- 2023's outlook on crypto
- Can stricter regulation help prevent collapses and bankruptcies?
- The outcome of the FTX crisis
Robert Quartly-Janeiro has experience in investment banking, investment management, strategic advisory & communications. He has worked on different asset classes, investment styles, geographies, and strategic & reputational challenges. BanklessTimes.com sat down with Robert to discuss crypto in 2023, challenges for ICOs, the infamous FTX crisis and crypto scams.
Do you think 2023 will be a positive year for crypto?
It depends. With everything that happened in the crypto industry in 2022, the space will learn from the mistakes made this year and work towards improving as an industry.
While these mistakes have set us back, it’s essential to view them as a learning opportunity. The crypto industry is at a very nascent stage and has the potential to grow much more with all the brilliant and exciting ideas coming out of it.
Top-down estimates of electric power consumption of crypto mining in the US alone are that the industry was responsible for 27.4 million tons of carbon dioxide (CO2) between mid-2021 and 2022. What are some ways to minimize the industry’s carbon footprint?
With the accelerated pace of development within the crypto industry, many projects have moved from proof-of-work to proof-of-stake and other consensus mechanisms since the early days of Bitcoin. While Bitcoin mining still accounts for a large amount of carbon dioxide production, many projects are working towards a more environmentally -friendly crypto ecosystem.
We can help minimize the industry’s carbon footprint by supporting alternative consensus mechanisms for crypto transactions and projects that use them.
At the operational level, the industry needs to become better at utilizing renewable energy — and less energy overall — water-cooled servers, and carbon-neutral data centers, as well as play a positive role in protecting and enhancing the environment.
Do you think stricter regulation can prevent major bankruptcies and collapses in the crypto industry?
Reputationally, regulating the custody of investors’ assets would make the most sense. Still, what regulators are looking for is not regulatory equivalence. Even then, if regulators “guaranteed” the protection of investors’ accounts – like some countries do in retail banking – that only really works if you’re holding fiat for a specific currency and location. For example, if you’re an American exchange with a UK investor who buys crypto using Euros, who should be responsible for the custody risk, and to what crypto or fiat amount?
More broadly, I think exchanges should take a very conservative approach to lending and leverage if they decide to do so – but that is heavily influenced by the cryptocurrencies being traded. I think industry-agreed best practices and collective standards would be more effective.
What market challenges are there for ICOs?
I believe there are great opportunities for ICOs, particularly stable coins backed by innovative currency and commodities pegs. Beyond that, the challenge for ICOs is to demonstrate what differentiates them from what is already on the market – such as their technology, management team, assets they’re backed by, anticipated trading volumes, integration with the digital economy, etc. For example, if Amazon Inc. were to mine its own cryptocurrency or if the UAE released its oil-backed stable coin, there would be a tremendous demand for both.
In all cases, the challenges are solid communication, marketing, technology, strategy, market timing, and value proposition.
What do you think the outcome of the FTX crisis might be?
We hope it’s a moment when the industry develops, diversifies, and improves – trust and transparency are part of that effort. In terms of FTX specifically, what was going on was crazy if what’s been said in Bloomberg, FT, and WSJ is true.
The most common crypto scams in 2022 were romance scams, fake exchange scams, and social engineering scams. What are the most dangerous scams and some things to watch for in 2023 and beyond?
What concerns us most are fake exchange scams, as in this case it’s not always evident that it is a scam. We want to protect users from fraudsters proclaiming to be Bitrue and imitating us. Part of that is IP protection, communicating when we spot something is wrong, and being very clear with which platforms are ours and which aren’t. As an industry, we must come together to stamp out the scam platforms through some form of ‘Verified by’ approach.
