The chief executive of cryptocurrency exchange EDX, Jamil Nazarali, stated in an interview Tuesday that Bitcoin has strong potential to evolve into a worldwide reserve asset on par with gold.
Nazarali cited growing faith in Bitcoin’s value and its mathematically fixed supply cap as key advantages that could enable BTC to achieve reserve currency status down the line.
Comparing Bitcoin’s Utility to Gold
When comparing Bitcoin to gold, Nazarali emphasized Bitcoin’s superior ease of transfer as giving it more modern functionality than the physical commodity.
Gold must be physically moved or custodied to settle large transactions, while Bitcoin can be seamlessly sent digitally across borders at the click of a button.
If more nations and central banks accumulate BTC reserves, Nazarali believes Bitcoin could surpass gold as the predominant global reserve asset in the future due to these advantages.
Cautioning on Lack of DeFi Oversight
Discussing decentralized finance (DeFi), Nazarali warned that the permissionless ecosystem lacks oversight and transparency. He cautioned that unchecked criminal activity on DeFi platforms is a growing issue.
Per Nazarali, the autonomous nature of DeFi concentrates risk and could lead to catastrophic failures without prudent governance. He believes some central regulation may be necessary to ensure DeFi’s sustainability and mass adoption.
Calls for Clear Crypto Regulation
On the topic of cryptocurrency regulation, the EDX CEO emphasized the need for clear rules so businesses can operate efficiently.
Nazarali stated that the current lack of regulatory clarity in the U.S. inhibits innovation and harms firms playing by the rules. Establishing guardrails would support ethical companies and prevent bad actors from exploiting regulatory gaps.
As crypto permeates finance, Nazarali believes thoughtful policymaking and self-governance mechanisms are necessary to achieve stability and trust. In time, this could pave the way for Bitcoin becoming a globally relied upon reserve asset.