No. 711 - What's next for crypto?

The crypto world is at a turning point. In the spring of 2022, idiosyncratic weaknesses and adverse macro conditions combined to precipitate a major crisis, which also offers opportunities. Crypto firms can now focus on innovation rather than speculation, especially as new regulation will bring order to the sector in many jurisdictions.

Constructive cooperation between regulators and the industry is necessary, but it will not always be easy. Potential roadblocks include tokens that do not embed claims on any entity, anonymity, and the impossibility of blocking transactions on permissionless blockchains. A compromise on many facets of these problems looks possible, while for others, the authorities may have to prohibit behaviour that some crypto enthusiasts consider non-negotiable.

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