Decentralization 'absolutely essential' in building crypto capital markets
If crypto capital markets have a chance of becoming an institutional reality, decentralization will be one of the key aspects according to one industry insider.
Capital markets bring suppliers and those in need of capital together to initiate supposedly efficient transactions. Investments or savings are often funneled between suppliers of funds like banks and those who need capital like businesses, governments and individuals.
Co-founder of crypto financial service provider VegaX Holdings Sang Lee told Cointelegraph today that incumbent financial institutions have simply been left behind by the rapid pace of developments in the crypto industry.
VegaX Holdings is building a suite of crypto-based financial services. Its VegaX decentralized finance (DeFi) platform allows staking while its Konstellation ecosystem is a DeFi ecosystem based on Cosmos (ATOM).
Lee believes decentralization is likely the most important thing that will help crypto enter capital markets. Decentralization involves removing costly intermediaries in decision making and in executing transactions.
Lee decried the current state of centralized payments platforms in saying “You can’t send a wire on the weekend which is atrocious. And the amount of times a stock changes hands when you buy it is atrocious.” He added:
Intermediaries tend to increase the amount of fees spent and the amount of time required to make an investment, thereby potentially reducing potential returns. Removing them through decentralization may be a viable way to make markets more efficient and help investors earn higher returns.
Lee also believes stablecoins will play an essential role in expanding capital markets in crypto. To him, stablecoins have the strongest potential to leapfrog
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