KUALA LUMPUR, 7 JANUARY 2019 – Over the past decade, we have seen the cryptocurrency industry go through a challenging period which is often labelled as the “Wild West” era. The usage of this term is due to several reasons which are the volatility of cryptocurrencies, challenges of owning the cryptocurrency, security issues and lack of a regulation framework. The complexity of the dynamic force of the crypto industry creates reluctance in traders, new ones and experts, to trade/invest in this asset class.
The “Wild West” era in the cryptocurrency industry is coming to an end as organisations such as JP Morgan, Morgan Stanley and Citibank has taken steps to usher in a new era. JP Morgan has already announced initiatives to use blockchain for asset tokenization, whereas reports on Morgan Stanley has indicated it is gearing up for crypto derivatives trading while Citibank has launched its DAR (Digital Asset Receipts) to make crypto ownership more accessible.
Start-ups in Asia such as FINAFEX are gearing up to provide crypto-based services beyond what current exchanges are offering. FINAFEX is interestingly unique in that it is a crypto service provided by a traditional investment bank and it is leveraging its investment banking license to offer import-export trade settlement, crypto custody and fiat-to-crypto-to-fiat trading and remittance.
Its export trade settlement component has created a large interest amongst international traders in Asia with trade figures in the ASEAN region alone being close to $3 trillion annually. This cuts the Letter Of Credit issuance by putting the export/import transaction on the blockchain and using asset-backed crypto for trade settlement.
In the coming year, a heated area in the industry will be the issuance of security tokens for an asset or revenue-backed projects. The advantage that FINAFEX, which has investment banking credentials, allows the advisory, issuance and in due course the listing of securitized tokens on the FINAFEX exchange. The security tokens can be in the form of tokens backed to physical assets such as gold, minerals or even real-estate, collateralized digital asset tokens, crypto bond notes or tokenized income bearing instruments amongst many others.
Initiatives of these organizations enables the development in the crypto industry along with a further emphasis on regulated environments will drive the adoption of crypto as an asset class. In the next five years, crypto will be part of the portfolio diversification option amongst institutional investors and family offices and will drive the market capitalization on crypto assets to $20 trillion.
Since the Bitcoin bubble burst early last year, the crypto market has evolved and was never the same as before. If there is one thing to be learnt from the past decade, experts predict that the next bubble cycle is expected to be even bigger than before. The rebalance in the cryptocurrency ecosystem provides an exciting new opportunity for the global investors to find gems waiting to significantly explode in value. Ultimately, the winners will be those who may be placing their bets on these drivers of the new crypto economy. For more information on FINAFEX, please visit https://finafex.com/
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