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Crypto Experts Predict Stablecoins to be Fundamental For The Industry in 2022

Denis Goncharenko

2021 has been another tumultuous year for the crypto markets. There have been occasional ten to twenty percent fluctuations in the price of Bitcoin since January, but the overall rise has been about 65 percent. As payment companies like PayPal began allowing customers to trade crypto, it drew in a new crop of private investors.

The scope of the business has now extended well beyond bitcoin. Toward the end of the year, CEOs are focusing on NFTs, blockchain-based video games, and "Web3." There is still a lot of ambiguity about regulation.

For "regulatory clarity," Sam Bankman-Fried, the CEO and creator of FTX startup, says that he doesn't anticipate legislation to be the immediate solution. Just as likely, Bankman-Fried added, are comments and enforcement actions, and "other signals," to establish the guardrails.

Solana remains the CEO's preferred option to Ethereum. A "Holy Grail" blockchain capable of supporting a million transactions per second might emerge, however, this is not certain to happen. There are now "few even attempting to reach that position," he added.

Over the next several years, there will be a significant expansion of the crypto regulatory framework. According to the majority of banks, they've already made up their minds to join the crypto community. But the intricacies of the regulatory system will dictate how and when they do it. However, resolving it is a simple matter. If you're audited by regulation, you have attestations.

“Is the stability of stablecoins a concern for people? As long as you can do that, you've taken care of most of the concerns people have about client safety and systemic risk. It's not a difficult task. Because of this, I'm cautiously hopeful that this is where things are headed.” – Sam Bankman-Fried says.

It is also worth noting that the CEO of Circle Jeremy Allaire is urging e-commerce companies, customers, and financial institutions to utilize dollar-pegged cryptocurrencies, or stablecoins, more often. Stablecoin USDC is a stablecoin operated by Circle, which is planned to become public through SPAC. Allaire expects to see a rise in the use of NFTs by institutions, as well as celebrity endorsements from NFTs. On some of the most hotly contested acquisitions in crypto, DAOs may potentially "fight venture capital investors," he added.

The greatest danger, according to Allaire, are the rules and policies described as "incoherent and contradictory, hurriedly created."

High-yield prospects provided by digital assets will be sought after even in an environment where the Fed hikes interest rates. Consequently, expect to see an increase in the use of digital assets by financial institutions, whether directly or through exchange-traded funds (ETFs).

New legislation and rules will be introduced more quickly than many people imagine because of the widespread realization that blockchain and crypto technologies constitute a US economic edge, particularly if properly regulated. There will be a steady increase in stablecoin use in 2022. Internet-based money will be as efficient and readily accessible as text messaging and email in the near future, according to our predictions, – in the opinion of Allaire.

Former Acting Comptroller of the Currency Brian Brooks said politicians in Washington have finally come to terms with the fact that cryptocurrency is here to stay. After a record-breaking year in 2021, he predicts additional blockbuster fundraising rounds and mainstream recognition of the crypto business.

He explained that not every "crypto" is a currency or is supposed to function as currency. For Wall Street corporations and other financial services organizations that have not yet entered the crypto ecosystem, it is a question of "when" rather than "if."

“The United States will approach a tipping point in the necessity for decisive governmental action that builds a sustainable framework to enable crypto and Web 3 growth. We can't dismiss the danger to American competitiveness in the technology and finance markets posed by this level of activity and invention.” – Brooks declared.

PayPal's crypto service is powered by Paxos, a firm that operates in the background. There will also be greater activity in the stablecoin market, according to CEO Charles Cascarilla – USDP is a dollar-pegged currency created by his firm.

"The year 2022 will be the year of the stablecoin. This year, stablecoins were made available to consumers for the first time. Regulation of stablecoins such as USDP is the solution. Safe blockchain innovation in the United States will be fostered by regulatory clarity, consistency, and assurance. In the long run, this technology promises numerous prospects for American market predominance, but there are also enormous hazards if we get it wrong."

It is also worth noting that with the launch of the first Bitcoin ETF based on futures this year, the sector reached a major milestone. Grayscale and others in the business, on the other hand, are attempting to go a step further. So, despite the current downtrend, the crypto market in general is making huge steps to general and total adoption.

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