By Kirill Gourov, CSqua.red
With over 30 people representing businesses across several countries, the Wall Street Blockchain Alliance (WSBA) hosted their inaugural roundtable for the Blockchain Assets Working Group at the offices of ARK Investment Management. Participants included senior executives representing the full value chain of blockchain assets, including bankers, consultants, exchange operators, asset managers, lawyers, and developers, leading to a lively and diverse discussion spanning every stakeholder viewpoint.
Given its historical dominance in the blockchain asset narrative, the conversation naturally began by discussing the underlying drivers of bitcoin’s recent price action. Though the daily transactional volume of bitcoin is now north of US$250 million, representing greater than 50% growth over the 2016 average, some had skepticism that the rise of bitcoin’s price has resulted from fundamental use as a means of exchange. Many referenced the use of bitcoin as a disaster hedge in the face of an uncertain global environment, while others speculated upon a potential approval for one of the Bitcoin ETFs currently under review by regulatory authorities.
Moving onto a discussion of emerging markets, stark differences of opinion around bitcoin’s utility emerged between domestic and international use. While some may not see much use of bitcoin in the US, one prominent community member remarked that “some millennials in Venezuela would not have jobs if they couldn’t get paid in bitcoin.” Participants from Argentina and Colombia echoed this sentiment, and remarked upon how employees in Latin America use bitcoin as a store of value over their local currencies.
There has also been a large increase in interest from corporates in using bitcoin as a payment rail. One member noted significant cross-border payment activity between Latin America and China. The ability for a payment to settle in an hour using bitcoin, as opposed to days or weeks with traditional international payment channels, makes bitcoin a valuable tool to some corporates. “It takes three weeks to send money through traditional channels. It’s a no brainer to use bitcoin if you look at the cost of capital.” Various participants noted that Business to Business (B2B) payments may be where bitcoin will experience its largest growth in the coming years, as opposed to a historical narrative that focused on Consumer to Consumer (C2C).
The limelight then shifted towards Ethereum, especially given the recently announced launch of the Ethereum Enterprise Alliance, designed to focus on enterprise usage and including global firms such as Microsoft, Santander, JPMorgan, and others. Ethereum interoperability was discussed extensively, with developers mentioning that the intent is for Ethereum-based decentralized apps or “DApps” to be portable between public and permissioned environments with minimal re-configuration required. Part of the purpose of the Ethereum Enterprise Alliance is to keep public and private code bases close enough together to ensure interoperability between the two. Ethereum’s valuation was a less clear discussion, with members noting that not much work has been done in the space. Stay tuned for future roundtables on the valuation front.
Skeptics of Ethereum voiced concerns, raising questions around business cases, and one attorney noting “law in the United states applies to all of its citizens regardless of location... Ethereum’s presale hasn’t been challenged yet, but it still could be if a zealous regulator tries to go after it.” Though there were strong members from a multitude of blockchain asset communities in attendance, including Bitcoin, Ethereum, Augur and more, the conversation remained focused on pursuing the truth and sharing knowledge with participants.
The night concluded with a discussion of the regulatory environment. One common point of agreement was the confusion around the landscape within the United States, with six different agencies vying for jurisdiction with conflicting messages. A notable difference can be seen from other regulators such as the UK’s Financial Conduct Authority (FCA), the Hong Kong Monetary Authority (HKMA) and the Monetary Authority of Singapore (MAS), all of whom have been comparably more proactive with guidance, incubators, and regulatory sandboxes. As a final note, one member mentioned the working group as a potential source of collaboration and organization for a similar sandbox. The evening concluded with an extra hour of networking, with very few leaving until closing time.
Disclaimer: The Wall Street Blockchain Alliance (WSBA) is a 501(c)(6) non-profit trade association. Nothing represented in this document, nor any discussion as part of the above noted event is meant to offer investment advice or guidance with regards to blockchain assets, digital currencies, digital assets or any other asset, commodity or security of any kind. The above noted event and all subsequent relevant material, including this event summary document, are meant for educational and descriptive purposes only. Neither the event, nor anything noted above or subsequent to publication of this document, should be construed as legal or investment advice of any sort, and the WSBA we will not be held liable, whether in contract, tort (including negligence) or otherwise, in respect of any damage, expense or other loss suffered arising out of such information or any reliance placed upon such information.