Money & Banking

‘Facebook’s Libra will lead to greater use of digital assets’

Bloomberg September 20 | Updated on September 21, 2019 Published on September 20, 2019

Arthur Hayes, head of one of the world’s most popular cryptocurrency exchanges, says Facebook’s controversial Libra coin will help lead to great use of digital assets.

“Digital finance is going to end up affecting everything from traditional equities, bond and currency trading, to the way payments are processed and recorded,” said Hayes, the chief executive of BitMex.

Hayes, who co-founded the exchange, noted that most markets currently open and close, remain shut on weekends, and even have lunch breaks, whereas crypto trades 24 hours a day, seven days a week.

“Some of the practices in our market are going to be mimicked in traditional trading,” said Hayes. “All these things are going to seep into the traditional way stocks, bonds and forex are traded.”

Hayes, who worked at Deutsche Bank and Citigroup before founding BitMEX, said one major reason people resist crypto is that they are used to feeling something physical in their hands, or speaking to people about moving around money, whereas digital currencies don’t have that.

“All these things about being somewhere and trading something and physically reconciling records is all going to go out the window,” he said.

Once you get away from that and understand that everything will be digital in the next 10 years, you realise that Bitcoin is not such a strange idea.

The discussion did not address the investigation into BitMEX by the US Commodity Futures Trading Commission, which Bloomberg reported in July. Nor did it get into recent ouflows from the exchange, or staffing issues such as the exit of Chief Operating Officer Angelina Kwan after she’d been at the company less than a year.

Hayes did say crypto is definitely not a threat to sovereign currencies, and actually would make things better for governments because they can track things better in their native currencies, which they can’t do with physical cash.

Facebook has been confronted with push back from politicians and regulators in the US to France to Germany on its plan to launch a centeralised coin by the first half of next year.

He also touted the effects that crypto derivatives, BitMEX’s specialty, have had in price discovery, creation of fair and efficient markets, and helping keep prices in sync across major exchanges.

“Bitcoin will be at $20,000 in a year, and at $100,000 in three years,” Hayes predicted, in line with comments he has made previously.

Published on September 20, 2019
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