BFC Bulletins Monthly News Digest
Trust in cryptocurrency markets has been significantly eroded by numerous events in recent years (e.g. FTX’s bankruptcy in 2022, which wiped out its USD 34 billion valuation overnight). These events have highlighted the fragility of cryptocurrencies as stable investments. The diversity of investors’ motivations (everything from belief in technology to the pursuit of returns) and the prevalence of fraudulent activities further complicates the trust issue.
Experts such as UST’s Daniel Field and IDnow’s Jason Tucker-Feltham emphasize the role of overhyped promises and a lack of regulations in eroding this trust. They suggest the need to rebuild the industry with a focus on legal clarity, institutional adoption and balancing idealism with practical regulations. Measures such as the European Transfer of Funds Regulation (TFR) and strengthened KYC procedures are essential in this regard.
Experts view the future of cryptocurrencies as promising, having the potential to become a mainstream asset class within a decade. However, the immediate focus should be on establishing a regulatory framework that balances innovation with consumer protection and aims to rebuild and sustain trust.
