The Evolution of Cryptocurrencies and Digital Assets

Countries and governments are scrambling to accommodate these assets and institutions, while more and more investment banks are ready to embrace these new markets in order to expand their services and make themselves more attractive to clients.

President Biden’s recent executive order titled “Ensuring Responsible Development of Digital Assets” demonstrates that the United States wants to be seen as a leader in international cryptocurrency governance and ultimately a good place to do business. .

The UK government has also announced plans to regulate certain cryptocurrencies, while Dubai promises detailed regulation after recently granting its first virtual asset licenses to exchanges including Binance.

Despite concerns expressed about crime, regulatory oversight, environmental sustainability, and the impact digital currencies could have on already established markets, these developments show that crypto is moving from its existential phase to its institutional phase.

Huge pricing uncertainties, settlement issues and criminality are being replaced by a more mature ecosystem with a growing base of market makers serving more traditional investors. However, the market volumes, locations, and number of digital assets are now too large and rapidly changing to be analyzed and managed by what was in place during the existential phase of crypto.

These new opportunities also present a new set of challenges. New exchanges, tokens, coins, futures, options, and exchanges require systems and processes to help all parties—investors, exchanges, and regulators—keep up with the rapidly increasing pace.

Stability and Agility

Market participants need help analyzing the digital asset space, and the technologies and processes created and perfected by financial institutions that trade and manage existing asset classes provide a solution.

Spotting and maximizing market opportunities or reacting to problems requires strong data capability and the fundamentals of crypto trading and regulation are very similar to those of traditional financial markets

These markets have long recognized the value of improved data management and analytics to generate alpha, reduce fraud, stay compliant, and act faster. While cryptocurrencies and digital assets exist in a more dynamic market where there is an inherent distrust of doing things the “traditional” way, technologies that provide stability and agility in existing markets can do the same here.

Whether it’s investors seeking alpha with automated and/or algorithmic trading, exchanges looking to add new features, or authorities requiring market regulation, there are many cases of use where existing technologies, such as real-time data management and analytics platforms, can make a significant contribution to evaluate.

Stay stable during change

The application of technologies used in traditional financial markets will increase the stability, security and efficiency of crypto.

Rather than stifling innovation and growth, we believe this will give current and potential market participants the confidence to increase their focus and investment, which will lead to more innovation and growth, not less. And competition and choice within the financial services industry can only be a good thing.

A 2018 Harvard Business Review article examining the impact of these new digital currencies identified lower costs, increased security and safety, real-time and more competitive payments as likely benefits for consumers and businesses over what they are experiencing today.

The article also argued that these currencies could also connect unbanked or underbanked segments of the population to the wider financial system, a critical issue given the alarming state of the global economy.

However, the authors of the article also sounded a very real note of caution saying that without strong legal and economic frameworks, there is a risk that these currencies, in this case stablecoins, will be anything but stable. Indeed, we’ve seen recent examples of this with Terra Luna, though again, it now seems to be stabilizing.

The robust legal and economic frameworks that allow traditional financial markets to operate are largely enabled by technology, and while challenges undoubtedly exist as to how crypto and digital assets will operate in existing jurisdictions, we see it as further evidence of a transition from the existential to institutional acceptance.


With the right regulatory and governance frameworks in place – those that provide security and stability without stifling innovation – there is no reason why cryptocurrency should not be accepted into traditional financial structures.

Indeed, it can be argued that cryptocurrencies are simply new asset classes, and a compelling case can be made for their inclusion in the global financial services community.

With the right technologies, processes and regulations, risk can be kept to an acceptable level while the innovation that the relatively nascent industry is famous for can be encouraged, albeit within parameters deemed acceptable by governments and regulators.

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