A quick message for institutions that have not yet shifted their focus to the digital assets market: it's a good idea to keep an eye on it, because you will have a long way to go to catch up with those who have already gotten a head start.


What if you were the CEO of a company that has not yet defined whether to enter a market that could generate an additional USD 6 billion in revenue every year? That wouldn't be a bad deal, would it?

Now, forget the example and come back to the real world: financial institutions are still afraid to position themselves on a highly relevant topic that has been consolidating globally. Digital assets, such as cryptocurrencies, are considered to be the future of the financial system. And that is where companies need to be headed, sooner rather than later.

Institutional adoption is an opportunity to diversify business and seek new revenue in a new area. Those who have not yet advanced may be stuck behind two barriers: mistrust of regulatory issues and fear of not having enough quality information to develop the infrastructure needed to operate. 

“What everyone wants right now is to learn and seek knowledge”, says Marcos Viriato, CEO of Parfin (formerly BTG Pactual). For the executive, the characteristics of the new investor will define the next steps for those who need to guarantee their space. “The institution thinks ‘I need to capture this generation at the onset, since they are the ones who will generate income in the next 10-20 years’ and decides to position itself,” he says. 

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Is it going to be easy to exploit this market potential?

Remember the USD 6 billion in the example? This is the amount that consulting firm Oliver Wyman estimates that traditional banks should generate in additional revenue each year if they engage in the cryptocurrency universe – the study was performed in June 2022.

The potential of this market contrasts with the challenges that accompany its growth, as Parfin leaders already highlighted in this article back in 2020. Since then, maturity has really gained momentum, but the obstacles to further development remain practically the same.

That's why joining the world of digital assets will not be an easy task for traditional institutions, since companies native to the ecosystem are already way ahead in understanding the scenario and adapting to quickly react to market movements.

Those on the outside looking in have a long road to travel, and the journey promises to be anything but simple. More than just a paradigm shift, investing in cryptocurrencies is, above all, an exercise in analyzing and understanding the level of disruption in your own company. 

 
Your company had better be ready to innovate!

Many traditional financial market professionals understand that their companies are ready to explore opportunities in cryptocurrencies. The tip for those who want to dive into this model is to think about innovation, without giving up security and compliance. Sticking close to those

who have experience in the matter and know how that can generate confidence is always a smart move as well.

“Know Your Transaction: you have to be aware of the risks of money laundering and even going through deepweb wallets,” warns Viriato, who sees training as a way to facilitate the entry of new assets. “Companies need professionals who understand the business, with a technical level of knowledge, of the processes, and a strong perspective of the regulatory framework”, he says.

Parfin, Latin America's leading player that helps uncomplicate the connection between web3 and traditional financial institutions, has created a secure modular platform for the regulated custody, trading, and management of digital assets. There are 3 models that allow clients to choose the best option: managing the whole process or bridging the gap between clients and the secure trading environment.


And what is the ideal time to enter this market?

Those who follow the ups and downs of cryptocurrencies have seen that Bitcoin has lost market value in recent months. For our experts, the undervaluation of the asset is one more reason for institutions to invest now.

“Investors want profit. And a good client is one who makes money. For those who bought (Bitcoin) a week ago, it has already climbed 20%. Ethereum: up 55% in one month. It is a very important time for entry,” explains Viriato.

For the executive, the choice is clear for those who have lost clients to competitors who are already operating with cryptoassets. “They are going to have to (adopt it), otherwise they'll be forced out of the market,” he concludes. 

 


Failing to participate in the cryptocurrency revolution is not an option.
Are you ready to explore this new universe?