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Crypto asset management leader highlights need for US regulation

Jason Albanese, who heads a leading crypto asset management firm, has urged that regulatory guidelines be established to alleviate the vulnerability of the new technology to fraud and other deceptive practices.
Jason Albanese
Jason Albanese is general partner and CEO of Lightning Capital.

Jason Albanese, general partner and CEO of Lightning Capital, called crypto currency “a beautiful technology” that is the leading driver of Web 3.0—proclaimed as the next iteration of the internet—but said the still nascent technology remains highly complex and in need of regulation, in his appearance on the “Herbert Half Hour,” part of the University of Miami Patti and Allan Herbert Business School lecture series.

“Crypto is starting to trickle more and more into the mainstream, with financial institutions starting to interact and more and more corporations looking to integrate the technology, but the U.S. is way behind in terms of regulation—and the lack of the regulation allows for fraud, deceptive practices, and other risks,” said Albanese, responding to a question from Dean John Quelch during the Tuesday event.

Albanese called on the federal government to generate a coordinated approach across the multiple regulatory entities that will be affected by the new technology.

“If they don’t approach it in an aligned manner and get educated together, it’s going to complicate and slow down effective regulations,” cautioned Albanese, adding that he is in communication with regulators in Washington who are “deep diving on the space.”  

Albanese pointed out that there are currently some 18,000 crypto currencies and 450 crypto exchanges worldwide.

He said that crypto remains “a widely misunderstood form of digital currency” and noted that many of the currencies are designed as software applications and are not intended to become currencies such as the dollar or the Chinese yuan.

Albanese, a specialist in digital transformation technology, reported that a powerful crypto lobby has emerged that is pressuring all levels of government.   

“Crypto is a decentralized technology, so it moves toward whoever and wherever it gets a favorable response and away from where it doesn’t,” he explained.

With the federal government lagging, he said that lobbyists have moved to state governments—such as those in Florida, Wyoming, North Carolina, Illinois, and others—that are “crypto friendly.”

Even for investors like himself, the crypto ecosystem can seem complicated, he admitted. “And for good reason, there are a lot of moving parts and lots of evolution happening on a quarterly basis—even for those of us in the space, it’s changing beneath our feet,” he said.

However, the ultimate “beauty” of the technology, he stated, lies in the fact that crypto may remove a lot of the complex elements of traditional investing.

“You don’t need brokerage houses, don’t need Wall Street, and you as the investor will be in the middle,” he said.

The CEO noted that many of the original Libertarian-minded people, who founded what has become the crypto movement back in 2010, are frustrated that increasingly corporate interests have stepped in to invest in the new technology.

“It’s ironic that bitcoin was designed to defend against sovereign currencies and the perception that there is too much dilution, and that the government mismanages them, and that if you want to be safe with the storage of wealth you need something that can behave like gold except better,” he said.

Albanese said he believed that the U.S. would adopt a central bank digital currency and that the decision would remove political pressure.

“If it does though, that still doesn’t mean there won’t be some form of competition from crypto currency such as bitcoin,” he said. “A lot of it comes down to an investor’s preference for a sovereign-banked currency versus one that’s totally decentralized.”

For Albanese, crypto represents the driving force behind what he believes will be the third iteration of the internet, which has transpired over the past 20 years, following the launch of e-commerce as the first and Amazon’s rise to become “master of the e-commerce universe” as the second.   

In Web 3.0, there will be a metaverse, a virtual reality world, and decentralized control of people’s information, he maintained.

“Your information and your privacy become the product—and you can control and profit from it, instead of Facebook,” he explained. “Web 3.0 is going to be a bit of a game changer, with astounding new careers and opportunities.”