While one of the largest crypto exchanges, FTX, collapsed and filed for bankruptcy, some market participants are not concerned whether the collapse will change institutional interest in crypto.
“I feel like once you gain momentum for an institution, it’s hard to get them to turn their heads and turn,” Grace Berkery, director of startup engagement at Mastercard, said at Benzinga’s Future of Crypto talk. -event. “So when they go in, they stay in space.”
Speaking at the “Status of Venture Funding in Crypto and Web3” panel, Berkery said she doesn’t think institutions will back down from the industry, instead focusing on becoming more careful about their commitment and who they partner with. such as working with companies with a proven track record and existing customers. “The focus will be less on buzzwords and hypes in the space and more on what is the tangible value you add as a company.”
Mastercard is no stranger to the crypto industry and has been supporting it for years through investments and initiatives such as bridging banks to provide the ability to offer cryptocurrency trading to customers. It also partners with crypto companies such as Binance, Nexo, and Gemini to launch Mastercard-affiliated crypto cards.
“I think it’s an opportunity and time to reset,” Berkery said. “At Mastercard, we believe there is a lot of promise in the underlying technology. A lot is happening in space.”
Berkery said there are “definitely” still opportunities for institutions to partner with crypto companies.
“We are taking a collaborative approach,” said Berkery. “We are not experts in space. [We ask,] “How can we work with you to bring what we know as a traditional financial institution and combine that with the web3 space?”
Over the next 12 months, topics that traditional financial institutions hold dear will include value-added services such as cybersecurity, fraud analysis, identity management and others that “can really help stabilize the market,” Berkery said.
She also thinks utility NFTs and metaverse-based use cases will continue to be a big area for investors and institutional engagement, particularly with a focus on how to target traditional consumers through loyalty and increased customer engagement use cases.
“Nothing is off the table,” Berkery said. “It really comes down to how you’re going to add value to these traditional businesses and institutions.”
The need for institutional involvement in digital assets is contested in crypto communities. While some believe the involvement could increase the overall value of the crypto market, stimulate new use cases and increase adoption, others believe that institutional participation could hinder decentralization and hinder innovation due to the reliance on existing regulatory frameworks that old-school finance must adhere to. , among other things.
While a handful of financial institutions have gotten into crypto in recent years, the pace has accelerated over the past 12 to 24 months. In July, market players told ExamPaper that there is significant institutional interest in decentralized finance, and even before the collapse of FTX, institutional interest has not “wavered” even though crypto assets are trading well below all-time highs.
Time will tell how and if institutions enter the space with the same cadence as in the recent past.