The CEO of the UK Financial Conduct Authority (FCA) has highlighted the evolution of cryptocurrencies from “rebellious instruments” to a mainstream asset class.
Ten years ago, digital currencies were viewed as an investment tool for gaining independence from the state, but today, they have gained widespread popularity worldwide.
As the interest in alternative investments grows, regulatory bodies should develop standards for regulating the cryptocurrency industry.
The FCA Executive Director stresses that few users understand the risks involved in cryptocurrencies, and regulation can avoid unfortunate incidents such as the collapse of the FTX crypto exchange.
As the crypto industry matures, industry players should also change their approaches to work, given the risk that organized crime can use crypto assets.
While acknowledging the benefits of blockchain technology, including faster and cheaper international transactions, the FCA tirelessly warns investors of the risks associated with digital assets.
In March, the regulator published a discussion paper on ways to improve asset management, noting that tokenization could reduce costs, increase transaction speed, and eliminate potential errors.