Local media reports that the U.S. crypto industry will have its own path that would differ from the global one owing to its specific regulatory setting and the consumers’ requirements, as per BitMEX Group CEO Stephan Lutz. Citing this, Lutz, speaking at the Token2049 conference in Singapore, said, “I think that the U.S. crypto businesses will pivot in one direction that is consolidating TradFi with crypto.” This change is expected to transition the Digest of the U.S. crypto market into a new form of TradFi 2.0.
U.S. Crypto Market: A Digital Twin of TradFi
Lutz pointed out that large American based crypto companies such as Coinbase, Circle, and Kraken are inclining towards the adoption of financial services. This consolidation, he said, is due to the regulatory factors and nature of the market required in the United States. “If you see Coinbase, if you see Circle, if you see Kraken, they are kind of transitioning more and more into a being a copy of the TradFi system,” Lutz said in his interview with CoinDesk.
The bifurcation Lutz pointed out in the U.S. market means that future U.S. crypto businesses will largely tend to target their customers from within the country. Thus, Mark Twain, once again, comes to life by vividly painting the picture which entrepreneurs from other countries do not want to enter due to strict regulations. Even BitMEX itself stopped its operation in the U.S. in the same year after it pleaded guilty for violating the Bank Secrecy Act and for failing to implement proper know-your-customer (KYC) and anti-money laundering (AML) measures that should have been enshrined between May 2015 and June 2020.
Nevertheless, according to Lutz, the U.S. crypto industry remains quite promising if it learns how to deal with regulations. However he does not rule out the idea that a full-fledged law regulating the industry might be approved in the U.S. Senate before the presidential election expected in November.
Asian Markets Lead the Way
Asian markets other than the U.S., especially India, have most of the potential to lead the crypto market, as observed. Lutz highlighted that, unlike FI markets of other regions, Asia has both a large unbanked population and wealthy investors thus forming a rather specific environment for crypto-related businesses.
‘Market institutions in Asia will capitalise on America’s confusion,’ Lutz said, meaning that while America is in confusion on regulatory atop its markets, it will advance and become more innovative. He highlighted that a plethora of the usage standards within Asia, including cross-border money transfers and financial solutions that are fringe, are viable use cases for cryptocurrencies rather than the financial trading that is seen more commonly.
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Among all its locations, BitMEX is more focused on Asia and thus is suitable for capturing all these opportunities. Lutz, who has vast working experience with PwC and Deutsche Boerse, stated that Asia remains an appropriate environment for the expansion of cryptocurrencies.
India: A Key Player in the Future of Crypto
Lutz also found out that India will also assume the role of yet a key factor in regulating the cryptocurrency market over the next 10 years. In India, a large part of the population still does not have easy access to banking services. Hence, it has potential for crypto development. “Outside the U.S., India will drive the crypto industry in the next ten years, barring the companies are not too closed and if policymakers come to understand that crypto in fact enhances their capacity to maintain a monetary policy independence,” Lutz noted.
This outlook is important as India does not have a straightforward position on cryptocurrencies, to say the least. On the other hand, the country has thought about utilizing minimum regulatory measures; there is also raising awareness of the application of blockchain technology in fields such as finance, healthcare and governance, among others.
Conclusion: A Divided Global Crypto Landscape
The comparison of the U.S. Crypto situation to the rest of the world shows the currents and trends affecting the global crypto market. As the market trend in America shifts towards regulated Wall Street traditional finance, it is perhaps time for Asian nations, especially India, to take the mantle as the first movers in the blockchain and cryptocurrency revolution.
Lutz’s observation aligns with another trend: that regulatory conditions specific to a region define the nature of the crypto market there. As such, investors and companies interested in achieving sustainable growth will need to get a better grasp of these regional characteristics. Keep following TheBITJournal and keep an eye on the U.S. crypto market.
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