JPMorgan: 2023 will be a year of change in the cryptocurrency industry

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Analysts at the investment bank JPMorgan believe that after the collapse of FTX, the cryptocurrency industry will change significantly. Primarily due to stricter regulation.

In a special report Global Markets Strategythe JPMorgan team writes that more transparent regulation could lead to the convergence of cryptocurrency projects and the system of traditional finance. As an example, the authors cite the bill on regulation of cryptocurrencies in the European Union (MiCA).

JPMorgan analysts expect regulatorswill pay close attention to the issues of storing crypto assets and protecting consumers. These areas should lead to the same level of security as in the traditional financial system. At the same time, researchers also noted the increase in the popularity of hardware wallets after the collapse of FTX.

Another way to protect consumers is tobecome a division of roles for cryptocurrency companies. When, for example, a cryptocurrency broker cannot simultaneously act as a credit service or provide custodial services.

“This will be important for companies like FTX.It combined all these areas, which made it possible to steal client assets, manipulate the market and create a conflict of interests,” JPMorgan analysts write.

It is important to ensure transparency of cryptocurrencybusiness - oblige companies to provide periodic reporting on assets, encumbrances, amounts of funds and reserves, say the authors of the report. These norms can be borrowed from the field of traditional finance.

Researchers do not expect a significant increase in the role of decentralized exchanges due to many limitations for such platforms:

“We believe that centralized exchangeswill continue to play a huge role in the cryptocurrency ecosystem for the foreseeable future. Especially for large institutional investors, even with the collapse of FTX."

Previously Executive Vice PresidentBinance European division Martin Bruncko said that the MiCA bill will significantly simplify the work of cryptocurrency firms in Europe.