The key to mainstream Crypto
Bringing Crypto Mainstream
We were joined by Coinbase CEO UK, Zeeshan Feroz at this year’s Pre-unconference in Laax. As the proceedings unfolded, it became apparent that the various innovators we had gathered, share similar challenges to mainstream adoption and acceptance, particularly in heavily regulated industries, such as financial services.
WORLDWEBFORUM: The “Crypto Winter” is signalled by a fall in the demand for high spec mining equipment. What factors will affect how long this winter will last?
Zeeshan Feroz: We went through a very heated hype cycle back in 2017 at the start of 2018. Frankly, a lot of it was just irrational people listening to friends talk about making money and they were diving in. So a correction was inevitable and that’s what happened last year most to 2018.
In the big picture I think a lot of conversations in 2017 and 2018 were around the value of crypto. And now that it’s it’s lost a lot of value, I feel like the narrative is shifting a little to utility.
What the Bitcoin craze did do was raise a lot of money that is being put into long term projects. There’s a lot of people working on those projects and we should start seeing some actual real world utilities emerge.
So I’m excited about the next phase of crypto. And I think when it comes to valuations they’ll find their place based on the utility these coins ultimately get.
WWF: Do you see parallels between the dot com bust and the crypto bubble?
ZF: You can draw parallels if you look at it from certain lenses. But I think this has momentum in a different way. The potential of this really starts from the foundations of our financial system and reimagining what money can be. I actually think see the implications of that being further reaching than the dot com bubble.
WWF: What will need to happen before Crypto becomes really mainstream, which is the goal of Coinbase?
ZF: One of the good things that came out of the whole “buy crypto for investment” is, we ended up with millions of folks who made that first mental leap in buying their first coin. I think that’s that’s probably the hardest step when you’re entering into crypto. So I think the next phase is to drive utility is for projects to emerge where tokens are embedded which are used in spending.
I also think regulation can play a part. Having the right regulatory framework in the crypto space will make the assets more trustworthy, giving them a seal of approval. A regulated security net will certainly help make it more mainstream.
WWF: The appeal of crypto to the people who originally bought it, was that it was unregulated and decentralized. Whereas for it to be adapted to the mainstream, it should be more regulated and organized by a central body?
ZF: I think decentralization has its place and its use cases, but in certain cases you have to have some element of centralization.
When it comes to regulation, I think that is absolutely necessary because without regulation you have an industry where anybody can do whatever they want, and that leaves consumers vulnerable.
For example, there are many who are unable to determine a good business from a bad business. And that’s what regulation does: it creates a hygiene level, or a minimum bar for how business should be operating. You see this in the financial services industry. So I think regulation is absolutely a good thing.
WWF: What role does Coinbase play in actively shaping the regulations that are being formed?
ZF: We are engaged in all the areas and countries we operate in. We are engaged with the regulators to ensure that we keep them up to date in our activities and we help them understand what we do and where regulation and what the right regulation could look like.
It’s an issue for many innovators in all regulated industries. It’s finding out where the lines currently are and then redefining those lines to include the innovative advances you’ve made.
WWF: What sort of people do you need on your team to be able to help you move forward with that?
ZF: It’s quite an interesting place to be. Because there’s no regulation you almost have to self-regulating. You have to create rules that you you feel will ultimately become regulation.
So we’ve taken several steps around that we’ve in the UK we’ve created a couple of we’ve joined a couple of self-regulatory bodies to bring crypto businesses together to create some basic standards.
I think that at an industry level there is desire by like minded businesses to come together and create these standards – almost a code of conduct – and then within our teams the people we have they mostly on the compliance and legal side they both come from traditional financial services heavily regulated industries. So, they’re very good at understanding how lawmakers think and what the rules could be.
And it’s that knowledge and experience that we use to determine where the lines will be in the future, and we try and ensure we’re always on the right side of the line.
WWF: What would you say to people who are a bit nervous about investing in crypto for the first time?
ZF: My personal view on that is, it’s more than an investment product. Look at it as buying shares in a startup, because ultimately you’re buying into a project that has a vision, and has a team. Frankly it’s no different investing in any other startup.
So I would encourage people to educate themselves to learn about the projects and the potential. And then if they’re interested to participate in it, do as much research as you can about the project that you’re investing in.