GDF Member Survey 2021
What will 2021 hold for Digital Assets?
Considering how unprecedented 2020 was, we approach predictions for 2021 with some hesitation. Whether global events such as the pandemic and the new U.S. administration, or the sheer pace of developments within the sector, remaining agile in response to the industry’s needs has been key to GDF’s work.
As a community-led association, the GDF Member Survey asked the community for their top priorities and challenges this year. We compared this to current predictions of what 2021 would hold for the digital asset industry.
The GDF Member Survey 2021
88% of respondents agreed that the GDF Code of Conduct is relevant to the industry’s needs. In line with current trends, the top priorities for further code development are DeFi, Stablecoins, Digital Custody, Interoperability, and CBDCs.
The top challenges for the industry were regulatory clarity; the readiness of financial institutions; blockchain interoperability; digital asset firms’ access to banking facilities; and digital identity.
The top regulatory concerns were unaligned cross-border regulatory guidance; lack of clarity on the regulatory perimeter, the need for all market actors to be regulated so as to address commercial challenges to partnerships; firms’ ability to meet regulators’ requirements, and limited engagement by regulators with industry.
The top GDF priorities show the importance of regulator and policy maker outreach, with the lack of regulatory clarity ranking as the top challenge for the industry. GDF has run and will continue to scale the Regulator’s Forum, convening over 30 regulators and policy makers to discuss the development of digital asset frameworks. We will also continue to engage with regulators and policy makers through events and thought leadership.
2021 Predictions
The sector predictions for 2021 from leading industry voices:
Many of these are in line with the progress within the industry that we had already seen throughout 2020. Central Bank Digital Currencies (CBDC) and the regulatory focus on DeFi, for example, are not new subjects for this year, but rather a continuation of trends. DeFi (or P2P payments) dominated the FATF report ahead of the V20 Summit in autumn 2020. The Bank of International Settlements identified over 32 CBDC projects globally in a report published in August 2020.
Some of these predictions overlap with our member’s priorities. The Member Survey similarly listed CBDCs and Self-Hosted Wallets as priority areas. Whether the regulation of exchanges (VASPs) or mitigating security breaches, the community is unified on the need to provide clarity on the DeFi space. GDF Members’ focus on stablecoins may be linked to the increase of regulatory focus on public digital coins which was initiated by Diem (then Libra)’s launch announcement.
There are evident tensions, too: where influencers have pointed to 2021 as ‘the year of the crypto-banking convergence’, our members highlight financial institutions’ readiness and blockchain interoperability as key challenges for the industry. Though progress may be made in 2021, the success of crypto-banking convergence relies on these challenges being addressed.
In 2021, GDF will address these challenges by setting up working groups in line with member’s priority areas for code development. Whether through outreach and advocacy, roundtables and events, or thought leadership, we will continue to engage with regulators to support an environment in which digital finance can thrive.
You can read more in our 2020 Annual Report here.
