Umar Farooq, the head of the digital asset department at JPMorgan, recently attended a discussion panel at the Monetary Authority of Singapore’s Green Shoots. The seminar focused on dealing with various digital assets including cryptocurrencies and NFTs. During the panel, Farooq noted that the industry suffers from the lack of regulations and absence of standard financial practices meaning that traditional investors and institutions cannot meaningfully interact with various crypto assets.
He also pointed out that among many names of crypto projects mentioned during the panel discussion he heard only a handful that had any utility. Everything else was called “junk” that will probably turn into nothing but a memory very soon. Farooq was also quite vocal about the obscurity of some mentioned coins which will be nothing but noise even during their “high” moments.
The representative of JPMorgan also noted that the whole sector could use some maturation and focus on providing useful utility while offering more options for users who want to be able to make larger transactions. The lack of financial products that could provide utility to banks and investors that work in the TradFi (traditional finance) sector.
At the moment, the whole industry seems to be focused on creating hype and allowing for wild speculations, but the whole concept of web3 does not seem to be too appealing to institutional investors and large capital holders. Farooq said that he does not see any web3 infrastructures that do not facilitate speculative trading.
Interestingly enough, both JPMorgan and Black Rock Inc. are interested in using tokenized depositing and collaborating in this area. The interest of institutional investors in Defi seems to be very low and many companies are just not interested in using cryptocurrencies in the form they operate currently.
The panel also touched upon several other hot topics including the upcoming merge of the ETH network, potential use cases of various crypto projects, and more. However, the most peculiar topic was the current interpretation of the crypto domain by people like Umar Farooq who make decisions involving millions and can affect the way TradFi sees Defi!