Blockchain technologies are progressing faster than expected, according to a new survey by Linedata, in association with waterstechnology, a market technology information provider.
Linedata canvassed firms from the three regions where crypto is most developed. Almost half or 46% of respondents were based in North America with a “fairly even” split between Asia-Pacific and Europe.
The survey found that 51% are taking active steps towards providing crypto assets, while 7% are already offering products in this space.
As for operational preparedness for crypto-asset investing, seven out of 10 firms are actively responding to the challenge to support crypto-asset investing, while 21% are “fully prepared” and “ahead of the curve”, as crypto-asset investing is a priority for the business.
In addition, 53% are actively reviewing or participating in initiatives using these technologies to change their operational businesses while 16% are actively testing or using these technologies as part of their operations.
The survey also found that a lack of standardisation in settlement is still a challenge in the remit of digital assets.
“Since every custodian and exchange is different, one of the questions facing the industry is how to build best practices for settlement in digital assets. With the continued scams and hacks targeted at crypto markets, other custody issues must also be addressed,” the report said.
It added, “As well as launching their own digital asset platforms, custodian and speciality banks have now launched initiatives to educate asset managers on how to safekeep digital assets.”
Gary Brackenridge, global head of asset management at Linedata, said, “The main question for asset managers will be how to select providers and how many they need.”
Looking at compliance, the report noted, “The world is now at a legal and regulatory tipping point, and lawmakers and regulators worldwide are scrambling to identify and address the many risks, and come up with ways to regulate crypto.
Their challenge is to find a balance between supporting the crypto market and preventing crime and financial instability,”
Linedata also alluded to the current sanctions on Russia following the invasion of Ukraine in February 2022, which it said has “heightened the pressure on crypto exchanges and trading firms to align with the global financial system and the need for more regulation.”
However, it acknowledged that “this may be at odds with the underlying philosophy of DeFi, and experts warn that the West could be left behind in this global market.”
The data firm said, “The concern is that traditional asset managers — predominantly in the US and UK — could lose to crypto natives and new financial hubs if lawmakers do not find a balance. Currently, US regulators are fighting over who has jurisdiction over this market.”
©Markets Media Europe 2022
