As part of a World Blockchain Forum panel on the state of crypto, Iqbal Gandham – eToro’s UK boss and chairman of the trade group CryptoUK – noted a shift in attitude towards crypto among MPs and regulators.
“This year is all about regulation,” Gandham said. “We all know that at the end of September/start of October, the crypto asset taskforce will publish its report for regulation in the UK – which I think will be a really positive movement.”
Expanding on his assessment, he added: “There are now MPs having open conversations about raising questions in parliament about Blockchain, about Cryptos. So I think sentiment has changed; the Bank of England sentiment at the start of the year was ‘it’s negative, it’s was money laundering, it’s bad, it’s poisonous… and now the sentiment is ‘we need to have a look at this…”
However, Gandham said that the industry has a long way to go with regards to educating decision makers about the benefits of Blockchain technology.
“We speak a completely different language,” he observed.
“I think industry and government really needs to understand these things because Blockchain is going to help them, solve some of their problems.
“I think the venn diagram between individuals who understand the blockchain and the ones who have a problem where blockchain can be used, the overlap is really small. I think we need to increase the overlap…
“The government has hundreds of millions that it wants to use to help solve some of the problems that it has with Supply chain management or logistics etc, etc,” Gandham added. “The same problems that we all think that blockchain is going to solve – so we need to educate them.”
“Unfortunately, we’re really bad at that,” he concluded.
“When we talk about blockchain or crypto, we take it to a level where before we know it we’re talking about Lightning Networks and Atomic Swaps; while people are still saying, ‘can you just explain immutable databases to us?”
In terms of mass adoption of cryptocurrencies, Gandham sees similar issues with educating the general public about their benefits and problems.
“I think it’s important that we do educate customers, but there are different levels of education. For the mass market, if we start discussing cryptography or blockchain or smart contracts, etc… it’s a wasted conversation.”
Citing the progression of interest in crypto seen via eToro through 2017, he observed that “In Q1 we had people who understood blockchain, people who understood bitcoin.”
“In Q2,” he continued, “the audience morphed slightly, so they were individuals who didn’t work in the blockchain industry, but who were developers, system engineers, technical guys. In Q3 it shifted again, it was customers who were in FinTech… Q4 was everybody.
“You could tell that,” he asserted, “by the search terms being used to find our website; so in Q1/Q2 it was ‘BTCX’, so they were looking for a Bitcoin exchange. In Q4: where can I buy Bitcoin?
“So the search queries were changing as it went mass-market”
In his position as the figurehead of CryptoUK, Gandham has previously said that “The benefits of regulation are clear.”
He has also stated his belief that rules “would need to focus on those crypto organisations that interact with consumers – the ‘on-’ and ‘off-’ ramps between fiat and cryptocurrencies. You can look at Japan to see how this might work.”
Such legislation, however, may not directly effect eToro in the same way as it would some cryptocurrency exchanges, as its Contract For Difference model for crypto trading does not currently afford investors ownership of coins in a way that allows them to remove them from the site to external or cold wallets, or spend them directly. While it acts much more like a tradition brokerage in its crypto dealings, unlike brokers of shares and other commodities, eToro does not charge for holding the cryptocurrency of those that invest through it.