It happened in 1971 but went unnoticed for several years: an article in Electronic News took note of the revolution that the manufacturing of microchips was generating in the San Francisco Bay and the domino effect of innovations that it would have. Thus the name Silicon Valley emerged and although silicon (the raw material for chips) would later take a backseat, the name was forever associated with the technological avant-garde.
More than half a century later, cryptocurrencies are at the center of the innovation scene and many wonder if the future of money will be written everywhere or if a phenomenon similar to that of Silicon Valley will be repeated.
In a delocalized and interconnected world, the former would seem to be the most reasonable. However, more or less friendly regulations can make a difference. In fact, a recent CoinDesk article recalled that in the face of the actions of the US authorities against Coinbase, a strong player in the ecosystem, which has since called for “clear rules” and alleges that “hostile” regulations could drive innovation and the jobs generated by cryptocurrencies outside the United States, a Hong Kong legislator came out to tempt the firm to move all of its operations there.
Southeast Asia also has Singapore, which, together with Hong Kong, concentrates 35% of global jobs in the sector, according to a report by the cryptographic intelligence firm K33. The country, home to firms such as Binance and Crypto.com, already registers a good part of the planet’s crypto pulse and has a high percentage of venture capital funds investing in companies in the industry.
For its part, the United Arab Emirates emerges on the crypto map with two pieces of information that position it very well: the tax issue and adoption. In the first case, it is a total exemption (0%), and in the second, the fact that two-thirds of its inhabitants are interested in cryptocurrencies stands out, Crypto.com, already registers a good part of the crypto pulse of the planet, and hasaccording to a YouGov survey.
Beyond the “brilliant minds”
The question of a possible crypto Silicon Valley, however, is not only strictly geographical. Whether there are innovative poles for new forms of money to prosper and accelerate transformations in other ecosystems will undoubtedly depend on multiple factors.
Historian James Hardy recalls, regarding Silicon Valley, that behind the success of this corner of California there is a long combination of relationships between “academic institutions, venture capital, infrastructure, willing governments and thousands of brilliant minds.”
In the case of the crypto ecosystem, which by definition is dispersed, the issue of regulations could become the GPS that “moves” the industry to the best possible place. This might sound contradictory to enthusiasts of extreme decentralization, but the truth is that in recent years there has been progress towards regulations, such as those that Europe will have from 2024.
This is a key moment for the entire sector and the mirror of Silicon Valley has a couple of valuable lessons to look closely at. The first of them is that “brilliant minds” are essential, but not sufficient. The second, and perhaps the most important, is that the advent of new generation cryptocurrencies, less volatile and backed by assets, demands incentives as powerful as those that once led to the emergence of the most innovative corner of the planet.
