[TOKEN2049 SG 2024] How should we make crypto mainstream?

While many Singaporeans and tourists felt buzzed last week because of the annual Singapore Grand Prix Formula One race, it coincided with TOKEN2049, the world’s largest crypto event.

Following the crypto winter in the last two years, the industry is no stranger to scepticism from the mainstream audience and traditional financial institutions—a sentiment that several players in the crypto industry have acknowledged during both days of the event.

This leads them to set their eyes on one titular goal: to take crypto to the masses. But with many obstacles ahead after the slow crypto activity, what does it take to get to that level? Here’s a rundown:

1. Have clear and multi-dimensional regulations

Since the FTX market exchange crash in 2022, we cannot ignore the incredible amount of fraud in the industry due to the lack of clear and harmonised regulations. For Richard Teng, CEO of homegrown crypto firm Binance, it was a “wake-up call” for the industry.

In a panel discussion last Thursday (September 19), four industry leaders, including Teng, echoed a pressing need for more defined regulations as activity in the crypto space increases, making it crucial for policymakers to understand how the industry works fully.

However, regulating by enforcement is seen as “destructive” to the industry—Mike Belshe, co-founder and CEO of crypto giant BitGo, shared his frustrations.

“Unfortunately, a lot of legislators and regulators have to go back, and kind of relearn that, ‘Wait a minute, why is it the way it is?’ And then what’s different about this industry? And how we reply?” said Belshe.

Currently, the regulatory measures vary by country, which sometimes results in the politicisation of the sector. Anthony Scaramucci, founder and managing partner of SkyBridge Capital, who also had a short-lived stint with the Trump Administration, shared that the United States, in particular, needs to adopt the best practices that strain out politics.

It’s also worth noting that the presidential elections in the United States are ongoing at the time of writing, with former President Donald Trump and Vice President Kamala Harris contending for the title. Belshe has notably expressed his support for Trump following his support for the industry.

“We politicise the regulatory process in the US, and so it’s either hard left or hard right regulatory ideas. It’s not right or wrong for the industry. If you go to Dubai or a place like Singapore, they’re looking at it very clinically, and it’s almost an independent standard of regulation straining out politics,” Scaramucci explained.

Technology does not care about politics.

Jeremy Allaire, co-founder, Chairman and CEO of Circle

Allaire added that navigating the bureaucracies is also an obstacle for many crypto firms, where more things will need to be considered than to simply “copy and paste” what other countries have done.

In one instance, Scaramucci asked Teng, who had a 13-year tenure as the Director of Corporate Finance at the Monetary Authority of Singapore (MAS), on the factors inhibiting policymakers to engage with key industry players to spur improvements on the regulatory front.

Teng responded by stating that the lack of budget and resources can prevent an agency from devoting expertise to understand the sector, which does not become a priority when formulating a regulatory framework that generates revenue.

He added that regulators also need to consider the potential transformative impact that the crypto market has on traditional financial institutions, and that it is important to educate law enforcement agencies and government bodies about the sector and how they can better support their innovations.

“It must become an agenda. The agency must be given enough resources to give enough attention and improve pattern to try to do this,” stated Teng.

2. Making DeFi products more accessible

With Singapore having efficient retail fiat systems, it seems less likely that people will pivot to paying with cryptocurrency. However, a recent survey presented that crypto payments have become more common in the city-state, implying that activity in the space has increased globally and is on its way to revival.

In a keynote consisting of Decentralised Finance (DeFi) veterans last Wednesday (September 18), Rune Christensen, co-founder of Sky (previously known as MakerDAO), predicted that DeFi would reach its inflexion point within the next few months and that players will need to focus on making it easier to use.

“It already works. It’s already great. Now we need to sort of level it up, prove to the world that [DeFi] has become more mature,” Christensen stated. “The market is ready for this.”

Kain Warwick, founder of platforms Synthetix and Infinex, echoed the same sentiment and used his experience launching Infinex to solve problems he encountered working on Synthetix.

He explained that his team spent years building a market platform on the chain, but the reception was lacklustre, forcing him to rethink his approach.

I sort of looked around and I was like, “This doesn’t make sense, that we’ve built something that’s so useful and yet it’s not actually being used.”

There wasn’t a mass exodus from Centralised Finance (CeFi) to DeFi, right? And so, that really forced me to think about how we could take these protocols that we’ve built and make them accessible to people who were living on centralised exchanges and felt comfortable there.

Kain Warwick, founder of platforms Synthetix and Infinex

The user base needs to be placed front and centre when a new technological product is created, regardless of the category the product falls under. Stani Kulechov, founder of Aave Labs, emphasised on the panel that developers can better attract users and monetise their products by doing so.

He also added that DeFi players must strike the right balance between creating greater user accessibility and offering innovative features.

3. Tap into developing markets

With many crypto firms finding it difficult to attract and retain active users on their platform or service, the key is to find the correct user market.

Ben Zhou, co-founder and CEO of Bybit, shared in a separate panel discussion that his company saw a larger onboarding in countries including Africa and India, where their financial systems are immature compared to their global counterparts, making it easier to get users to get assimilated onto their platforms.

“We can see that crypto is really empowering these guys and, in a way, replacing or establishing their position as a financial type of role. So I think this is something really interesting,” said Zhou last week.

Vivien Lin, the CPO of BingX, also saw a similar trend in their user demographics. She added that aside from having a developing financial infrastructure, it’s also apparent in countries with depreciating currencies and those looking to convert their fiat currencies to cryptocurrency.

However, Lin cautioned that crypto firms should dive headfirst into a new market without meeting the compliance requirements specific to a particular country. Gracy Chen, CEO of Bitget, agreed with Lin when she highlighted the importance of localising their product offerings.

She explained with an example that Asian users prefer memecoins, SocioFi, and GameFi, but this is not usually the case for European audiences. With Bitget’s 45 million users pooling from more than 100 countries, the company needs to customise their services and products in each market.

What’s next?

Across all three panels, all experts remained bullish on the sector, with more activity and innovations to generate higher levels of attention in 2025.

In particular, Allaire expressed his optimism in the industry and compared the development of the industry from when he first entered 11 years ago until today.

[I’m] incredibly optimistic. We’re seeing the most technological progress that we’ve seen, the most legal progress that we’ve seen-most market infrastructure project progress that we’ve seen in 11 years since I’ve been in this industry. So I believe the next couple of years are going to represent extraordinary growth for this industry.

Jeremy Allaire, co-founder, Chairman and CEO of Circle

President of CoinW, Sonia Shaw, remained bullish on the crypto market following the news of the Fed rate cut.

“I would say yesterday, 18th of September of 2024, should be the official starting day of this bull run. If you think you have made money this year, wait for the bigger one because the whole market economy will change in the next 12 to 24 months,” she proclaimed.

• Find out more about TOKEN2049 here.
• Read other articles we’ve written about cryptocurrencies here.

Featured Image Credit: Vulcan Post