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What the crypto trading of the future could look like

© APA/AFP/JUSTIN TALLIS / JUSTIN TALLIS

01/12/2023

Barbara Wimmer

In Europe, crypto exchanges will be regulated for the first time this year. Trading digital currencies could change a lot in the coming years

“A last breath before the path to irrelevance,” described the European Central Bank (ECB) The state of cryptocurrency at the end of 2022 Bitcoin. The reason for this was the collapse of the crypto exchange FTX, which caused severe turbulence in the entire market. “The ECB has an interest in national currencies remaining attractive. Therefore, their statements about Bitcoin do not surprise me. However, I do not share them,” says crypto expert Peter Grosskopf in the futurezone conversation. The industry is currently well acquainted with the loss of trust, because after the FTX bankruptcy, prices plummeted.

So far unregulated

“The technology works very well and will have a future,” says Grosskopf. “Demand from people who wanted to trade cryptocurrencies was initially very high. So far, trading has mainly taken place on centralized platforms such as FTX, which are based in the Bahamas or in similarly unregulated regions,” says Grosskopf. Centralized means that people deposit the money there in a similar way to a bank. “However, there have not always been security or compliance standards there, so fraud is more easily possible there. “The loss of trust affects these centralized offers more than the blockchain technology itself, which basically does not require such intermediaries,” explains Grosskopf.

As a former co-founder of the Solaris bank both the financial and crypto worlds. He has with Unstoppable finance himself founded a start-up that wants to bring the still new, fully decentralized crypto finance sector “closer to the people”.

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Peter Grosskopf is co-founder of Unstoppable Finance and co-founded Solarisbank

mobile app

With your smartphone app you can earn interest, exchange digital goods and process transactions digitally. The account is opened with just a few clicks directly on the smartphone. “But unlike centralized marketplaces, our app keeps people in full control of their digital assets, as if they were keeping them in their own wallet. You only have to trust us as a company to the extent that we develop the software correctly and that it is secure,” says Grosskopf. This concept is called “DeFi‘ and it might 2023 spread more and more after the FTX bankruptcy.

The “Ultimate” app is currently available in Austria and 100 other markets Apple App Store, a Androidversion should follow in a few months.

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DeFi
DeFi stands for Decentralized Finance. It is a collective term for financial services that are processed decentrally (i.e. without a middleman).

difference
In contrast to classic financial services, DeFi transactions are based on digital contracts that are automatically executed when certain conditions are met in a transaction. The terms of the contract are written directly into the lines of code and cannot be changed by humans

EU decides on crypto regulations

Centralized stock exchanges will soon be regulated in Europe. in the February a set of crypto rules should be decided. “Bank-like platforms are given bank-like rules,” says Grosskopf. “That could lead to a gain in trust,” says the expert. But this regulation only affects centralized trading platforms, such as FTX was.

“In contrast to classic banks, the financial service at DeFi is provided by software. Instead of regulation, the software could be audited for security and functionality in order to create a long-term secure offer,” says Grosskopf.

The Unstoppable Finance app therefore remains unregulated (for now). That’s the right thing to do, says Grosskopf. “After all, the manufacturer of a wallet does not need a banking license either. If the user is his own bank, he bears the responsibility himself.”

Source: futurezone.at

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