While speaking at G20, Hong Kong Monetary Authority CEO Eddie Yue highlighted that crypto and decentralized finance are here to stay.
The regulatory authority worldwide has been keeping an eye on the crypto sector. Luna’s crash and the fall of some significant centralized exchanges have given enough reasons to be cautious about the next plan.
Amidst the negative sentiments, Hong Kong Monetary Authority chief executive Eddie Yue has said there is a need to recognize the potential importance of the technology that drives these innovations.
Eddie Yue said, ”Despite the Terra Luna incident, I think crypto and Defi won’t disappear – though they might be held back – because the technology and the business innovation behind these developments are likely to be important for our future financial system.”
He also mentioned that the best way to regulate the stablecoin market is to ensure compliance across stable coin issuers and crypto exchanges.
Earlier in January, Hong Kong Monetary Authority stated that it would cautiously explore its relationship with crypto by “ striking the right balance between maintaining a safe and efficient financial system in Hong Kong and supporting financial innovation.”
Some ill-famous crypto setbacks that the world witnessed:
1.Luna Debacle shook the world as a whole. People lost their hard-earned money as Luna was wiped from the market. It created a domino effect and knocked on the companies exposed to UST-Luna like Three Arrow Capital.
2.Another shock came when Celsius paused withdrawals for the customers. Celsius worked more like a bank where it used to provide yields to investors for depositing their crypto. The yields went as high as 18%. Just as banks circulate the money deposited, Celsius used to lend crypto to other players at high yields. Those players would then use that crypto for trading.
3.Three Arrow Capital (3AC), a Singapore based, suffered massively due to the UST collapse. 3AC had exposure to Luna, but 3AC came tumbling down after its collapse. It even failed to meet its margin calls from BlockFi.
Conclusion:
Even after what the world has faced recently, people still have faith in crypto and Defi.
The future will look better if the regulatory bodies can bring regulations that work in tandem with crypto.
