South China Morning Post: Cryptic Future

A cover story by SCMP on why crypto fans in Singapore, Malaysia and elsewhere are upbeat despite the crash and looming regulation, extensively quoted Oliver Wyman partner James Gordon.

He spoke about the recent crypto meltdown and its impact on Asia, and discussed crypto regulation in Asia and the implications on various players in the ecosystem.

“Crypto sceptics suggest market conditions point to the end of the ecosystem but it’s likely a more complex story,” said Gordon. Reasons for optimism included the fact that well-capitalised funds were taking the opportunity to gain stakes in businesses with negative cash flows, he said, adding that despite the lay-offs, there had also been an uptick in hiring in other parts of the ecosystem.

Banks could capitalise on the fragility of the existing infrastructure and offer “custodial solutions” for digital assets, for instance, leveraging the trust consumers have in them and their ties with regulators. “That’s just the tip of the iceberg for banks. The maturity of the underlying technology supports a wide range of propositions from payments to tokenisation to trading,” he said.

Central banks, meanwhile, could use the cryptocurrency meltdown to focus on erecting regulatory parameters and putting necessary frameworks in place. They could also plug the gap with cryptocurrency firms and accelerate the launch of central bank digital currencies, Gordon said.

“With major jurisdictions increasingly clear on their direction of travel, policymakers advocating for regulation to protect consumers in the wake of recent losses, increasing regulatory collaboration across jurisdictions, and market participants pushing for clarity, we should expect to see an acceleration of digital asset regulation ahead of us,” he said.

Read the full story here.