The United Arab Emirates (UAE) and Germany are set to strengthen their positions as market leaders on digital asset regulation, according to new research from London-based Nickel Digital Asset Management (Nickel).
According to the study, 72% of wealth managers, pension funds and other institutional investors expect the regulatory environment for crypto/digital assets to improve and become more constructive over the next two years. This is in line with findings from another recent study by Thomson Reuters which found that 69% of financial professionals believe that regulation will help legitimize the cryptocurrency industry. Nickel authorized research with 200 professional investors from across seven nations who inclusively manage an amount of around $329 billion in assets. The study reveals that around 23% expect no change in the regulatory environment, while just 7% anticipate it will deteriorate. Of those who do anticipate an enhancement in regulation, around 83% believe this will occur over the next 12 months, while 35% expect that it may occur within the next six months.
The research also indicates that a majority (59%) of respondents have been approached by regulators about their cryptocurrency holdings, with 9% having received requests from regulators in multiple jurisdictions. This suggests an increasing interest in what institutions are doing with their crypto investments and may be indicative of a desire to regulate them more effectively. More than half (54%) of those surveyed said they expect to see more clarity around ICOs within two years, while nearly half (45%) said they expect regulators will provide additional clarity on what constitutes a security token (46%).
The majority of professional investors believe that Germany and the UAE will take a huge leap forward as market leaders in the crypto/digital asset space because of their proactive stance in evolving a constructive and sturdy framework for the crypto/digital asset sector. This is according to a survey by Preqin which found that 62% of professional investors expect Germany and the UAE to take a huge leap forward as market leaders in the crypto/digital asset space because of their proactive stance in developing a constructive and robust framework for the sector. However, this is likely to lead to other major countries following their lead as they fear missing out – this is the view of 63% of professional investors surveyed by Preqin.
The survey also found that 25% expect financial regulators will agree on a global framework for cryptocurrencies over the next five years while 18% said it would take 10 years or more and 13% said they did not know either way. In terms of when professional investors believe financial regulators will agree on a global framework for crypto/digital assets, 23% expect it to happen this year, 29% expect it to be in 2023.