Crypto firms still working with central bank despite recession – The Irish Times

The number of inquiries to the Central Bank of Ireland’s Innovation Hub fell by 48 per cent in 2022 despite an increase in the number of already regulated firms engaging with the set-up. The hub is a forum for fintechs and other companies to discuss new technologies with the central bank, alert them to any regulatory risks associated with them and then iron out potential problems.

Published on Tuesday, an update on the hub’s activities for the 2022 calendar year reveals that a “significant number” (33%) of requests came from crypto and blockchain companies last year, despite a broad decline in the sector last year.

The proportion of questions from this sector decreased from 39 percent in 2021 when crypto asset prices and interest in blockchain reached record highs.

The Central Bank noted an increase in the number of inquiries from “large, established crypto-asset service providers” in 2022. It said that while many of the inquiries were focused on the Virtual Asset Service Provider (VASP) registration scheme, some firms were considering other authorizations for their Irish operations such as e- money licenses.

Although not named in the report, the regulator authorized four crypto companies last year under the VASP regime, including Irish-registered firms owned by digital asset exchanges Coinbase and Gemini.

The authorization brings the companies under the Irish regulator’s supervision for the sole purpose of combating money laundering and criminal financing.

Speaking to The Irish Times ahead of the report’s publication, Sharon Donnery, the central bank’s deputy head of financial regulation, said the well-publicised decline in crypto asset prices last year did not manifest itself in a noticeable drop in industry engagement.

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“I think the real problem with crypto, especially around [the collapse of] FTX and so on crystallized more towards the end of last year and early this year, she said.

“So we’re seeing a lot of debate around crypto and where it’s going and where it’s ultimately going to end. In terms of the 2022 report. I don’t think we’ve seen that kind of commonality yet in terms of the decline in interest levels or anything like that.”

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Overall, she said there remains “a high level of interest” in the Innovation Hub despite the drop in overall enquiries.

“What I would say is that we are in a very different monetary policy and interest rate environment, and as we know from other discussions, I think the feeling from talking to firms is that there are some changes in investment and investor appetite. also for this kind of companies,” she said. “We will look for that this year”.