The cryptocurrency sector has experienced significant maturation over the past decade, according to Melissa Wisner, the vice president of crypto risk at Ciphertrace, Mastercard’s crypto intelligence firm. Speaking at a panel discussion at the D3 conference in the Bahamas, Wisner highlighted the close links between the traditional financial system and the crypto ecosystem.
Contrary to the notion that cryptocurrencies will replace banking institutions, the crypto space is not moving away from the traditional financial system. In fact, an increasing number of major financial institutions are exploring blockchain technology. BlackRock, the world’s largest asset manager, recently tokenized its money market fund shares for the first time using JPMorgan’s Ethereum-based Onyx blockchain. Similarly, Citigroup, the third-largest banking institution in the U.S., launched Citi Token Services, a blockchain-based cross-border payment solution for institutions.
Wisner noted that many of Mastercard’s banking partners are not interested in crypto due to their low-risk appetite for the asset class. However, the acquisition of Ciphertrace by Mastercard in September 2021 underscores the belief that virtual assets and crypto are a lasting part of the financial future. Ciphertrace, founded in 2015 by the U.S. Department of Defense, provides Mastercard with valuable insights into crypto risk and intelligence.
As the cryptocurrency market continues to evolve, it is becoming increasingly intertwined with the traditional financial system. This integration highlights the growing acceptance and recognition of cryptocurrencies as a legitimate investment and financial tool. While there may still be concerns and hesitations regarding the risks associated with crypto, the industry’s maturation and the involvement of major financial institutions suggest that cryptocurrencies are here to stay.