• Regulation can bring clarity and security to the industry, especially for newcomers who have concerns
  • Regulated financial institutions tend to consider regulatory concerns prior to product launch, which can slow the process but will exchange client trust

Digital Asset Summit 2021, New York City — Banks and regulated financial institutions may be slower to bring products to market due to their regulatory requirements, but it helps to bolster client trust, Ziad Iskandar, senior lead, advanced solutions and digital assets unit at BNY Mellon, said during a panel at the Digital Asset Summit Tuesday. 

“Because we are regulated, that doesn’t always make life so easy, and it does influence product design,” said Iskandar. “We have continuous discussions about safety and soundness of what we are doing and if you are a client, those are questions you want answered.” 

Taking a conservative regulatory approach may not be the fastest way to give clients exposure to cryptocurrencies, but it is never time wasted, Iskandar said. 

In terms of bringing sound products to market, regulated institutions are more familiar with the process and framework, Ben Reynolds, chief strategy officer at Silvergate Bank, said during the panel. 

DAS panel
The Future of Financial Services and Digital Assets Panel at Digital Asset Summit 2021.

“When you are a regulated institution, there is a clear path for launching products and defined standards that need to be met and maintained,” He said.

When it comes to new projects and protocols, these players often do not have the same considerations in mind. Project launch comes before regulatory considerations, Reynolds said. 

The panelists agreed that regulatory clarity in the space will help to advance the digital asset industry and give investors a greater sense of security. 

“There is money on the sidelines that’s waiting for the space to be more regulated,” said Reynolds. “​​As regulation comes in and as some of these questions start to get figured out, I think that more capital will come into the space, and a rising tide lifts all boats.”

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    Casey Wagner is a New York-based business journalist covering digital assets and macro economics. Prior to joining Blockworks, she reported on markets at Bloomberg News. She graduated from the University of Virginia with a degree in Media Studies.