- Ripple’s Asia Pacific Head is optimistic on Crypto’s future.
- He said that the FTX mess hurt the market.
- He highlighted the need for a regulatory framework.
The Asia Pacific Head of Ripple Labs Inc. Rahul Advani said that cryptocurrency needs to offer real utility and that the collapse of FTX was ‘incredibly damaging.’
Cryptocurrency has struggled to establish itself in mainstream economies. El Salvador is the only country where cryptocurrency is a legal tender. Nay sayers call out crypto as a failure citing slow growth and low popularity over a decade after its creation.
In a statement to a major crypto media house, Adani emphasized that the FTX mess shows that the industry must move away from ‘hype cycles’ and must focus on fostering ‘real utility.’
Advani said that FTX would definitely attract a thorough examination of crypto’s regulatory framework and that the government would consider its stand on crypto technology.
Regulations that are progressive and ‘flexible’ are the need of the hour in the industry are required to instill confidence in customers. “[These regulations] must include robust measures for consumer protection but also recognize the different risks posed by business-facing crypto companies,” he added.
However, he added that strong reactions could be detrimental to innovation: “What we don’t want to see is a knee-jerk response that could stifle innovation within the sector.”
The International Monetary Fund (IMF) called for more regulations in Africa’s crypto market. Australian government has also reiterated
Regulatory authorities in the US have been blamed for not preventing the FTX debacle which wiped out billions of dollars in customer money including investor funds. Earlier, CFTC commissioner Summer Mersinger stated on November 18th that it was time to reconsider crypto regulations.
It is notable that FTX’s mess is an international mess. The US, the UAE and the Bahamas will be involved in the legal proceedings which may result in little to no retribution for customers.
The Ripple executive warned that a “one size fits all” approach would be harmful since each company in the crypto space is different because of unique risk profiles. Essentially, he called for regulations to be flexible and subject to companies’ risk profiles.
Advani noted that risks were associated with standards for conduct including separation of business accounts, declaring conflict of interests and providing “retail investor safeguards.”
The industry was already in the crypto winter phase, the FTX collapse exacerbated confidence and flow of funds. Self-custody of cryptos is the new fad with people losing faith in institutional grade entities in the industry like exchanges.
Crypto’s future literally depends on the industry’s ability to convince the customer of a its utility – and not just make tall promises of a financial revolution – and to win the government and regulatory bodies’ trust by setting the highest standards of safety and security.
Source: https://www.thecoinrepublic.com/2022/12/13/ripple-regional-head-calls-ftx-collapse-incredibly-damaging-says-crypto-needs-to-offer-utility/