Moving Forward: Institutional Adoption of Crypto and Blockchain

8 min readNov 1, 2022

Institutional crypto adoption will be one of the topics discussed at one of the world’s most impactful events in the digital asset space — Singapore Fintech Festival.

We are witnessing the early stages of crypto and of its global adoption.

This statement may raise some eyebrows, as it is likely that even our parents and grandparents have heard of blockchain, bitcoin, and non-fungible tokens (NFTs) these days. Despite this and the growing agreement on the fundamental importance and long-term development of the industry, global adoption of digital currencies and the corresponding technologies is still in its infancy.

Retail investors increasingly explore new platforms and services catering to different needs and tastes, providing numerous tokens and coins, offering diversified investment tools and options. At the same time, institutions too are adapting to take more proactive stances towards crypto and blockchain technology. Brokerage companies and banks of the central, investment, and commercial varieties all are also increasingly leveraging crypto across their lines of business based on opportunity and demand from clients. From payments to smart contracts and central bank digital currencies, institutions are increasingly giving credence to the foundations of the digital asset industry and its place as part of the regulated financial ecosystem.

In the U.S., Wall Street is ramping up crypto offerings in wealth management. Goldman Sachs, the leading global investment banking, securities, and investment management firm traded its first over-the-counter Bitcoin options this March, while BlackRock, one of the world’s leading providers of investment, advisory, and risk management solutions, recently joined a $400m funding round in stablecoin issuer Circle.

At a national level, China recently completed a 40-day trial using central bank digital currencies (CBDC) to settle trades with Hong Kong, Thailand, and the United Arab Emirates via a special “bridge” arrangement. The test ran on the four sides of the mBridge platform, a multi-country payment project launched by the Hong Kong Monetary Authority, Bank of Thailand, and the Bank for International Settlement Innovation Hub Hong Kong Centre in 2019.

Why is this happening?

There are three main reasons why institutions are opting in, even throughout the crypto winter:

Higher yields

Interest rates on cryptocurrencies, even for lower-risk, fixed-rate investment products, are on average higher than the ones offered by the traditional financial market.

Client demand

As the industry grows, asset managers and financial firms are facing increasing demand from clients to include digital assets in their wealth portfolios.

Keeping up with innovation

Bitcoin has been growing at an annual rate of 113%, while the internet’s growth at that time was at 63% (Coinshares). The longer that digital assets persist and iterate as relevant investment vehicles, the easier it is for individuals to trust that they are a legitimate asset class and not just a fad.

As the ecosystem matures, more credibility and confidence are sweeping through financial institutions that are traditionally also less risk-averse to industry developments or volatility. Volatility, meaning the rate at which prices increase or decrease over a particular period, is in fact a common phenomenon in the financial sector and is largely caused by factors of uncertainty.

This is why regulation is key.

The Link Between Institutional Adoption and Regulations

In the last two years, decentralized finance (DeFi) has been dented somewhat by a series of hacks and exploits that have undermined the trust in the development and the long-term, global adoption of crypto. This is one of the key reasons why regulators worldwide are grappling with protecting the safety and privacy of crypto users and their assets while promoting innovation and technological advancement.

Most recently, Singapore, a key market for crypto and Web3 companies, proposed a tightening of regulations of digital assets in an effort to counterbalance the crypto business blowups that led to significant financial losses for retail customers, and thus the need to protect this category of investors. The Monetary Authority of Singapore recently proposed to ban retail investors from borrowing to fund cryptocurrency purchases, and stopping companies from using tokens deposited by retail investors for lending or staking to generate yields.

As our CEO Michael Wu commented for Bloomberg, the latest proposed steps “could affect trading volumes and revenues of crypto exchanges and lenders who have large retail exposure,” said Michael Wu, even though the rules “will be good in the long term.”

On the other hand, some markets are looking to strengthen their position in the space. During the Hong Kong Fintech Week held in late October, Hong Kong’s city government announced it will start a consultation on legalizing crypto trading by retail investors. This follows the city’s efforts to become a hub for digital assets and restore the city’s credentials as a financial center after the strains and economic slowdown driven by the Covid-19 pandemic.

Regardless of the direction taken by regulators, it is clear that these responses to the rising adoption of crypto assets are pointing at a growing interconnectedness of crypto with the mainstream financial system. And since volatility remains a concern for traditional and digital investors and markets, it is not only attributable to speculation and sentiment but also to regulatory developments. As the hype related to the speculative nature of crypto dies down, regulatory parameters around crypto will contribute to stabilizing prices also in crypto markets.

Amber Group’s Role in Institutional Adoption

Like regulators, Amber Group aims to foster innovation while creating a safe, secure environment for the assets of its clients looking for the right partner and platform to use for their trading and investments in digital assets.

