8btc Interview | How to Contribute to Crypto?
After the economic crisis of 2008, a series of disruptive disintermediation technologies emerged. Socio-economic and cultural changes caused a huge impact on the future financial model, that was when alternative finance began to rise.
Alternative finance refers to all online financial instruments, mechanisms or systems outside the traditional financial system.
On the one hand, the advent of alternative finance has supplemented the shortcomings of traditional finance, on the other hand, it has lowered the entry threshold of the financial industry, greatly facilitating people’s life, but also to a certain extent, it has intensified the regulatory concerns. As the demand for alternative financial instruments grows, academics, policymakers, regulators and industry companies are seeking to improve communication to properly develop this emerging field.
To this end, Cambridge Centre for Alternative Finance (CCAF) was established in 2015, to conduct cutting-edge, interdisciplinary, rigorous and critical research on every aspect of alternative finance. The goal is not only limited to academic, but hope to influence global policy decision-making and business practices.
At the end of 2016, CCAF created a cryptocurrency research team and started a global investigation into the status of crypto assets. The final result comes with “global cryptoasset benchmarking study”. The report comprehensively reflects the data and current situation of the crypto asset industry, and has become an important reference index and information source for the regulatory authorities, and even played a role in influencing the regulatory decisions.
Since the CCAF cryptocurrency research team was established, it conducted two surveys of cryptoassets in April 2017 and December 2018, respectively. Both 8btc and ChainNode participated in and assisted in the reports.
In April this year, the third global cryptoasset benchmark study started, 8btc and ChainNode were invited as scheduled, but also saw great support from Chinese community. Companies like OKEX, Huobi, Bitpie, Cobo, Hoo.com, Slowmist, Poolin, F2pool and Panda Miner (in no particular order) all participated in.
Why should the community participate in CCAF’s research? After two years of research, how has the global crypto asset environment changed? 8btc reached out to Apolline Blandin, head of CCAF’s cryptocurrency and blockchain research program, to uncover the story behind the global cryptoasset benchmark research report.
8btc: What do you think are good reasons for people joining in the survey?
Apolline Blandin: To my knowledge, it is the only survey of this kind, and we believe it could widely help companies within the industry, but also people, investors, policymakers who want to understand better how the industry has evolved and matured over time, what emerging trends are observed, what industry standards and best practices have been developing. We’ve conducted these surveys since 2017 and our objective is to create a repository of historical data on the industry that everyone can refer to either to conduct their own research or have access to a reliable source of data and analysis on the cryptoasset ecosystem.
8btc: I’ve learnt that your report about crypto assets can somehow influence regulation decisions. How the last two surveys influence regulation?
Apolline Blandin: Our previous reports have been widely cited in mainstream media, but also by regulators who conducted research on the cryptoasset ecosystem. Examples of these include the Financial Stability Board, the European Central Bank, and the OECD. Based on the feedback we received, this research has acted as an educational and reliable resource for regulators and policymakers in general. More broadly, the Centre engages with regulators on a regular basis to educate them on the topic of alternative finance, and sometimes bring more nuance to some of the misconceptions they might held.
8btc: It’s time for the 3rd global crypto assets benchmarking study. Have you seen any difference both in regulation and crypto community development during the last 2 years?
Apolline Blandin: Definitely. In 2018, we already noticed the development of some industry “best practices”, in regulatory terms. For instance, data suggested that having a compliance team has become an industry standard. We also saw a greater deal of compliance with KYC/AML standards, even for companies that only operated in the cryptocurrency space, i.e. did not support fiat currencies. Now, with FATF recommendation, and in particular the Travel Rule, we expect to see an increase in the development and implementation of these standards. This is also an important topic if the industry wants to attract institutional investors into the cryptoasset markets.
8btc: Sometimes people will blindly trust their instincts, which may not match with the truth. Looking back to the last two surveys, have you found any conclusion that surprise you a lot or completely different from your imagination?
Apolline Blandin: Yes! Actually, it might sound a bit contradictory to what I’ve just said, but the idea that some of these regulatory or security best practices can be generalized to the whole industry is not true. There will be variations, mostly based on geographies. Another interesting one is the location of cryptoasset companies’ primary banker. There is a misconception that entities that banks cryptoasset companies are based in offshore jurisdictions. However, we saw that for most companies, their primary banker was located in their country of operations.
8btc: Regarding these two surveys, what role do you think Chinese community plays on crypto assets world? How will you evaluate their contributions?
Apolline Blandin: It was very challenging to collect data from Chinese actors in 2018, mainly, we believe, because of the regulatory intervention of September 2017. This year, it is crucial that we get an accurate sample from Chinese actors as it is one of the most active community; this is of utter importance to ensure that our analysis is representative of the global industry. Therefore, we highly encourage any Chinese players active in the cryptoasset industry (this also includes mining!) to participate and help us produce fresh and reliable insights that would be useful to the whole industry!