Will crypto and blockchain shape the future of finance? Experts answer

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The rapid growth of cryptocurrency has inspired both optimism and concern about its long-term impact. Proponents see the underlying blockchain technology as a key step forward in transferring funds more quickly and cheaply, but a popular narrative says that crypto will do little to help the world because it remains too unstable and inaccessible to be useful. Which side is correct? To find out, we’ve collected some of the leading voices on the subject and asked them to share their insights. No birds were harmed in the creation of this blog post.

It’s not a question of if cryptocurrency and blockchain will shape the future, but how. As the future of the financial industry is being built, the crypto community – and those who have the resources to invest in the space – are asking themselves: how will blockchain shape the future of finance?

This is the second part of a multi-part series on blockchain and cryptocurrencies in China. Read the first part about the digital yuan here.

When Satoshi Nakamoto introduced bitcoin (BTC) more than a decade ago, it was hard to imagine the role cryptocurrencies would play in global finance. Some argue that the invention of blockchain technology is similar to the revolution sparked by the invention of the Internet in the 1980s. Although it started out as a niche for tech enthusiasts, in just 12 years bitcoin has become a serious player in the financial world and its market capitalization has approached that of Google, one of the world’s largest tech giants.

Related: Has bitcoin proven to be a reliable store of value in 2020? The experts’ response

One of the reasons for the growing popularity of and interest in cryptocurrencies is that the technology behind them promises greater financial accessibility compared to traditional finance. This is especially important for developing countries and emerging markets with rapidly growing economic potential – regions with the greatest potential for mass adoption of cryptocurrencies. And while blockchain cannot solve all of society’s problems, the community behind the industry must address the factors that cause financial exclusion. Because the cryptocurrency industry is inherently decentralized and community-driven, it values diversity and inclusion, including valuing the contributions of women and the LBGTQ+ community.

Related: Women, decentralization and economic dynamics in the world : The experts’ response

Public opinion on cryptocurrencies is still suffering from the infamous Silk Road saga and the ICO craze of 2017 – 80% of Initial Coin Offerings turned out to be scams. Meanwhile, cryptocurrencies are appealing to the younger generations, who will soon be the main drivers of the global economy, and are certainly gaining ground. Just last year, PayPal, the world’s largest payment processor, announced that it would allow its customers to buy, sell and hold cryptocurrencies, and demand for the service has been greater than the company expected.

Related: Will the integration of crypto currency into PayPal bring crypto currency to the masses? The experts’ response

Over the past year, the world has also witnessed the rise of the decentralized financial industry, and some have even claimed that DeFi will finish what bitcoin started and prove to be the guarantor of a better and more liberated future. DeFi has become a symptom of a real transition from centralized to decentralized services, which has led to the massive innovation and growth of Web 3.0 protocols and the demand for a decentralized Internet. As the old financial system rotted away and degraded, in the midst of the COVID-19 pandemic, we saw an unprecedented amount of money being spent by governments around the world. DeFi offers the prospect of a paradigm shift, promising not only the democratization of money, but also the democratization of finance, signifying a seismic shift in the way people will bank in the future.

Related: How has the COVID-19 pandemic affected the crypto-currency space? The experts’ response

Due to its decentralized nature, the crypto industry is not a local trend and never will be – the changes it is causing in the financial landscape are global. With central bank digital currencies (CBDCs) being explored by governments around the world and more institutional players – like MicroStrategy, Mastercard, Bank of New York Mellon, Tesla and many others – entering this space, it seems inevitable that the global economy will recognize that cryptocurrencies and the technology behind them are here and now. These examples also clearly show that the sector is maturing.

