The big auditing company KPMG presented a new study, in which it concluded that cryptocurrency will take a lot of time to gain savings status, and the institutionalization of the industry will be a turning point.
In a study titled “Institutionalization of cryptocurrency assets,” analysts explain that assets like Bitcoin (BTC) will not soon become a full-fledged medium of exchange or savings due to insufficient level of trust in them, as well as due to problems with scalability. In order for the situation to change, the cryptocurrency industry needs to go through a stage of institutionalization.
“The participation of a wider range of financial companies will help the tokenized economy to earn the necessary level of confidence and scalability, and also contributes to the growth and maturity of the cryptocurrency market,"-Constance HunterKPMG Chief Economist
Institutionalization of the researchers called the large-scale involvement in the cryptocurrency business of financial and technological companies, banks, payment organizations, exchanges and brokers-dealers. The participation of such significant players will ensure the widespread adoption of cryptocurrencies and confirm their ability to eliminate the shortcomings of the modern global economic system.
According to the authors of the study, today the cryptocurrency market is going through hard times: the number of speculations at the retail level is still large. Individual entrepreneurs are betting on the potential benefits of cryptocurrency, and not on what it actually gives, which increases the likelihood of risk. In addition, the cryptocurrency industry is only partially regulated so far, which also makes it unsafe.
Researchers at KPMG point out that reaching agreement with regulators is indeed a daunting task for the cryptocurrency community, but cryptocurrency companies need to make it clear to regulators what product they are doing. As soon as the legal aspect of this business becomes clear and unambiguous, it will become much easier for large financial organizations to enter the industry.
Apparently, the stage of institutionalization for the cryptocurrency industry is already close. So, Coinbase crypto birth has already received permission to create a custodial service for cryptocurrencies in the territory of the State of New York, which means that institutional investors can be confident in the legal reliability of this service. And the summer report of the independent rating agency ICORating showed that institutional investments in the ICO market have increased dramatically.
“Large organizations have a different set of requirements than retail consumers. For them, transparency, legal compliance and government regulation are important in order to comfortably carry out transactions with cryptocurrencies,"
In conclusion, the KPMG researchers noted that despite all the difficulties, the cryptocurrency industry has a bright future. In their opinion, the use of cryptocurrency will become the norm in the future. But, of course, this will happen only when financial institutions can engage in cryptocurrency activities without fear of risk, and the regulation of the industry will become reasonable and transparent.
“… new business models and market participants can significantly redefine the industry in the next few years,” the researchers concluded."
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