Cryptocurrencies will stay as an asset class, say experts

PHOTO

UAE - The governments around the world are increasingly moving towards regulating the initial coin offerings (ICOs) and the digital currencies will stay as an asset class, industry players said at a forum in Dubai on Sunday.

"All the central banks are working on regulations. ICOs have to be regulated. I think digital currency is necessary to digitalise business processes. Therefore, most of the central banks such as Norway and Estonia are working on regulations," said Oliver Bussmann, founder and managing partner, Bussmann Advisory.

He said cryptocurrencies as an asset class will stay because there is no correlation with other asset classes.

"If you add crypto assets into your portfolio, your risk return profile improves. I see traditional asset management businesses setting this as a new asset class from a trading management portfolio perspective. This will professionalise going forward," Bussmann said during an interview with Khaleej Times on the sidelines of Unlock Blockchain Forum in Dubai on Sunday.

There are lot of uncertainties surrounding the cryptocurrencies as US billionaire Warren Buffet has predicted that the digital currencies will not survive. While South Korea earlier announced plan to ban cryptocurrency trading in the country.

Dr Abdalla Kablan, co-founder, Wyzer, a Malta-based artificial intelligence firm, believes that consumers will start looking at higher qualities currencies which are out there in the market.

"I see countries moving towards regulating digital currencies. Malta is moving towards regulating ICOs by launching a Virtual Currency Act to be announced in Dubai during the forum. The big customers will move towards those markets which will regulate ICOs as they don't want to take risk by operating in an unregulated market. So, I see 2018 will be a year of maturity," Kablan said in an interview with this newspaper.

He revealed that Malta will be one of the world's first regulators that is going to regulate this ICO market."Regulation side is also very important because if a respected regulator issues a licence to an ICO, it means that ICO has passed all the vetting. At the moment, it is very risky to invest in ICO," he concluded.