However, Robert Courtneidge, chief executive of international payments business Moorwand, is wary about the long-term cryptocurrency outlook and he remains sceptical about the benefits of cryptos as an asset class. The launch of Libra offers the possibility of cryptocurrencies finally moving from a niche to a mainstream investment. “But, if anything, it raised more questions than it answered.
First, could a global and trusted stablecoin become an alternative to the US dollar? And second, who should run such an operation. Banks? ‘FAANGs’? Governments?” he asks.
“Cryptocurrency presents an opportunity for wealth managers to diversify their portfolio and, due to its volatility, there’s money to be made for those investing and capitalising on arbitrage opportunities,” says Mr Courtneidge. “But the question remains, why would you invest in an asset-backed stablecoin instead of the asset itself?”
Regulators and the industry have work to do, argues Mathieu Saint-Cyr, managing director and head of asset management at Geneva Management Group. “For the view on financial assets to shift, co-operation between regulators, cryptocurrency builders and other players must be encouraged and fostered,” he says.
Mr Saint-Cyr emphasises that there is a significant difference between the various fintech products currently available. “The focus on cryptocurrencies has a tendency to overshadow tectonic shifting and innovation made by the likes of, say, blockchain technology or tokens,” he says. “Asset-backed tokens are seeing increasing growth and adoption, and I would say this is where wealth managers can potentially add value for their client.” raconteur.net