JP Morgan, one of the largest banks in the US, has not shied away from expressing its belief in the crypto sector despite the fluctuations affecting the market. As highlighted in its latest Global Markets Strategy report, JP Morgan is expecting the crypto industry to undergo significant changes with the onset of 2023. Along with more regulations, JP Morgan believes that the use of self-custodial hardware wallets could help people feel safer about their crypto holdings, thus bringing in more investments.
JP Morgan has predicted that a significant part of global crypto regulation, will be inspired by rules that govern the existing traditional finance (TradeFi) sector, like regular KYC requirements and reserve audits for exchanges, stablecoin issuers, as well as lenders and custodians.
The lender bets that these rules would eventually lead to the convergence of crypto with TradFi.
For now, there are a handful of issues that need to be resolved to safeguard the crypto industry against as many risks as possible.
Risks around hacking of smart contracts and over-collateralisation disadvantage of DeFi over TradeFi have been named among serious punctures in the crypto sector.
JP Morgan, that claims to cater over 135,000 clients in more than 180 nations, was set up in the year 2000. Almost 23 years into business, the lender is now looking to establish itself in the new-age Web3 sphere.
In recent months, JP Morgan has taken several decisions to support the adoption of crypto. The largest bank in the US is expected to launch a crypto wallet service in the near future.
The bank’s predictions coincide with other research reports that also claim that laws around the crypto sector would also snatch BTC away from scammers using to use it as a tool for processing financial exploits.
In a recent report, cybersecurity firm Kaspersky said that the upcoming rules and regulations around crypto transactions all over the world, will make Bitcoin less enticing for criminals to use as a payment gateway.
Nations around the world are coming together to provide the crypto industry with legal oversight. Last month, the European Parliament Committee on Economic and Monetary Affairs (ECON) approved the MiCA legislation, that largely revolves around consumer protection as well as prevention of market manipulation and financial crimes in the crypto sector.
The Organisation for Economic Cooperation and Development, or OECD, is planning to present a taxation framework around the crypto sector to members of the G20 nations in the coming days.
Next month, India will take up the presidency of the G20 group and will continue to preside the international union for the next one year. Among its top priorities, India is looking to work with the other 19 member nations of the G20 in formulating a framework around cryptocurrencies, that would work on an international level.