At the recent CoinMarketCap conference, former Commissioner of the U.S. Securities and Exchange Commission, Paul Atkins, and visiting research fellow at the Center for Digital Financial Assets, Robert Greene, spoke to The Capital about crypto-financial instruments like Bitcoin ETFs, ICOs, and stablecoins.
On the significance of Bitcoin ETFs, Atkins stated that the reason for its demand is its potential to broaden Bitcoin accessibility, and that it would be something that is listed and treated traditionally.
“The idea with ETFs is to basically start to have more of it [crypto] be a listed security that institutions and retail people could buy, so it’s not just people putting their money into whatever they think they’re putting their money into, but there’s an intermediary type of step between the raw Bitcoin.”
He also spoke about how institutions are looking to hold crypto-assets, but aren’t able to do so due to the laws surrounding them. Thus, if a Bitcoin ETF did come out, it would “goose the entire marketplace and help stabilize the futures product.”
Atkins also claimed that there is a fear that the Bitcoin world is relatively unstable, volatile, and risky for retail investors.
“You don’t have any centralized trading platform for crypto assets out of design, and that’s great. But at the same time, it’s hard to find pools of liquidity, which helps them to create the volatility of the price, and that then in turn makes people very skeptical.”
The former SEC Commissioner added that the ICO boom ended because of issues in the United States. However, there is still demand for capital and traditional securities offerings which are, by design, costly and time-consuming. Additionally, he stated that the whole engine of capital markets should go forward, and innovations shouldn’t be discouraged due to fear of people “taking it the wrong way.”
“There’s anonymity in the whole blockchain and crypto asset [sphere] anyway, so I think that made that an anathema for people to go into it.”
Robert Green also pitched in here, comparing the structural and functional differences between systems in the United States and elsewhere, adding that exchanges being involved in initial token distribution highlights how these differences between platforms will persist. He said,
“Fundamentally, we’re talking about trading platforms that are all decently centralized, but they’re just structured and operated in very firmly different ways. Some have fiat off-ramps, some don’t, and that to me [is] one of the biggest divides in the marketplace today, and it affects the discussion about ETFs.”
Greene also spoke of how there is strong opposition towards Libra by many. However, there is, for the most part, a relatively moderate to positive reaction to the idea of CBDCs in the EU, he added. He also spoke about Sweden’s plans to develop an e-krona to enable retail accounts at the central bank or tokenized versions of central bank liabilities that investors could exchange.
“For an advanced economy to do that would be a fundamental shift in the way we think about not just the market structure related to digital tokens, but monetary policy more broadly.”