Report by KPMG - "Crypto assets are a big deal"

[kabit9]

"Cryptoassets have potential. But for them to realize this potential, institutionalization is
needed. Institutionalization is the at-scale participation in the crypto market of banks,
broker dealers, exchanges, payment providers, fintechs, and other entities in the global
financial services ecosystem. We believe this is a necessary next step for crypto to
create trust and scale."


https://assets.kpmg.com/content/dam/kpmg/us/pdf/2018/11/institutionalization-cryptoassets.pdf

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[avikz]

The solutions KPMG has given are well envisaged. They have spoken about the holistic adoption of crypto assets by different segments of the market. Only institutionalization is not going to bring a big impact but it will certainly give us a solid step to move forward.

As per my experience in cryptos, I can briefly talk about the factors that can create a big impact in crypto market. The chronology can be similar to the below steps,

1. Regulation and legal framework
2. Holistic adoption by institutions and market participants
3. Adoption by small merchants supported by fintech companies
4. Social awareness campaign
5. Government's push towards innovation relates to blockchain and crypto

I can write a full sized article on this steps but these are the basic structure that can bring a good impact on the market and for the future of cryptos.

[kabit9]

2. Holistic adoption by institutions and market participants
 

What does this mean?  Institutions and holistic in the same sentence?  Sounds like a contradiction in terms.  

[olubams]

I was surprised to see KPMG coming in late at this when their counterparts PWC and EY have released various statements in support of both blcockchain and crypto currency and some of them ready to launch services in that regard in the nearest future. The issue that is universal to all of them in terms of challenge has and will remain the legal and regulatory framework and that is something I see would still cause significant disagreement between the proponents of crypto and those who are more liberal with the idea especially the capitalists. Eventually, the only thing to wait for is time which will determine the right course of action.

[BitHodler]

Institutions won't ever say 'hey, we're here!'. They are in the game already to some degree, slowly building up a legal framework for their slower counterparts to enter through financial instruments people here dislike.

I think we're slowly working towards crypto becoming a legal and well accepted asset class on its own, but it might take a decade or more to reach that level, but it's perfectly fine.

The internet for example isn't even near where it should be, and this offers amazing opportunities to buy yourself into, especially when you take into consideration that there are still billions of people without internet.

More people connected to the internet means more exposure for Bitcoin.

[leavolnhals]

 Yes, but there are too many bad organizations in this market right now. They are manipulating a lot and redeem themselves. This is an illegal business. If we are not protected and the market is going on like this, surely the blockchain technology will die.

[mummybtc]

Yes, but there are too many bad organizations in this market right now. They are manipulating a lot and redeem themselves. This is an illegal business. If we are not protected and the market is going on like this, surely the blockchain technology will die.

Don't think these big companies are stupid, they want a fair price, remember some of them help to push the price up and got burnt especially those that started fund management last year, they know what they are doing. People where shouting moon last year when BTC move to $20k from $6k in 35 days, we all love it but to be sincere I would have prefered steady growth than what we see last year.

[coinplus]

They are 100% right about the big companies getting in as the next logical step for crypto assets. First of all the reason why bitcoin got so high last year was because people who did not heard about bitcoin got into bitcoin last year. The number of people who know what bitcoin and crypto was got so high that the price reflected that interest.

Back in the day when prices moved from couple hundred to a thousand or anything before the reason was not enough people knew what bitcoin was and now they know what bitcoin is and the price increases. Now everyone knows bitcoin, there is not a single soul who doesn't know what bitcoin is. Which shows that if even grandma's heard about bitcoin, there is no more individual participation that will increase the price.

Right now, the next logical big step we can have is the huge financial companies getting in and making the market alive again.

[aoluain]

Institutions won't ever say 'hey, we're here!'. They are in the game already to some degree, slowly building up a legal framework for their slower counterparts to enter through financial instruments people here dislike.

I think we're slowly working towards crypto becoming a legal and well accepted asset class on its own, but it might take a decade or more to reach that level, but it's perfectly fine.

The internet for example isn't even near where it should be, and this offers amazing opportunities to buy yourself into, especially when you take into consideration that there are still billions of people without internet.

More people connected to the internet means more exposure for Bitcoin.

Yes im fine with this too. I used to hate the thought if institutions getting
involved with bitcoin and other crypto but im on with it. I see bitcoin and
crypto as an asset for all be it an investment or a payment system.
I also believe there are institutions already in this space, they see the potential.

[Renaldi blackspadeteam]

of course, I think it's true! Crypto assets can be a big problem if don't get protection right away. there are many illegal businesses, and I have heard news about groups manipulating crypto's asset prices on the market, and also many scammers, if left alone then the blockchain technology will be viewed poorly in the eyes of future beginners.

