The Banking Executive Magazine - October Issue 2022

Virtual Assets Market Growth and Adoption can create their own blockchains while using the Polkadot secu- rity. 10. Litecoin (LTC) - Market Cap: Over $9 billion: Litecoin (LTC), is an open-source blockchain proj- ect launched in 2011. LTC is fre- quently considered as silver compared to Bitcoin’s gold. FUTURE OF VIRTUAL ASSETS Advances in technology, low returns, in real terms, on traditional assets such as equities, fixed income instru- ments, real estate among others, as well as the need for greater financial inclusion will increase the focus on virtual assets globally. Virtual assets are making new investment cate- gories possible and even accessible to retail investors. The mainstream- ing of the virtual asset market is an inevitable trend with the potential to transform financial markets signifi- cantly but also with attendant risk. Due to their digital nature, investors in virtual assets are directly exposed to fraud, theft and cyber-attacks. Sim- ilarly, the virtual asset market is also prone to higher than usual risk of market manipulation, market abuse, and insider dealing by market partic- ipants. Hence, it is becoming in- creasingly exigent to balance the need to explore the benefits from usage of virtual assets as well as pro- tecting investors and the financial system at large. The inherent risky nature of virtual assets underscores the need for proper investor educa- tion on the workings of the virtual asset space as well as an appropriate and robust regulatory framework to safeguard the integrity of the finan- cial system and ensure the participa- tion of only reputable players in the market. Various forecast from financial ex- perts around the world attempt to predict the future of virtual assets. Our predictions inspired from analy- sis by KPMG and Hong Kong Securi- ties & Futures Commission (SFC) are: • More Virtual Assets Service Providers VASPs: In the future more Virtual Assets Service Providers VASPs may be licensed. • Integration of Virtual Assets Service Providers VASPs in the financial ecosystem: There are signs of a new era where VASPs may be- come part of the traditional finan- cial ecosystem. • Institutionalisation of Virtual Assets Service Providers VASPs: In the next years, we expect to see more VASPs follow the institutionaliza- tion route. • Virtual Assets innovation: New vir- tual assets innovations, business models, and fast product develop- ment will be witnessed in the fu- ture. • More virtual assets services: Tradi- tional financial institutions will add to the competition, setting up their own virtual asset services. • New Central Bank Digital Curren- cies (CBDC): New digital curren- cies will be developed across ISSUE 166 OCTOBER 2022 the BANKING EXECUTIVE 41