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FTX CEO says speed, scaling, and regulation will help crypto grow in 2022

By:
on Dec 28, 2021
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  • Bankman-Fried says the crypto space has achieved multiple milestones in 2021.
  • According to him, the crypto sector has a vast user base because adopters have exceeded 200 million.
  • FTX CEO advocates for a unified regulatory regime that create standard regulations for spot & futures markets.

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FTX founder and CEO Sam Bankman-Fried believe the crypto space performed well in 2021 despite many ups and downs. He aired his opinions through a tweetstorm on December 27, noting that the crypto industry has come a long way. However, he claims it must achieve three milestones in 2022 to grow further. These are regulation, scaling, and high transactions speeds.

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According to Bankman-Fried, the crypto industry already boasts a solid user base, with approximately 200 million people embracing the sector. He added that smart contracts played a pivotal role in transforming the industry from just being digital gold to web3, which includes the metaverse, non-fungible tokens (NFTs), and decentralized finance (DeFi), among other sectors.

He also acknowledged that the use cases of digital assets have increased to include remittances, payments, store of value, NFTs in the metaverse, information transfer, social media, tokenized assets, and disintermediated finance.

Moving on, Bankman-Fried pointed out that the crypto space now has several scaling solutions, including L1, L2, Lightning, and Rollups, among others. He also highlighted that the crypto sector got broad recognition this year despite having a market cap smaller than Microsoft and Apple.

No blockchain network is fast enough

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Emphasizing the need for scaling, Bankman-Fried said he always laughs when a blockchain network claims to be fast. According to him, fast means millions of transactions per second, and no blockchain has achieved this milestone. To this end, he encouraged networks to continue working hard to become better.

In so doing, he claims the crypto industry might be able to tap into the existing userbase of video games, which would see it rake in hundreds of billions of dollars each year. However, he believes the industry can only achieve this feat if it makes virtual worlds more engaging.

Regulation is a major concern for crypto

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Talking about regulation, Bankman-Fried said,

The biggest thing here is to work collaboratively on ways to address current regulatory gaps while allowing liquidity to move onshore — to the US, and to Europe, and other jurisdictions.

He said stablecoins are, perhaps, the easiest to regulate. According to him, the government should create a framework that supports reporting, transparency, and auditing. In so doing, he believes regulators would be able to ensure stablecoins are backed as their issuers claim.

Bankman-Fried claims this solution would solve around 80% of the problems affecting stablecoins, allowing them to thrive onshore. However, he believes it is imperative to have an open network, which is not restricted to existing banks, seeing as this would defeat the purpose.

The FTX CEO added that the US government should introduce a unified regulatory regime that introduces standard regulation for spot and futures markets. He also advocates for the creation of disclosure, registration, and anti-fraud-based regime for token issuances.

According to Bankman-Fried, the whole point of regulating crypto is ensuring the space has consumer protections and clarity that makes retail and institutional investors comfortable. He further noted that he believes the US crypto industry will achieve this feat in the next few years, adding that there is a light at the end of the tunnel.

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