In a fireside chat at Blockchain Expo Europe, James Morek, Co-Head of Institutional Sales EMEA & APAC at Coinbase, and Nick Philpott, CEO of Zodia Markets, shared their insights on what is needed for institutional crypto adoption.
The conversation delved into critical topics such as regulatory collaboration, the role of decentralised technology, and the impact of blockchain and stablecoins on financial transactions.
Regulatory collaboration and frameworks
The conversation kicked off with a discussion on regulatory collaboration and the delicate balance between fostering innovation in the crypto space and ensuring regulatory compliance.
Morek highlighted the importance of regulatory frameworks and their role in providing a stable environment for institutional clients. He stressed that while regulation is crucial, an excess of it could be detrimental. Coinbase’s approach involves advocating for regulation and actively engaging with regulators to ensure the crypto industry’s responsible growth.
Philpott emphasised the need for education in the space. He shared how he educated the board of directors at Standard Chartered Bank about cryptocurrencies, starting from the basics of public-private key cryptography. Philpott also pointed out that regulators are keen to understand the challenges and potential of digital assets but may not necessarily require entirely new regulations.
Practical steps and existing regulations
When asked about practical steps to improve the regulatory environment, both Morek and Philpott highlighted the importance of operating within existing regulations.
They noted that while new regulations may emerge in various jurisdictions, focusing on education, adapting existing regulations, and collaborating with regulators are key to facilitating institutional adoption.
International collaboration and unified guidelines
The discussion then turned to international collaboration and the potential for unified regulatory guidelines.
Philpott expressed scepticism about achieving global regulatory coordination, given historical precedents. Morek pointed out that within the European Union, efforts like the Markets in Crypto Assets Regulation (MiCA) were working towards harmonisation.
However, both speakers acknowledged the challenges in coordinating regulations on a global scale, particularly in jurisdictions that attempt to ban digital assets.
Blockchain, smart contracts, and efficiency
Moving on to the role of blockchain and smart contracts, the speakers discussed how these technologies enhance transparency and efficiency in financial transactions.
Morek highlighted scalability as a critical factor, with Layer 2 solutions like Coinbase’s “Base” aimed at improving transaction speed and cost efficiency. He also mentioned the importance of improving user interface functionality to attract institutional clients.
Philpott emphasised that blockchain’s impact goes beyond execution and is set to transform financial markets infrastructure. He used the example of foreign exchange trading, where smart contracts could eliminate settlement risk and enable 24/7 trading.
Both speakers noted the potential of stablecoins, such as USDC, in reducing cross-border payment costs and enabling faster transactions.
Disintermediation and efficiency gains
Regarding disintermediation, Philpott highlighted that custodians in the digital asset space often provide multiple services — such as custody and payment processing — effectively collapsing functions into one. This simplifies the process and reduces costs.
Philpott also pointed out that disintermediation could lead to significant efficiency gains in cross-border remittances, where traditional systems are expensive and slow.
The importance of cash in realising the benefits of digital assets
In closing, the speakers stressed the critical role of fiat and payment settlement in the digital asset transformation. They urged the industry to prioritise solutions that address the fiat aspect of transactions to fully realise the benefits of blockchain technology and stablecoins.
The fireside chat concluded with the speakers sharing their optimism for the crypto industry’s future—driven by reputable firms, responsible practices, and innovative solutions that promise to transform financial services.
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