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SBF predicts five major directions in 2022: Stablecoin, regulation and open finance

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The crypto ecosystem needs to do a better job of managing specific things in 2022. Everything matters.

On December 28, SBF, CEO of FTX, tweeted his thoughts on the development of the crypto industry in 2022, as follows:

What should encryption do as an industry? Well, let's look at where we are and where we want to be. The crypto industry already has:

1. Solid user base: there are about 200 million encryption users in the world;

2. Smart contracts: I think smart contracts are significant for the crypto industry and are the main reason for taking encryption from digital gold to Web 3/ Metasomes /DeFi, etc.

3. Potential use cases: remittance, payment, store of value, NFT in the meta-universe, information transfer, social media, tokenized assets, disintermediation finance, etc.

4. Capacity expansion solution: new L1, L2, Lightning network, Rollup, etc. The scale-up solution now supports 50,000 transactions per second;

5, a lot of attention: now the total market value of the encryption industry is about 2.5 trillion DOLLARS, slightly lower than Apple or Microsoft, but the attention of the encryption industry is certainly higher.

Overall, things have been going pretty well for the crypto industry over the past few years, but what's missing?

1. Regulation: There's a lot of tension between the crypto industry and regulators, and in many cases, frustration on both sides. Unclear regulatory processes for Token issuance, platform registration and Stablecoin in multiple jurisdictions make it difficult for the crypto industry to move forward safely and for institutional players to participate. In addition, many regulators find it difficult to work with crypto companies;

Blockchain scale-up solutions are not enough. Current scale-up solutions can now support 50,000 transactions per second, but industry-scale applications typically need to process millions of transactions per second.

So what does the crypto industry need to watch out for as it looks ahead to 2022?

1. Regulation: The crypto industry should work with regulation to allow liquidity to move to the US, Europe and other jurisdictions;

Stablecoin: Create a Stablecoin framework based on reporting/transparency/auditing to ensure sufficient reserves to support Stablecoin;

3. Open up financial networks: ensure that open financial networks grow and are not limited to existing banks;

4. Standardization of market supervision: create similar standards for encrypted spot and futures in a unified system;

5. Institutions: Build information disclosure, registration and anti-fraud regimes based on Token issuance so that consumers and institutions can easily interact with the digital asset ecosystem in a way that provides customer protection and regulatory clarity.

I am very optimistic that the crypto industry can achieve these goals in the next few years. On the use-case side, the biggest hurdle right now is network effects. In order for crypto payments to work, both buyers and sellers need to support encryption. Building networks is slow, as are blockchain-based social media and information flows. Leveraging the existing video game audience is probably a good way to do it, because we have billions of people playing games and hundreds of billions of dollars in the industry, so we need to make a great game and integrate NFT in a way that makes the game better. At the same time, the network needs to be constantly expanded. Some people say blockchain processing is fast, but it's not. We don't support millions of transactions per second.

The crypto ecosystem needs to do a better job of managing specific things in 2022. Everything matters.