This EBC panel about the institutional engagement was moderated by Sebastian Becciu, Senior Ops Specialist at Sygnum Bank. Panelists include Daniel Vegue, Partner and Chief Strategy Officer at Block AM, Maurice Mureau, CEO & Co-founder of HODL, and Lior Zaks, Legal Counsel at Stake Capital.
The conversation started with the panelists’ emphasis on the significant potential for institutional investment in crypto. They highlighted the need to attract institutional players to invest in digital assets and Web3 infrastructure. According to Sebastian, the inclusion of private debt, private equity, and private assets will increase the total market cap of the crypto market to a staggering $575 trillion!
Regulatory Guidelines as a Bridge to Institutional Investment
The panelists acknowledged the importance of regulatory frameworks in facilitating institutional participation. They stressed the need for clear regulations to build trust and provide a bridge between traditional finance and the crypto industry.
Daniel acknowledged the MiCA regulations as a positive development, positioning Europe as an advanced jurisdiction of regulatory frameworks. Lior encouraged people in Web3 to participate in conversations with regulators to shape future regulations.
More EBC insights on MiCA regulations and DeFi:
- The Potential of Stablecoins and the Impact of MiCA Regulation
- MiCA and the Challenges of Regulating Crypto
- Regulations Unmasked: Decoding Banks and Laws in the Crypto Realm
Key Factors for Institutional Engagement
Citing Consensys Insight Report, Sebastian identified the essential factors to attract institutional investors: custody, compliance, execution, monitoring, and reporting. Access to the crypto market needs improvement, but advancements in user-friendly technology are expected to address this issue.
All panelists agreed that compliance with regulatory guidelines is a crucial aspect for institutions to enter the crypto space. The establishment of robust custody solutions will also be vital to instill confidence in institutional investors.
Convergence of DeFi and TradFi
Panelists expressed optimism about the convergence of DeFi and TradFi, believing that the distinction between the two will eventually dissolve.
In Daniel’s opinion, Ethereum’s deflationary system and staking rewards that generate yields in a macroeconomic climate of inflation, for example, is a strong incentive for institutional investors to enter the crypto market.
Everything that’s now in traditional finance will be there in decentralized finance and improve. It’s not a question of “if” but a question of “when.” We’re going quicker than a lot of people think.Maurice Mureau, CEO & Co-founder of HODL.