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Building bridges to the crypto space

What happened?

Binance, one of the world’s largest crypto exchanges, announced Venus, ‘an independent and autonomous, regional alternative to Facebook’s Libra’. Where Facebook wants to become the global currency for the internet, Venus aims to be the currency for the unbanked countries. Similar to Libra, Venus is trying to deal with the volatility that frustrate the current crypto market by becoming a stablecoin, thereby making them more interesting as a means of exchange. More specifically, Binancedescribed Venus as an “initiative to develop localized stablecoins and digital assets pegged to fiat currencies across the globe”, showing their intent to Furthermore, Bakkt, a futures trading platform for Bitcoin got approved by the CFTC and NYDFS and is ready to launch on September 23rd.

What does this mean?

Big projects like Libra, Venus and Bakkt show that the crypto industry is increasingly trying to bridge the gap between radically decentralized initiatives and the traditional industry and institutional world. Some believe that these initiatives represent a better alternative to their more decentralized counterpart and as such will replace it in the long term. However, we hypothesize that these developments should actually be seen as a gateway towards decentralization, as systems like Bitcoin and decentralized exchanges still offer unique complementary functionalities (e.g. open innovation, decentralized, censorship resistant, borderless, ownerless). Furthermore, as we can already see with the political backlash that Libra has received, hybrid projects that in some shape or form have to rely on a more centralized organization, can be pressured more easily and will be hampered in their ability to innovate and expand.

What’s next?

The coming months and years we will have to see to what extent these developments will attract institutional investors to the crypto space, as Libra and Venus are currently exposed to substantial scrutiny. Nevertheless, these announcements show thatmomentum is building, restoring some of the trust that was lost with the crypto bubble in 2017.