[LeGaulois]

institutionalization is  needed. Institutionalization is the at-scale participation in the crypto market of banks,
broker dealers, exchanges, payment providers, fintechs, and other entities in the global
financial services ecosystem.

In another word. It suggests regulations to open the doors to institutions. Do we really need "institutionalization "to realize the cryptocurrency potential? No, I don't think so. Anyone with a brain and knows the basis can see the potential to use digital currencies. Still good to see there are still people positive for the crypto market.

[kryptqnick]

The document is interesting and somewhat makes sense. They talk about a potential KYC requirement when more than $10k in equivalent for transferred, for instance, and I think it is totally fair. What I hate is when KYC is needed for minor things like a couple of hundreds of dollars. I think that something similar should hold for taxation. When someone has a big amount of money, it makes sense that this person should explain where it came from as well as pay taxes for the income. However, why should the government care about some minor transactions and income that is, say, less than $400 in developing countries and $1k per month in the developed countries? The gov won't lose much from not getting these taxes, while for the earners they might be a big burden (unless we are talking about less than 5% taxes, but unfortunately that's not the case where they get implemented). As for the general idea - well, they make some good point on the benefits for the regulated crypto market, but the big loss in the key idea of decentralization, of freedom. It's hard to say that we should give up this freedom.

[setupbounds]

"Cryptoassets have potential. But for them to realize this potential, institutionalization is
needed. Institutionalization is the at-scale participation in the crypto market of banks,
broker dealers, exchanges, payment providers, fintechs, and other entities in the global
financial services ecosystem. We believe this is a necessary next step for crypto to
create trust and scale."


https://assets.kpmg.com/content/dam/kpmg/us/pdf/2018/11/institutionalization-cryptoassets.pdf

This report was probably done before all of this bear started once again. Do they still think crypto assets are a big deal? That is the difference between digital and traditional. When in traditional markets you can reach to a CEO for a comment on some markets and they can give you an interview and tell you what they think about it and the markets will most probably be the same or at least early stages of some run.

However in digital markets (aka the crypto assets we are talking about here) can change so much during this process it can be 50% drop in the price. During the asking a question, getting an answer, doing an interview, publishing it, it takes at least 20 days and in 20 days bitcoin went from "it has been stable at 6.5 thousand range" to "it has gone mad again" which could change viewpoints of people.

[bots1]

I don't understand how cryptoassets institutions can be a solution to bubble value problems, because some of them will continue to think for profit. When many institutions are competing for profits, then how will new entrants benefit. Because of the more cryptoassets institutions, the more bubble value games.

[cellard]

The document is interesting and somewhat makes sense. They talk about a potential KYC requirement when more than $10k in equivalent for transferred, for instance, and I think it is totally fair. What I hate is when KYC is needed for minor things like a couple of hundreds of dollars. I think that something similar should hold for taxation. When someone has a big amount of money, it makes sense that this person should explain where it came from as well as pay taxes for the income. However, why should the government care about some minor transactions and income that is, say, less than $400 in developing countries and $1k per month in the developed countries? The gov won't lose much from not getting these taxes, while for the earners they might be a big burden (unless we are talking about less than 5% taxes, but unfortunately that's not the case where they get implemented). As for the general idea - well, they make some good point on the benefits for the regulated crypto market, but the big loss in the key idea of decentralization, of freedom. It's hard to say that we should give up this freedom.

Governments can implement KYC on exchanges, and are already doing so on all mayor exchanges. Nowadays they all require endless proof of identity. Most ask for phone, address, full name, and even a picture of yourself holding your ID which is extremely risky since that can be cloned a million times and spread around the net, which is why I have always opposed to do such thing, you never know where that picture would end. I did read that pictures like these were being sold on the dark web so I got scared and pretty much left all exchanges because I saw such requirement coming on Poloniex which is were I traded the most. Back then everyone was using fake names and stuff, it was riskier to give some unregulated exchange your real details.

Anyway, what I don't understand is: How are they going to implement KYC for actual bitcoin peer to peer transactions? As far as im concerned, that is impossible, which is what ironically makes BTC so undervalued at any rate.

[exstasie]

Anyway, what I don't understand is: How are they going to implement KYC for actual bitcoin peer to peer transactions? As far as im concerned, that is impossible, which is what ironically makes BTC so undervalued at any rate.

They obviously can't do that. The most they can do is pressure exchanges and other centralized services to implement KYC, and analyze the blockchain for ties to personally identifiable information. At the peer-to-peer level, all they can do is sit and wait for people to enter/exit the market.

I'm curious about how sophisticated Chainalysis is at this point, and how much the government knows about the network even without KYC information.