Related: Tesla, Bitcoin, and the crypto-currency space: Is the Musk show on? The experts’ response

Moreover, not all countries treat cryptocurrencies in the same way: India has had an uneasy relationship with the crypto space for some time; China is at the forefront of developing CBDCs; the European Commission has proposed its regulation on crypto asset markets, which has raised concerns in the crypto industry; and in the US, as the crypto space hopes for new appointments in President Joe Biden’s administration, regulators are tightening their belts for cryptocurrency users. Cointelegraph decided to reach out to blockchain and cryptocurrency experts in China to get their opinions on the following question: What role will new technologies – such as blockchain, cryptocurrencies and DeFi – play in shaping the future of finance and in China in particular?

Bobby Lee, founder and executive director of the Ballet

I think blockchain and cryptocurrencies have changed the financial world and basically created a whole new asset class. Traditionally, there was only gold and silver in the world. Then paper money was invented and became the currency, and it was a new asset class. And a few hundred years later, stocks were invented. Company shares have become a concept of ownership in a company, so that shares have become an asset class. And of course we had loans and bonds. So whether it’s government bonds or corporate bonds, it’s a different asset class.

And what we’ve seen for 12 years now with cryptocurrencies is we have bitcoin and now a new asset class called digital currency. Nowadays it is called digital currency, but it is not actually allowed to be used as a currency. It should simply be treated as a new asset class. But why do we need this new asset class?

The problem with paper money is that those in power always want to change the rules to increase their power over the economy and therefore over the people. They therefore introduce the concept of unlimited printing. And this was only introduced in 1971. We are now in our 50th year. year of this new asset class, which has a new feature: unlimited printing. Until 50 years ago, the US dollar could not be printed indefinitely because it was backed by gold. So you couldn’t print indefinitely, but now you can print a little bit because you’re out of gold. The currency has changed.

And now, with this change, the global engine has introduced a new asset class called Bitcoin, designed to counterbalance the changes in fiat currency – to give people and the world a choice. Do you want to continue using an asset class that continues to print rampantly? Or do you prefer to invest your savings in value in an asset class with a strict limit of 21 million units? This is what cryptocurrencies bring to the world.

The important topics are as follows: Who will win? Who’s right? Who’s wrong? I think cryptocurrencies will benefit because of their limited issuance, which is strictly limited. You can read my thoughts on bitcoin as an asset class in my book The Bitcoin Promise: The future of money and how it can work for you. Cryptocurrencies open the world to the concept of a new asset class. And it also brings balance back to the world, because before bitcoin, the most relevant form of money was government-issued money, what we call fiat money, and crypto currencies have changed its nature.

Chang Jia, founder of Bytom and 8btc:

First, the digital yuan mentioned in the first article, which combines advanced blockchain technology and cryptotechnology, has begun to be implemented in several Tier 1 cities in China. It can be said that the DCEP already serves the national economy and the livelihood of the population. The prototype of China’s future financial network is beginning to take shape. This makes China the world leader in digital finance.

For the world, blockchain technology has an important task to perform in the future, including facilitating the internationalization of currency, the globalization of trade, and improving the structure of the world’s leading financial system to prevent a repeat of the financial crisis.

We are now seeing blockchain-based bitcoin become the hedge asset of choice in traditional financial circles, reaching a market value of $1 trillion in a short ten years.

In a long process of financial evolution, bitcoin and other high-value cryptocurrencies will bring the world a new logical transition and wealth portfolio of the nature of money and finance.

Da Hongfei, founder of Neo, founder and CEO of Onchain

The current DeFi boom has proven that blockchain technology is not far behind. From my perspective, dissatisfaction with traditional financial institutions is growing, while DeFi is booming because it offers unprecedented returns, efficiency and transparency to people – ordinary people with varying levels of experience with blockchain.

I believe blockchain technology will play a key role in creating the smart economy of the future in China and the rest of the world, as more and more people – and institutions – invest in it.

In the future, I think agile governance is the key to blockchain’s sustainability. It gives platforms and communities the flexibility to adapt quickly and flexibly to the market needs of the digital economy and the regulations of different countries.

Daniel Lv, co-founder of Nervos

China has its own vision for the use of this technology: It wants to use Blockchain to improve data sharing, streamline business processes, reduce transaction costs and create better credit systems to solve common problems in SME finance – bank risk control, regulatory oversight, etc.

