Benzinga - With people's belief in Bitcoin (CRYPTO: BTC) and its finite supply, the digital asset has the potential to become a global reserve asset, Jamil Nazarali, CEO of EDX Markets, said on Tuesday.
In an interview with Benzinga, Nazarali, who will be speaking at the upcoming Benzinga Future of Digital Assets conference on Nov. 14, delved deep into the challenges and opportunities presented by the digital asset space.
He said EDX Markets, founded approximately a year and a half ago, was established to bridge the gap between traditional finance and the digital asset world.
Nazarali highlighted the differences between traditional financial exchanges and crypto exchanges, noting that the latter often custody client assets, a practice not seen in traditional finance.
"EDX Markets is meant to look like traditional finance, but for crypto assets," he explained.
Discussing the potential of Bitcoin and Ethereum (CRYPTO: ETH), Nazarali expressed optimism.
"I think that they're here to stay. I think that there are strong use cases for them, and I think that there will be greater and greater adoption over time."
He emphasized Bitcoin's functionality over gold, especially in terms of ease of transfer and its potential as a reserve asset.
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"Bitcoin is a lot easier to carry around than a bag of gold," he remarked.
On the topic of decentralized finance (DeFi), Nazarali expressed skepticism, particularly concerning the challenges of implementing proper anti-money laundering controls in a decentralized environment.
He believed that without some central authority, many DeFi protocols might face exclusion from the banking system.
When asked about the potential for cryptocurrencies to become a global reserve asset, Nazarali responded: "Certainly at the end of the day, what's required for something to be a reserve asset is people have to believe in it."
He added that as long as people believe in its value and given its functionality, Bitcoin has a strong case for being considered a reserve asset in the future.
Speaking about the regulatory challenges faced by the crypto industry in the U.S., Nazarali stressed the importance of clear rules and frameworks for businesses to operate within, suggesting that uncertainty is a significant deterrent for many companies.
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