{"id":164646,"date":"2023-09-28T22:37:41","date_gmt":"2023-09-28T17:07:41","guid":{"rendered":"https:\/\/dripp.zone\/news\/?p=164646"},"modified":"2023-09-28T22:37:41","modified_gmt":"2023-09-28T17:07:41","slug":"11-things-to-do-when-considering-adding-digital-assets-crypto-news","status":"publish","type":"post","link":"https:\/\/dripp.zone\/news\/11-things-to-do-when-considering-adding-digital-assets-crypto-news\/","title":{"rendered":"11 things to do when considering adding digital assets – Crypto News"},"content":{"rendered":"
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As digital asset options continue to gain attention and acceptance from investors, traditional financial institutions may be considering adding digital assets to their offerings and\/or portfolios. As with any other industry, \u201cstanding still\u201d isn\u2019t an option in the financial sector, and tapping into the potential of digital assets can help TradFi organizations tap into an enthusiastic and growing new customer base. Further, adding digital assets can diversify a traditional portfolio, offering a hedge against market downturns.<\/p>\n

However, any upside achieved from being viewed as an innovative early adopter can quickly be erased if a TradFi institution isn\u2019t thoroughly prepared for the unique opportunities, challenges and risks that come with digital assets. Below, 11 members of Cointelegraph Innovation Circle<\/a> share essential things any TradFi organization must be prepared to do if it\u2019s considering digital assets and why these steps shouldn\u2019t be skipped.<\/p>\n

Focus on robust risk management<\/h2>\n

One essential thing to remember is the need for robust risk management. Given the high volatility and unique regulatory environment of digital assets, TradFi institutions should have comprehensive risk assessment and management strategies in place. This includes understanding the technology behind these assets, their market behavior and potential legal implications. \u2013 Tomer Warschauer Nuni<\/a>, Kryptomon<\/a><\/p>\n

Understand how verification and approval works on the blockchain<\/h2>\n

With the possible exception of real world assets \u2014 like expensive watches, jewelry and other items that are attached to digital ownership tokens to verify ownership and its transfer \u2014 the concept of verification and approval is different with blockchains. In terms of record-keeping, the blockchain itself is the constantly updated and verified record. Every transaction is checked and recorded on the chain. \u2013 Zain Jaffer<\/a>, Zain Ventures<\/a><\/p>\n

Implement thorough cybersecurity protocols<\/h2>\n

Custody is an important factor to consider. The events of the last year prove that \u201cnot your keys, not your coins\u201d is as relevant as ever. Since insured institutional crypto custodians can be costly (and defeat the purpose of the aforementioned mantra), an institution needs to do its due diligence on its own staff and have robust cybersecurity protocols in place, including firewalls, two-factor authentication, multisignature, phishing training and so on. \u2013 Timothy Enneking<\/a>, Digital Capital Management<\/a><\/p>\n

Adapt to crypto norms and principles<\/h2>\n

Digital assets must address \u201ccultural liquidity\u201d for TradFi institutions. It\u2019s essential to understand and follow the crypto community\u2019s principles, practices and expectations. Decentralization and transparency underpin digital asset markets. To maximize digital asset potential, institutions must adapt to these norms, which may differ greatly from those of traditional finance. \u2013 Arvin Khamseh<\/a>, SOLDOUT NFTs<\/a><\/p>\n

Create accessible educational content<\/h2>\n

Education is the name of the game when it comes to digital assets. Much of a TradFi institution\u2019s audience will likely be skeptical of or unfamiliar with digital assets like cryptocurrency. Beginner-friendly promotions, educational blogs, onsite explainers and videos couched in language the audience understands can make a world of difference. \u2013 Sheraz Ahmed<\/a>, STORM Partners<\/a><\/p>\n

Choose partners and technology carefully<\/h2>\n

For traditional businesses seeking to extend their services into the digital economy, it\u2019s worth considering that, unlike people, not all entry points to the ecosystem are created equal. First-time retailers want a guide who knows the terrain and has time-tested experience delivering trusted solutions. As banks and crypto continue to co-evolve, partners and technology should be chosen carefully. \u2013 Oleksandr Lutskevych<\/a>, CEX.IO<\/a><\/p>\n

Keep capital preservation top of mind<\/h2>\n

The most important thing traditional finance institutions should keep in mind when approaching digital assets is the concept of capital preservation, or ensuring that there are no losses resulting from avoidable situations. Even if a manager wants to invest in risky assets like crypto, they should do it with profits that were generated earlier, not with original capital. \u2013 Abhishek Singh<\/a>, Acknoledger<\/a><\/p>\n

Clearly identify the asset class(es) you\u2019re working with<\/h2>\n

Institutions should be steadfast in clearly identifying the asset classes they are working with, as \u201cdigital asset\u201d can be vague. As various digital assets shape this emerging market, it will be paramount to educate your audience as well. There are many digital asset sectors that need to be understood, such as real world assets, cryptocurrencies, tokens, nonfungible tokens and many more. \u2013 Megan Nyvold<\/a>, BingX<\/a><\/p>\n

Be prepared for volatility<\/h2>\n

Digital assets, especially cryptocurrencies, are known for their price volatility. TradFi institutions interested in adding digital assets to their offerings should be prepared for the inherent risks associated with this volatility, which can lead to significant fluctuations in asset values. Rigorous risk management practices are essential. \u2013 Anthony Georgiades<\/a>, Pastel Network<\/a><\/p>\n

Consider hybrid portfolios<\/h2>\n

TradFi institutions should consider hybrid portfolios. When integrating digital assets, they should blend traditional and emerging holdings. This caters to evolving client preferences, requires rigorous risk assessment and compliance and leverages institutional expertise. This approach empowers institutions to tap into the potential of digital assets while meeting modern investment demands. \u2013 Vinita Rathi<\/a>, Systango<\/a><\/p>\n

Prioritize compliance<\/h2>\n

Web3 regulations around the world are evolving far more rapidly than their counterparts in traditional finance. TradFi institutions should work with blockchain compliance experts to not just stay on top of current legal requirements, but also to prepare for any upcoming changes. \u2013 Wolfgang R\u00fcckerl<\/a>, ENT Technologies AG<\/a><\/p>\n

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This article was published through Cointelegraph Innovation Circle, a vetted organization of senior executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. Opinions expressed do not necessarily reflect those of Cointelegraph.<\/em><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

As digital asset options continue to gain attention and acceptance from investors, traditional financial institutions may be considering adding digital assets to their offerings and\/or portfolios. As with any other industry, \u201cstanding still\u201d isn\u2019t an option in the financial sector, and tapping into the potential of digital assets can help TradFi organizations tap into an […]<\/p>\n","protected":false},"author":2,"featured_media":164647,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[235,203,210,234,231,232,237,238,236,233],"class_list":["post-164646","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blockchain","tag-bitcoin","tag-crypto-currency","tag-elon-musk","tag-ethereum","tag-hyperledger","tag-ibm","tag-mining","tag-nodes","tag-spacex","tag-tesla"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/164646","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=164646"}],"version-history":[{"count":2,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/164646\/revisions"}],"predecessor-version":[{"id":164649,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/164646\/revisions\/164649"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/164647"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=164646"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=164646"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=164646"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}