Regulation
EXCLUSIVE: ALTA CVO Talks ‘Optimism’ Over Tokenization and Crypto Regulatory Sentiment at 2024 Consensus
KEY POINTS
- Sentiment towards tokenization was generally optimistic among Consensus 2024 participants: ALTA CVO Yaroslav Ivanov
- ARK Invest remains cautious but has demonstrated commitment to exploring blockchain technology: Ivanov
- Addressing the challenges effectively can help tokenized funds transition smoothly into the financial system, he said
- Ivanov said cryptocurrency regulation is a central topic among prominent participants, including the CEO of Ripple
CoinDesk’s Consensus 2024 event in Austin, Texas brought together the most prominent figures and key players in the cryptocurrency industry today, and among the key topics discussed among attendees were tokenization and Bitcoin.
Yaroslav Ivanov, Chief Visionary Officer of the blockchain laboratory HIGHshared with International Business Times discussions he had with Cathie Wood, CEO of investment management firm ARK Invest, and Brad Garlinghouse, CEO of cryptocurrency custody and cross-border payments giant Ripple.
Tokenization, the process by which something of value is converted into a digital token that can be applied on the blockchain, gained the most attention during the event, Ivanov revealed.
“Based on my presence at Consensus 2024“, the general sentiment among major players regarding the cryptocurrency market, particularly tokenization, is particularly optimistic and forward-looking,” he said. He added that the “current phase” of tokenization stands out as it is focused on core infrastructure and also reflects the maturity of decentralized finance (DeFi) as opposed to traditional finance.
He further revealed that there is a clear increase in “institutional involvement” in tokenization. “The discussions highlighted a growing interest among institutional investors in integrating tokenized assets into their investment strategies.”
ALTA’s Yaroslav Ivanov spoke with Cathie Wood, CEO of ARK Invest, at Consensus 2024. ALTA – Blockchain Labs
Ivanov noted that ARK Invest’s approach to tokenization was more “cautious” than that of BlackRock, the world’s largest asset manager. ARK Invest focuses on investor safety and reputational risk management, “particularly in anticipation of regulatory changes impacted by the upcoming US election.”
On the other hand, the company is actively exploring blockchain technologies which, according to Ivanov, “reflects their commitment to leveraging blockchain technology for future growth and innovation.” The exploration includes ARK’s collaboration with 21Shares to launch the ARKB Bitcoin spot exchange-traded fund (ETF).
When asked what challenges he thinks the tokenized funds subsector will face in terms of broader adoption, Ivanov sees early adopters initially struggling with regulatory compliance, cybersecurity threats and educational barriers. He acknowledged that the sector is vulnerable to problems that could impact investor confidence. On the other hand, he argued that effectively addressing the challenges associated with tokenization is crucial to ensuring that tokenized assets and funds can seamlessly enter the financial ecosystem.
While discussing the challenges faced by tokenization, Ivanov said that “optimism about the future of tokenization prevailed among the participants.” “The consensus was that continued collaboration between industry stakeholders, regulators and technology providers can address current obstacles and unlock new growth opportunities for the tokenized asset space.”
Ivanov believes that tokenized funds and assets have the potential to become a “core” subsector in the digital asset industry. He said that Tether’s initiatives are active public tokenization indicates that there is a broader trend to introduce blockchain solutions in various industries. This trend not only promises a transformation in wealth management and business practices, but also lays the foundation for a “more inclusive and transparent financial ecosystem” powered by blockchain technology.
Regulatory clarity also became a central theme of the event, he said. “Participants highlighted the importance of clear and consistent regulations to stimulate innovation while safeguarding the interests of investors. Such clarity is considered critical to broaden the adoption and general acceptance of tokenized assets,” she revealed.
The call for regulatory clarity has been a movement in the broader digital assets sector in recent years. Among the leaders of the lawsuit is cryptocurrency exchange giant Coinbase, which has pressured the US Securities and Exchange Commission (SEC) to implement new regulation dedicated to the rapidly growing sector.
ALTA’s Yaroslav Ivanov also spoke with Ripple CEO Brad Garlinghouse at Consensus 2024. ALTA – Blockchain Labs
Ivanov spoke with Garlinghouse about regulation. “Being at the forefront is always difficult, as demonstrated by the experience of Ripple, which was the first to defend its position in the face of numerous attacks from uncertain regulators,” he underlined.
The two crypto leaders concluded that unity is needed under the Fairshake Crypto Super PAC (political action committee) initiative. Interestingly, Coinbase also urged support for that cause, stating that the entire cryptocurrency industry can gain regulatory clarity by voting for pro-crypto candidates who can raise the flag for digital asset policies.