London Calling: Saga Attends Digital Asset Summit
On February 10, London welcomed its first ever Institutional Crypto conference - the Digital Asset Summit (DAS). Attendees took shelter from the persistent drizzle and grey skies, courtesy of Storm Ciara, in the Rosewood hotel in Holborn, which bustled with representatives from across the institutional investment space (impressively so - considering the storm’s travel disruptions and significant number of cancelled flights).
Throughout the course of the conference, we met with a number of investors, investment funds, payment providers, custodian and other fintechs - all united by an interest in crypto. Of course, conversations spanned the lay of the land at present, as well as what it may take (in the words of the conference organizers, BlocksWorks Group) to bridge the gap between traditional finance and the digital asset ecosystem. Our key takeaways from the event are below.
Investors are testing the waters
We were particularly interested to engage with traditional and institutional investors to gauge their stance on crypto - whether they are actively investing, engaging in early conversations or none at all. What stood out was that, at the moment, engagement with crypto within these organizations seems dependent on size: owing to their size, small investors are more agile and may find it easier to adopt digital asset technology. But while some indicated they were investing in or operating these technologies, few seemed to have fully integrated them into their systems.
Our discussions with larger firms suggested that they are taking an ear-to-the-ground approach: not yet actively investing, but interested in how the technology and its applications are evolving. This approach includes market mapping, and engaging in an ongoing dialogue with regulators and policymakers. Mirroring the broader the industry - and public - dialogue, regulation and compliance were two dominant topics of discussion throughout the conference.
Wait and see on CBDCs
A number of the discussions on-stage and off centered around whether the increasing number of central bank digital currencies (CBDCs) being investigated globally will bear fruit. These discussions identified the question of whether or not central banks will issue a digital version of their respective national currencies’ - along with their motivations behind doing so and how long it will take if they elect to take a CBDC to market - as a key factor in determining the future of the industry. While these questions persist, most players across the institutional space will remain in ‘wait and see’ mode. It is no longer a question of if digital currency will have a role to play in the financial services space of tomorrow; it is a question of who will be issuing them - central banks, or the private sector.
Of course, we at Saga have spent much time considering who will - and can legitimately - issue the digital currencies which will factor into the future of financial services. We believe that any central bank digital currency will come up against the same challenges facing the non-digital version of their money. Namely, that the health of the currency will still be inextricably linked to the ruling government’s political agenda. What’s more, there are broader concerns surrounding the motivations of central banks in issuing digital currency, and the impact this could have on the global stage.
But this does not necessarily mean that the private sector is the natural contender. As we explained in a number of our conversations with attendees, any digital currency issued by a private company risks prioritising shareholder returns over the health and stability of the currency, along with the interests of said currency’s users. This is part of what sets Saga apart. Our Governance Model - ensuring that the will of SGA holders is fairly formulated and effectively fulfilled - continues to be a differentiator and talking point with financial institutions across the board.