Beware of simplified crypto views, says El-Erian
“[Stablecoin] is an important invention that deals with both the supply and the demand side so it’s a useful addition to the ecosystem - as long as they are stable. It’s going to continue to expand and it’s not going away,” he said. However, he noted, regulators would be likely to resist stablecoins becoming dominant. “You can be part of the system but if you are going to dominate the system you are going to trigger a reaction from regulators,” he said. A similar situation applies in the potential for Bitcoin to become a global trade currency and replace the dollar, El-Erian argued. With payment systems being “weaponised” - for example in Russian banks being excluded from SWIFT – El-Erian said authorities would remain wary of anything that undermined the potential for payments to be a tool for geopolitics. He also argued that the addition of Bitcoin to US reserves should not yet be seen as significant. Adding seized cryptocurrency to US reserves
Extreme views on cryptocurrencies from both supporters and critics are misplaced, according to Mohamed El-Erian, Chief Economic Advisor to financial group Allianz, President of Queens' College, Cambridge and Chair of Gramercy Funds Management LLC Management. Speaking at the Digital Asset Summit in New York last month, El-Erian said: “From day one people said it’s either a fraud or it will dominate everything, and I always said these corners are misleading. It’s going to be something in the middle.” The key to exactly what role digital assets will play in the financial ecosystem will depend crucially on adoption, he said, noting that some mainstream finance firms who a few years ago called crypto a ‘fraud’ were now significant players in the asset class. El-Erian’s balanced view also extends to the potential for stablecoins to replace the dollar, or for Bitcoin to become a global trade currency.
El-Erian: Stablecoin, set to expand
amounted to a movement in the balance sheet, he said, and not a change in capital flows, which would only occur if the US substituted fiat reserves for Bitcoin.
Illicit activity is tiny fraction of crypto activity
are out there,” Levin said. "If you think about the industry having a USD3 trillion market cap, a few billion dollars is a lot of money but it's not in comparison to the total.” Chainalysis provides investigation, compliance and anti-fraud software to more than 1,500 organisations, including leading financial firms as well as regulators and law enforcement services. Based on its insights, Chainalysis produces an annual Crypto Crime Report, a survey of all illicit activity carried out through blockchain. “We want financial institutions to
Illicit activity in crypto amounts to just 1% of the market, according to industry-leading compliance specialists Chainalysis. Speaking at the Digital Asset Summit (DAS) in New York last month, Chainalysis co-founder and Chief Executive Jonathan Levin said criminal activity needed to be traced and eradicated but was lower than many people thought. “Criminal activity on crypto is still less than 1%. Even though we talk about these big hacks or compromises it's still a very small amount, given the total amount of assets that
understand that not all crypto is money laundering and to make sure that they have the data at their fingertips,” Levin told the DAS audience. Chainalysis is used by BCB Group as part of its advanced compliance and monitoring systems and Kym Routledge, BCB’s Global Head of Compliance, said Levin’s message was a vital one. “Illicit activity is a very small part of the crypto industry, and we maintain the highest standards and ensure we have the right tools and skills to keep our clients’ assets secure,” she said. attendees at Paris Blockchain Week, said Jerome Prigent, MD for BCB Europe. “We are broadly supportive of the EU’s regulatory approach to crypto, but there are also some elements of the Trump agenda that we see as positive. Each market will set its own rules, but hopefully there will be enough common ground globally to allow digital assets to flourish as a truly international market.”
Trump serves up food for thought in Paris
large and small will be liberated to invest, innovate, and take part in one of the most exciting technological revolutions in modern history.” The comments reinforced the growing sense that the US and Europe are pulling in different directions on digital assets with the EU instituting a more structured regulatory environment. Trump’s crypto stance will be a key topic of discussion among
President Donald Trump threw down the gauntlet to Europe in his address to the Digital Asset Summit in New York declaring that his policies would enable the US to “dominate crypto”. In an unscheduled address delivered remotely to the main auditorium, Trump attacked the tighter regulatory approach of the Biden administration and declared: “With the right legal framework, institutions
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