Monica Long, President of global payment network Ripple, anticipates a significant shift in the cryptocurrency landscape in 2024, with decentralized finance (DeFi) compliance emerging as the industry’s pivotal breakthrough.
In an interview with Cointelegraph, Long emphasized that the speculative hype cycles driven by initial coin offerings (ICOs) and nonfungible tokens (NFTs) would give way to a new era characterized by real-world utility at scale. This shift, she noted, necessitates compliance, usability, and seamless integration with existing systems.
“In 2024, crypto will transcend the speculative hype cycles that have historically characterized the industry’s booms and busts since Bitcoin’s inception. The groundbreaking development of 2024 will be pioneering compliance for decentralized finance,” stated Long.
DeFi represents a departure from traditional centralized financial systems, embracing peer-to-peer finance facilitated by blockchain technology. As of now, the sector’s market capitalization stands at $79.5 billion, according to data from CoinGecko. Regulators worldwide have shown increasing interest in DeFi due to its potential compliance implications with existing financial laws.
The United States has taken proactive measures to enhance oversight of cryptocurrencies and DeFi. New regulations adopted by the Securities and Exchange Commission redefine terms such as “dealer” and “government securities dealer,” mandating more market participants to register with the regulatory body.
Long views DeFi regulation as an area “ripe for innovation this year,” stressing the importance of a compliance-centric mindset within the industry. She noted that applying existing regulations to DeFi use cases, such as decentralized exchange trading, remains a challenge but presents an opportunity for innovation.
Statista projects that the average revenue per user in the DeFi market will reach $1,378 by 2024, with decentralized exchanges (DEXs) expected to drive significant revenue. Platforms like Uniswap, a leading DEX, have generated substantial fee income for liquidity providers, highlighting the sector’s potential.
Long predicts that compliance will be instrumental in driving real utility and mass adoption of cryptocurrencies, emphasizing the need for seamless integration with existing infrastructure and systems. She stressed the importance of understanding the foundational issues and history of the problem to effect transformative changes in how society transacts, manages, tokenizes, and stores value.