The crypto market is seeing significant interest from traditional financial institutions, with former Barclays CEO Bob Diamond highlighting the involvement of asset management giant BlackRock in the industry. Diamond, who during his time at Barclays, collaborated with BlackRock in investing in Circle, the issuer of the world’s largest stablecoin, USDC, expressed his enthusiasm about mainstream firms engaging in the crypto sector.
In April 2022, Circle announced a $400 million funding round led by BlackRock, overseeing the cash reserves that support its $29 billion token. BlackRock’s recent filing with the U.S. Securities and Exchange Commission (SEC) to launch a Bitcoin Spot ETF showcases the company’s increased involvement in the crypto ecosystem. Investors in the United States have been eagerly anticipating the approval of such an investment vehicle, which is already available in countries like Canada and Australia.
However, BlackRock’s ambitious move into the crypto space has not been without skepticism. While the SEC has rejected every related filing so far, many remain hopeful that BlackRock’s history of gaining SEC approval for its products will increase the likelihood of a Bitcoin Spot ETF being greenlit. Since the filing, Bitcoin has reclaimed over 50% of the crypto market dominance for the first time since June 2021, with its price surging past $30,000, and two more asset managers re-submitting applications for Bitcoin spot ETFs following previous failures.
The broader crypto world is facing challenges as regulatory scrutiny intensifies. The SEC has launched lawsuits against crypto exchanges Binance and Coinbase earlier this month for securities law violations, alleging multiple large-cap altcoins as unregistered securities. Diamond believes that for crypto to reach its full potential, clearer regulations and enforcement actions are required. His strong advocacy for “Regulation, regulation, regulation” calls upon regulators to stop avoiding the issue and provide the necessary guidance, asserting that strong banks want strong regulation.
Interestingly, the Head of Digital Policy at Barclays in April suggested that policymakers had not bothered to regulate crypto until now because they did not believe it would survive this long. However, with major financial institutions like BlackRock entering the space, it seems that regulatory attention is only set to grow, resulting in both opportunities and challenges for the future of the industry.
Despite his enthusiasm for the growing involvement of mainstream firms in crypto, Diamond admits that he “sadly” does not personally own Bitcoin. Regardless, his commentary on the implications of BlackRock’s foray into the sector reflects the evolving landscape of the digital asset market and its increasing intertwinement with traditional finance.
Source: Decrypt
