Sovereign Powers Could Be Key to Mass Crypto Adoption

This post is part of CoinDesk’s 2019 Year in Review, a collection of 100 op-eds, interviews and takes on the state of blockchain and the world. Ryan Zurrer is founder of Dialectic, a Swiss-based crypto-asset firm focused on on-chain opportunities. Previously, he led investments at Polychain Capital and served as Chief Commercial Officer at the Web3 Foundation. 

Nation-states made a more substantive impact this year than the ten previous years of crypto combined. China’s statist approach, in particular, may prove to be a catalyst to the still elusive “mass adoption of crypto.”

In the US, the SEC made headlines with several high-profile enforcements including EOS, Telegram, and kin, while federal lawmakers made their presence felt regarding Facebook’s Libra. FINCEN’s KYC/AML guidance factored prominently, and token sales and SAFT rounds slowed in 2019, driving much of the fundraising activity towards exchange platforms, causing a short blip of popularity in IEOs.

Regulatory action may have caused deal flow to slow, U.S. entrepreneurs and investors say, even if Silicon Valley will continue to produce some of the most compelling innovation in blockchain. As the industry moves forward into bitcoin’s second decade, there will continue to be high-drama friction as we try to reconcile crypto-anarchist ideals of pseudonymous participation with long-standing regulations around securities, KYC/AML and money-transmission laws.

We saw cross-border collaboration around the FATF enforcement recommendations, calling for exchanges to share customer information. But it remains to be seen whether this mandate will affect exchange activity or if it will drive a renaissance in decentralized exchange volume in 2020.

During the first three quarters, we saw China step forward and embrace blockchain technologies. The People’s Bank of China announced plans for a national sovereign digital currency, the DCEP. Industry observers and PBoC’s development team expect it to launch…

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