Zumo Chief Financial Officer Devina Paul speaks at the 2023 Labour Party Annual Conference on the role of financial inclusion, international impact and consumer protection in creating trusted, compliant and sustainable digital asset solutions.
Crypto is a topic that spans across the political aisle – and one that will require ongoing policymaker communication and engagement to ensure an industry that meets its full potential. Speaking at the 2023 Labour Party Annual Conference, Zumo CFO Devina Paul shared her thoughts about the ever-evolving landscape of cryptocurrency, and what it takes to guarantee a sustainable crypto future.
At Zumo, we believe blockchain can bring about positive change, not just in the financial world, but also in the lives of individuals and society as a whole. Blockchain represents the potential democratisation of finance and financial opportunity, which is why, as an FCA-registered platform, we pursue a deliberate approach that emphasises good governance and a commitment to consumer protection. We are passionate about our sustainability initiatives, products, and partnerships, all of which underscore the positive potential of this transformative technology.
In the aftermath of 2022, when the crypto industry faced significant challenges and shortcomings in custodian governance, consumer protection has taken centre stage. At Zumo, we’ve aimed to embed consumer protection into our very core, reflecting our trusted and compliance-first ethos, and putting us as one of the first firms in the UK to have implemented technical requirements of the incoming cryptoasset financial promotions regime. In the UK, initiatives such as financial promotions regulation are important steps toward standardised information disclosures and a calibrated risk awareness among potential investors.
As we move forward, it will be on the upcoming phases of HM Treasury’s future financial service regulatory regime for cryptoassets to move the conversation on. These regulations will build on what has come before in defining rules and standards for specific activities such as custodying customer funds, cryptoasset trading, and operating a cryptoasset exchange. Such developments are what set the stage for addressing critical consumer protection questions: What is the legal relationship between consumers and custodians? What guarantees exist in insolvency situations? Might there be compensation schemes that come to apply over time to authorised and regulated venues?
While the tangible safety nets are still in the works, our responsibility remains clear: to continue informing consumers of the current risks and to provide the best possible information based on the prevailing situation. As frameworks continue to be built out, the lessons learned from 2022 must drive policy-making to better protect consumers in the future.
Globally, cryptocurrency has proven to be a powerful tool, especially in emerging economies where traditional banking infrastructure may be lacking. In regions like Lebanon and Latin America, crypto has provided a lifeline amidst banking instability and inflation.
In developed countries such as the UK, the focus shifts to the democratisation of wealth and access to new investment opportunities. Zumo recognises the role crypto plays in engaging younger generations and diversifying finance. We support this through our trusted platform, which widens access – and emerging opportunities – to a broader audience.
Overall, the potential for new financial opportunity is immense. This may range all the way from tokenised real estate, offering fractional ownership to the smallest retail investor, to tokenised carbon credits, empowering individuals to reduce and take responsibility for their own personal carbon footprints. These opportunities rely on regulatory frameworks and engagement to become a reality.
Blockchain has, over time, transcended its role in investing, extending into public administration, government aid, and international payments. In this respect, it has provided a lifeline in scenarios from war relief fundraising in Ukraine to refugee aid delivery in the face of capital controls. Most recently, in Argentina, blockchain has been deployed for digital citizen ID, showcasing the technology’s potential for public services.
One of the most critical aspects, perhaps, is the role of blockchain in climate action, an area in which Zumo has been actively involved. Public aid distribution, climate action, and privacy-enhanced access to public services are all part of blockchain’s societal dimension. It is not just about individuals; it is about driving innovation in the global and UK financial services industries and beyond, creating jobs and fostering fintech innovation.
While studies show that illicit activity accounts for a tiny fraction of cryptocurrency transactions, consumer protection remains a concern. Scams and hacks persist, necessitating industry-wide efforts to improve security.
Zumo takes its compliance seriously, with measures such as financial promotions and the travel rule in place to monitor and gate transaction activity meticulously. The transparency and permanence of blockchain make tracking relatively easy, and KYC and KYT ensure most activity is tied to known identities.
However, striking a balance between fighting financial crime and protecting consumer privacy and operational efficiency is crucial. The travel rule, for instance, requires basic information for all transactions, regardless of size, raising questions about data protection and privacy. There is a balance to be struck between oversight and the native efficiency and user-empowerment blockchain payments can bring.
Zumo remains at the forefront of shaping a crypto landscape that is trusted, compliant, and sustainable. From consumer protection to financial inclusion, societal welfare to combating criminal activity, Zumo’s mission is clear: to harness the power of blockchain for good, benefiting individuals and society as a whole. As the crypto industry continues to evolve, Zumo will remain a steadfast partner on this transformative journey.