: Gaspar Marquez for Benzinga
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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