The Banking Executive, Issue 155, November 2021

This “mainstreaming” of Blockchain applications marks the end of the first stage of the technology’s develop- ment. Now, with the help of regula- tors in a range of countries, cryptocurrency is entering the next phase of its evolution: becoming an investable asset. Regulators around the world are cracking down on Cryptocurrencies. China has banned them. The United States is considering a range of meas- ures aimed at reining them in. The Bank of England is developing capi- tal requirements for financial institu- tions that hold them. But, far from spelling disaster for the crypto indus- try, regulation is vital to its long-term prospects. The crypto market’s development began with what can best be de- scribed as the “product innovation” stage. Blockchain technology en- abled people to approach old ques- tions (What is money? How can art be created and valued?) in new ways. This resulted in highly visible applications, such as virtual curren- cies and tokenized artworks. But it also enabled less glamorous innova- tions in a wide range of areas, from tracking container shipments to im- proving the integrity of health-care records. Will Blockchain’s impact be revolu- tionary? It depends what you con- CRYPTOCURRENCIES: Towards Becoming Investable Assets the BANKING EXECUTIVE 18 ISSUE 155 NOVEMBER 2021