The value of deeper institutional participation in the crypto industry goes beyond just liquidity. One significant benefit is the regulatory certainty that it brings. As institutions increasingly enter the space, they are forcing regulators to provide clear answers on taxation and compliance issues. This clarity is crucial for businesses, whose public accounts must be scrutinized and require permission to list cryptocurrencies on their balance sheets. The involvement of large institutions also legitimizes digital assets and makes them less exotic to regulators, countering claims of money laundering and wash trading.
Institutional adoption is evident in various aspects of the industry. Governments and businesses are exploring blockchain-based initiatives, while banks worldwide are introducing crypto custody and trading services for clients. Europe’s first spot Bitcoin ETF, listed in Amsterdam, showcases the eventual success of institutional willpower. While regulators and institutional players are still catching up with the industry’s early pioneers, an open and collaborative dialogue between regulators, institutions, and early adopters brings unique insights and can lead to positive outcomes. Ultimately, bigger players in the industry result in better rules and outcomes for all participants.
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