In a recent interview, Henry Arslanian expresses his opinion on the future of the crypto markets and why he believes that numerous institutional investors will enter the market.
As 2019 comes to an end, many look back at what the crypto industry has achieved this year. However, an equally interesting, if not even more interesting topic is the question of what the digital asset market will look like in 2020.
The battle takes place in Asia
In an interview with Bloomberg, PwC’s Asian fintech and crypto leader and chairman of the Fintech Association of Hong Kong, Henry Arslanian, tries to answer these questions.
Arslanian starts off with Libra and explains that Facebook’s quasi-cryptocurrency has prompted central banks to become more interested in cryptography. In his opinion, banks react very slowly to virtual currencies. Today, however, over 70% of central banks worldwide deal with cryptocurrencies.
He believes that the next few months will bring a big change in the crypto interest of large, transnational organizations. China is an important issue in and outside the industry as it prepares to launch its own Central Bank Digital Currency (CBDC), which will be the first of its kind.
In fact, Facebook CEO Mark Zuckerberg even points out that China is one of the reasons the U.S. should act quickly on crypto. He believes the U.S. needs to make more progress on cryptocurrencies. In the meantime, Libra is said to bring about a big change in the world of international transactions.
Arslanian comments that around $ 500 billion a year is transacted across borders. The majority of it is sent by more than 250 million migrants – and Zuckerberg expects Libra to play a major role in this area.
Institutions will turn to crypto
When asked about the potential impact on Bitcoin and other older cryptocurrencies, Arslanian said that “Bitcoin is still the mother of all cryptocurrencies.” Libra is still dependent on fiat currencies as an underlying, while BTC is decentralized.
He also discusses taxation and explains that there has been a lot of regulatory clarity in this area over the past 24 months. The IRS has taken the lead, creating much more clarity about crypto taxation in recent months.
As a direct consequence, Arslanian expects other institutions to become involved from 2020 and beyond. Another reason for the engagement is, however, that institutional customers are developing a greater interest in cryptography.
In the area of digital assets, there are many regulated solutions such as crypto-custody, funds and regulated instruments such as Futures. These tools will enable traditional market participants to connect with the crypto ecosystem in a familiar way.
At the same time, according to Arslanian, there are many digital and virtual banks that are emerging.
The virtual banking battlefield is in Asia, and Arslanian said eight of them have already been approved by the Hong Kong central bank.
Finally, he raised the value of virtual assets in video games. While there is a risk that they could be used for money laundering, there are also numerous opportunities in this sector.
Players could use unique items within the games – including weapons, skins, and more. Players can own the items, trade with them – and know that they are unique.