The world is far from mass crypto adoption: Vujinovic of OGroup

Decentralized finance (DeFi) still has major innovations to make before it can overtake traditional finance, according to Maja Vujinovic, founder and CEO of OGroup.

Mass adoption will require evaluation of the blockchain technology itself, including infrastructure, protocols and applications that make it easier and faster to use. Consumer protection and emerging markets will also be key to the asset’s success.

“If you look at what’s happened in crypto recently, the smart contracts themselves have held up very well in terms of accountability and technology, but it’s the kind of CeFi platforms, the Celsius and Voyagers of the world, that have been mismanaged,” she told Discard on the sidelines of StartmeupHK Festival 2022, held from September 5 to September 10 in Hong Kong.

Organized by Invest Hong Kong (InvestHK), the week-long event, which Discard was a media partner, attracted over 20,000 participants from more than 100 countries and territories. Vujinovic, who was among more than 500 speakers, spoke on a panel about digital currencies, DeFi, tokenization and asset fractionation.

CeFi, short for centralized finance, uses a centralized exchange where crypto investors can trade and store cryptocurrencies. However, users do not have full control over assets held in an exchange and risk losing them.

Following the collapse of the Terra-LUNA ecosystem in May, cryptolenders Voyager and Celsius went bankrupt, leaving their users unable to withdraw their funds.

“There needs to be regulation and stronger consumer protection because a lot of people get into this without knowing anything, and at the end it’s the retail industry that burns,” Vujinovic said.

Better consumer protections will also help the development of digital assets in emerging markets, according to Vujinovic, who says she built her career working within these regions. She added that there is a larger adoption pool in countries where people may not trust their previous and current banking systems.

“They’re relying more and more on saying I’m going to manage my money, I want access to my money, I want access to things, I want to be rewarded for what I do, I want to own what I do.”

At the same time, Vujinovic said that in emerging markets such as El Salvador, ordinary people have not benefited enough from increased adoption due to volatility.

“There has to be a mechanism of stable coins, for example, which I’ve seen work very well in these markets as a reserve,” she said. “Governments want either CBDCs or some other form of traceability through digital currencies, I think that’s going to be a big innovation.”

Meanwhile, Vujinovic says education will help adoption and inclusion.

“Crypto, as it is, is very difficult to use, it’s difficult to understand how to sell custody, how to transfer,” she said. “I think more education needs to be done about what people can do when they have that crypto.”