The collapse of FTX hurt the development of trust between Wall Street, fintech and cryptocurrencies throughout the 2022 as investors were hit with shockwaves that hit Wall Street and those interested in entering the market.
Adam Levine, Vice President of Corporate Strategy at Fireblocks said Wall Street is still committed to entering the criptocurrency industry.
Yes, Levine said at Benzinga's Global Fintech Deal Day on Thursday. Wall Street and financial institutions are interested in what cryptocurrencies have to offer, seeing the future of financial services being digitized and tokenized - that is where we are seeing a lot of activity right now. EXCLUSIVE: FTX Collapse Brings Cryptoregulation To The Forefront - Here's What 4 Experts Say The Rules Should Look Like
In the year 2021, hedge funds and international clients traded $1.14 trillion worth of criptocurrency through Coinbase Global Inc. COIN, increased from $120 billion in 2020 to more than twice the $355 billion retail investors traded.
These institutions have spent months, and in many cases over a year, looking at what the right strategy is to enter the space Levine said. We've seen the noise over the last few months, but that doesn't hinder their commitment. John Avery, strategy and product lead at FIS Global, said fintech is most excited about the use cases for the sector, three of them being in the year 2023.
Avery said that the first is connecting traditional finance systems, processes and operations into digital assets. Avery said of the second use case, the tokenization of real-world assets. Web 3 rails for traditional assets are a new form of technology and infrastructure to process and power those assets. Avery noted that the demand for stable coin and other forms of value transfer use cases in business-to-business processing scenarios is also seeing demand for stable coin for the third use case. These could be for domestic payments, cross-border payments and corporate treasury. Levine said that there would be a proliferation of stable coin on a global scale.
If you look at some markets, Brazil's central bank has been very active in the CBDC space as a leader, Levine said, but I think we'll see a lot more there. Avery hopes to see more collaborations between companies in 2023 to bring the criptocurrency infrastructure to life.
It takes more than bilateral partnerships to make Web 3 use cases at scale. He said that it requires industries coming together with all of the actors in a specific end-to-end transaction flow.