Paul Brody, the Global Blockchain Leader at Ernst & Young (EY), appeared earlier today on CNBC’s “Street Signs” to discuss a range of topics concerning the cryptocurrency market. Brody began the conversation by emphasizing the significant pent-up demand for cryptocurrencies, particularly from institutional investors. He noted that while family offices, known for their flexibility, are already invested in cryptocurrencies, other institutional funds are restricted unless they can invest through an ETF or another regulatory-approved vehicle.
Brody acknowledged the risks associated with the influx of retail money into the crypto market, agreeing with the male interviewer, who cautioned that while there might be an initial surge in investment, external events could trigger a liquidation, altering the market dynamics.
Distinguishing between cryptocurrencies and traditional assets like gold, Brody pointed out a unique feature of Bitcoin. Brody pointed out that unlike gold, whose supply can increase when its price rises, the issuance rate for Bitcoin is fixed and will eventually cease. This, according to Brody, could make Bitcoin’s pricing more inelastic compared to other assets that serve as hedges against inflation or restricted supply.
Brody also touched upon the geopolitical uncertainty that seems to be abundant at present. He suggested that this uncertainty could contribute to the volatility of cryptocurrencies, especially if people are buying them as a hedge against political instability.
Finally, Brody talked on the topic of cryptocurrency adoption, particularly focusing on the different use cases for Bitcoin and Ethereum. He observed that people are buying Bitcoin primarily as an asset, not as a payment tool. On the other hand, Ethereum is being purchased as a computing platform for business transactions, decentralized finance (DeFi) services, and stablecoin transactions, according to Brody. He concluded by stating that the future of payments is likely to remain with fiat currencies and stablecoins, as we move closer to an era potentially dominated by central banks.
Approximately two months ago, Brody discussed the necessity of creating regulations for cryptocurrencies and explored how enterprises can leverage Ethereum in a conversation on Bloomberg TV.
Brody began the interview by discussing the significance of Ripple winning part of its case against the SEC. Brody emphasized that any progress toward regulatory clarity is beneficial for the crypto industry. He also mentioned that draft legislation from U.S. Congress appears reasonable, and he hopes that legal decisions and pending legislation will converge to provide clearer rules for the industry.
When asked about the potential approval of an Ethereum ETF, Brody stated that it would be a game-changer. He highlighted the growing distinction between Bitcoin, which is increasingly seen as digital gold, and Ethereum, which is evolving into a global computing infrastructure. Brody believes that having separate ETFs for Bitcoin and Ethereum would allow investors to take a stake in the Ethereum ecosystem, thereby contributing to its overall development.
Brody, who recently authored a book titled “Ethereum for Business,” explained that Ethereum is not just about finance and decentralized finance (DeFi). He stated that Ethereum is a robust platform for tokenizing assets and tracking supply chains. At Ernst & Young, they are working on various projects, such as tokenizing carbon offsets, tracking pharmaceuticals, and managing procurement agreements. Brody emphasized that Ethereum provides a neutral, decentralized infrastructure where enterprises can transact on equal terms.
Brody was asked whether the blockchain world would eventually be dominated by a single chain like Ethereum. He responded affirmatively, drawing parallels with the world of computing infrastructure, where standards often dominate. Brody believes that Ethereum is on track to become a global base layer standard for digital business transactions, similar to how TCP/IP is a global network standard.
Toward the end of the interview, Brody expressed concerns about the U.S. falling behind in blockchain adoption compared to other regions like Europe, the Middle East, and Asia. He noted that these regions are advancing rapidly in terms of regulatory environments and are experiencing faster growth in blockchain and crypto work. Brody warned that the U.S. risks being left behind if it does not catch up in terms of regulation and adoption.
Brody concluded by stating that although the U.S. is growing in terms of blockchain adoption, it is lagging behind other regions. He urged for quicker regulatory advancements to keep pace with global developments.
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