Globally, cryptocurrencies and DeFi will make financial services more equitable, especially for people – like. B. Non-bank customers – who are abandoned by traditional financial institutions. We will also see blockchain technology continue to evolve and eventually become as ubiquitous as the internet – to be used across all sectors for a variety of purposes.

Discfish, co-founder of F2Pool and Cobo :

Lately, everyone has been paying attention to the movement of retail investors against Wall Street financial institutions on the subreddit r/wallstreetbets. As a representative of securities platforms, Robin Hood can restrict trading and even force users to sell. This is another reminder of the importance of decentralised funding. In less developed and developing regions, there are increasing numbers of people who need decentralized funding.

Last year, with the rapid development of new blockchain technology – represented by DeFi – financial decentralization became more than a dream. It can provide financial services to people in less developed regions and enable people around the world to benefit from more transparent and equitable financial products and services. People can choose financial service providers based on their demand for financial products and take full advantage of the diversity of a truly decentralized and rich financial ecology.

The impact of blockchain technology on the traditional financial sector will be greater than the impact of current financial technology on the banking sector. It will also require reform of the entire financial sector and is expected to redistribute the structure of the sector.

Kevin Chou, co-founder and CEO of Rallye

Cryptocurrencies are beginning to replace outdated aspects of traditional finance, but they are also bringing entirely new functionality to the industry. We are already seeing cryptocurrencies replace outdated elements of the traditional financial system, from crypto currency transfers between the US and Mexico that dramatically reduce costs to Ethereum-based credit protocols that do not require a counterparty.

But in addition, with the advent of cryptocurrencies and blockchain, we are seeing entirely new financial instruments emerge that did not exist before. Social tokens, which allow influencers to monetize their brand and engage their communities, are one example. Improving the economic relationship between creators and fans could be the key to enabling millions of creators around the world to earn an income that allows them to support their families.

All these developments are particularly important in regions such as China and Greater Asia. If cryptocurrencies can overcome the regulatory restrictions in these regions, it could change the lives of millions.

Kevin Shao, co-founder of Bitrise Capital

Blockchain is a technological evolution without borders. Every country in the world is experiencing the emergence of new technologies. Both the West and China must actively adopt new technologies and apply them in our society.

Blockchain has played an innovative role in a number of areas, including. B. in public administration, social credit research, product monitoring and information notarization. We believe that the West and China are very important in these areas.

At the same time, we are investigating the development of blockchain in the financial sector. Of course, the financial sector has a higher status in the system than other sectors. Therefore, whether in the West or in China, the application of blockchain in the financial sector should be done as cautiously as possible.

Yat Siu, Chairman and Co-Founder of Animoca Brands

DeFi will shape finance in incredibly fundamental ways. Financial education is perhaps the most important way (even in China). By this I mean a general knowledge and understanding of finance, traditionally reserved for the economic elite.

Like many others in the decentralized movement, we are building a future where our children will be financially literate, with their own investment portfolios and a solid foundation of financial literacy by the time they go to college. These children may even be able to pay for their own education with the knowledge they gain from participating in a decentralized ecosystem.

Imagine a world where financial inclusion doesn’t just mean having a bank account, but being able to easily and efficiently participate in various financial transactions, benefit from things like interest rates, agricultural profitability or exchange rates, or simply invest in a project you like.

Financial literacy is one of the few things that has not improved with the evolution of Web 1.0 and 2.0. The advent of blockchain is changing the game.

Several interviewees were included in Cointelegraph China’s list of the 100 most notable people in blockchain in 2020. Cointelegraph’s editorial team in China participated in four interviews.

These quotes have been edited and shortened.

The views, thoughts and opinions expressed in this document are those of the authors and do not necessarily reflect the views and opinions of Cointelegraph.

This article contains no investment advice or recommendations. Any investment or business transaction involves risk, and readers should do their own research before making a decision.

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