KPMG: institutional investment the key to the growth of the crypto market

[Paha87]

KPMG auditors have published a report that highlights the need for institutional investors to participate in the cryptocurrency industry. The report describes the importance of cryptocurrency analysis as an investment alternative and how institutional investors can participate in this process.

"Digital assets have the potential to be institutionalized to scale»

In its report, the Dutch firm said that "there is a new world of Finance in which a transaction in digital assets can become a standard operation" adding:

Cryptocurrencies have potential. But in order to realize this potential, institutionalization is necessary. Institutionalization is a large - scale participation in the crypto market of banks, dealers, brokers, exchanges, payment providers and other organizations in the global financial services ecosystem.

The study came at a time when the use of digital currencies is gaining acceptance worldwide, both as a unit of financial transactions and as a means of preserving value.

Christine Lagarde, managing Director of the International monetary Fund (IMF), said last week that "Central banks around the world should consider issuing a digital currency to secure transactions." Lagarde argued that state-supported digital currencies "can meet public policy objectives related to financial inclusion, consumer protection, privacy protection, and fraud prevention."

Although observers point to the risks of Central banks ' involvement in the crypto-sphere, such as the potential to slow down transactions and increase costs through excessive regulation, KPMG believes that the entry of financial institutions into the sphere plays a crucial role in increasing public confidence in digital assets.

"Institutionalization is a necessary next step for cryptocurrencies and is necessary to build trust, facilitate scaling, increase availability and increase incentives,"the auditors argue, adding that for countries with hyperinflation, such as Argentina, it would be wise to use cryptocurrencies to preserve value." KPMG says:

A globally accessible decentralized value store can have a significant stabilizing effect on a country's economy. Bitcoin could potentially represent such a store of value in the future. It is interesting that despite the large fluctuations in bitcoin prices, it is inherently unstable. The supply is actually fixed and algorithmically protected. Demand fluctuates, but may eventually stabilize as the market Matures.

A truly open global financial system

In the same report, Jeff Horowitz of Coinbase writes that cryptocurrencies are an opportunity to turn the financial industry into a truly open global financial system:

Regulatory agencies are also starting to seriously discuss cryptocurrencies that can facilitate institutional participation, encouraging the market to think about how engagement with these assets fits both into existing rules and regulations and into the new framework that may be required for cryptocurrency.

However, Horowitz noted that "the emphasis on innovation in cryptocurrency should not be at the expense of security, compliance with rules and consumer protection", explaining:

Leaders in the crypto space, including cryptographic companies and industry partners, have a responsibility to help influence and train key legislators and regulators to advance a common governance and enforcement system.

"In many ways, leading crypto companies should strive to meet the standards and best practices set for traditional financial services companies. We believe that this will help increase confidence and accelerate the adoption of cryptocurrency among investors and institutional clients," - said the employee of Coinbase.

Link to the source of information (Russian) - https://altstake.io/news/kpmg-institucionalynyeinvesticii-klyuch-k-rostu-kriptorynka

[cowz]

When institutions jump in they not only provide whale sums of cash but also add a sense of credibility that might entice regular people to join in as well