Cybersecurity Remains A Key Obstacle To Crypto Adoption

Cybersecurity remains an obstacle to wider crypto adoption
Even as regulators, major financial institutions, and investors of all sizes continue to pivot and move toward embracing cryptoassets and crypto payments there is a major obstacle to wider adoption that has yet to be effectively addressed; cybersecurity concerns. While it is true that every application contains within it some level of cybersecurity risk – including that of loss – crypto and other on-chain assets remain uniquely exposed to these factors, at least as far as public opinion is concerned.
According to research by the Pew Center 63% of survey respondents indicates that they do not think cryptocurrenices are safe to use, which continues to be reflected in the percentage of surveyed adults that use crypto for transactional purposes. The 17% of respondents that report having used crypto for transactional purposes has remained unchanged since 2021, even as almost every aspect of the cryptoasset landscape has continued to expand and further mature. Cyber risks are clearly not the only reason behind these statistics as volatility, headline risks, and political tensions all contribute to the opinions of investors with regards to crypto, but it is not one that can be ignored.
With powerful regulators such as the OCC and FDIC issuing pronouncements and policies that will make it simpler, cheaper, and easier for TradFi institutions to get into crypto, effective cyber policies to protect these assets will become more important going forward. Let’s take a look at a few things that investors – of all sizes – should keep in mind.
Borrow And Update Best Practices
The banking and payment industries are among the most highly regulated and supervised markets in the world, and the obvious reason for this is that in order to maintain confidence in the banking system – and markets at large – the trust in these operations must be absolute. Following years of patchwork enforcement efforts, including an anti-crypto regime at the SEC, there finally seems to be progress on effective, common-sense, and actionable regulation for crypto payments. The European Union has enacted the MiCA regulation, which while not a perfect regulatory framework does at least provide a starting point for entrepreneurs and regulators to work from.
In the United States there are multiple bills that have been introduced, with the STABLE Act receiving committee approval to move forward for subsequent votes. By mandating audits, compliance practices on par with existing TradFi policies, and requiring communications related to any issues in real-time as they arise, the regulators and industry are taking proactive steps to establish much-needed frameworks for operation.