Virtual assets have come a long way since its inception as they have become an important aspect of mainstream capital transfer. Once considered a niche category, cryptocurrencies like Bitcoin and Ethereum have broken the glass ceiling of what it means to be a tradeable form of currency.
This mainstream penetration was also spotted by DBS, the popular worldwide banking firm which said that the world of crypto was intriguing and of landmark importance. In a paper titled, “Digital Currencies: Public and Private, Present and Future, the bank talked about how 2020 was being shaped to become a major marker for virtual assets.
According to the Singaporean Bank, Asia held the title of the largest digital asset market with the aim of rapidly expanding it. Countries like China have made it a point to set up their own cryptocurrency central bank, which is set to be launched in the coming quarters. If we measure the cryptocurrency market in terms of liquidity and trading volume, we can see that half of the top ten exchanges in the world are located in Asia.
When cryptocurrencies first came to the forefront, regulatory authorities ran helter-skelter to ensure safety protocols were maintained. The research paper by DBS also touched on how the private sector has dabbled in virtual assets in their own way. Despite the surge in usage, DBS admitted that the usage of cryptocurrencies was far from significant. The report said:
” In a 2018 survey by the BIS, no central banks reported significant use of cryptocurrencies for
payments, with 58% of domestic and 40% of cross-border payments not using cryptocurrencies, and 28% of domestic and 32% of cross-border payments being concentrated in niche groups. Most central banks also anticipate that usage of cryptocurrencies will remain minimal due to low retail acceptance, bans, compliance issues, and public understanding of the risks involved.”
The report clearly mentioned that the work being down in the digital asset world would lay the foundation for the developments in the coming years. Over the past couple of years, the custodian market for cryptocurrencies has also increased greatly. Mainstream financial giants such as Fidelity Digital Assets have also set up their own crypto custody services for a diverse market. The potential for cryptocurrencies has also been recognized by banking behemoths like the Bank of England, which has been exploring digital assets for a long time.