Our Commitment to Compliance and Security

In order to provide high-quality, secure investment tools and services, Amber Group has pledged to commit to the highest standards of asset security, user privacy, asset insurance, and regulatory compliance to ensure sustainable, long-term growth of clients’ wealth.

What will this commitment look like in practice?

Independent certification of top-notch security standards

Very recently, Amber Group completed the external attestation of its security controls and processes according to Service Organization Control (SOC) 2 Type II. This was independently carried out by Deloitte and involved a thorough review and approval of Amber Group’s security controls. The Type II certification followed the successful SOC 2 Type I attestation attained earlier in 2022.

Having completed SOC 2 compliance, Amber Group now ranks among a limited number of companies which have established robust policies and protocols in accordance with the AICPA Trust Services Criteria relevant to all five principles — Security, Availability, Confidentiality, Processing Integrity, and Privacy — in the scope of the SOC 2 attestation.

Cybersecurity to protect systems, networks, and programs from digital attacks

Amber Group also voluntarily sought to test the strength of its cybersecurity program through an independent assessment, guided by the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) Cybersecurity Framework.

Testing Amber Group’s cyber maturity against the NIST Cybersecurity Framework — a well-established management standard that is recognized as best-in-class in the security industry — the company achieved Tier 4, the highest NIST Cybersecurity Framework, and a strong result that is testament to the company’s commitment to integrate a culture of cybersecurity awareness into its business operations.

Industry-leading asset custody

WhaleFin works with world-leading partners like Fireblocks to provide institutional-grade custody and protection for the assets of its users.

Up to $100 million insurance coverage on digital asset wallets

Amber Group, the company behind the WhaleFin app, has comprehensive insurance coverage protecting its digital asset wallets, including direct insurance policy indirect coverage, and insurance-backed Theft Protection, which are subject to the terms, conditions, and exclusions under the relevant insurance policies and agreements.

Discussing Institutional Adoption at Singapore Fintech Festival

Singapore FinTech Festival is the world’s most impactful FinTech festival and a knowledge platform for the global FinTech community. This year, it will be held in Singapore from November 2 to November 4, 2022.

Our Managing Partner Annabelle Huang will be speaking at the event about institutional crypto adoption. The details for the talk are below:

Wednesday, 2 November, 3:00 pm — 5:00 pm SGT
Venue: Singapore Expo, Hall 2
Moderator: Amanda Wick, Association for Women In Cryptocurrency

Panelists:

Annabelle Huang, Managing Partner, Amber Group
Samar Sen, Head of APAC, Talos
Yusho Liu, Co-founder & CEO, Coinhako
Darius Sit, Founder & Chief Investment Officer, QCP Capital

More on the speakers here.

WhaleFin, powered by Amber Group, is an all-in-one digital asset platform designed to empower you to diversify, manage, and grow your wealth digitally in a secure manner. On WhaleFin, you can buy, sell, trade, and invest in crypto with ease.

Download the app here.

Amber Group is a leading digital asset platform operating globally with a presence in Asia, Europe, and the Americas. We provide a full range of digital asset services spanning investing, financing, trading, and spending, backed by some of the best investors across the world such as Sequoia Capital, Temasek, and Tiger Global Management.

For more on WhaleFin’s announcements and news, please follow us on social media.

For support and assistance, please contact us at service@whalefin.com

This material is strictly for information purposes only, and does not constitute or shall not be considered as, an offer, solicitation, or recommendation, to deal in any products. The information provided is not intended to provide a sufficient basis on which to make an investment decision. It is intended only to provide observations and views of certain personnel and has not been reviewed by any regulators elsewhere, which may be different from, or inconsistent with, the observations and views of Amber Group.

Amber Group assumes no obligation to update or otherwise revise this material, Amber Group does not represent or warrant its accuracy or completeness and is not responsible for losses or damages arising out of errors, omissions or changes or from the use of information presented in this material. Contents in any third-party sources (if any) in this material are completely beyond the control of Amber Group. As such, Amber Group shall not be held responsible for the accuracy, completeness and legality of the contents of such third-party contents. Any reference to third-party contents does not imply an endorsement, representation or warranty by Amber Group. No liability will be accepted for any loss or damage arising from or in reliance upon the contents of this material or these independent third-party contents provided here.

This material is not directed to or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subject Amber Group to any registration or licensing requirement within such jurisdiction.

This material does not purport to contain all of the information that an interested party may desire and, in fact, provides only a limited view. Any headings are for the convenience of reference only and shall not be deemed to modify or influence the interpretation of the information contained.