2023 was an exciting year for the global crypto lending sector.

The first half of the year saw our industry face numerous challenges, including an overall economic downturn affecting the entire financial industry, a collapse in crypto token prices in the aftermath of the 2021 speculative bubble bursting, and numerous scandals, company failures, and even prosecutions of actors and stakeholders. Venture capital for innovators was often hard to come by, and focus on strategic growth of the sector often had to give way to tactical survival. Regulatory uncertainty depressed much of the optimism surrounding the market potential of blockchain-based lending.

Nonetheless, as we wrap up the year, we’re buoyed by several positive signals, such as a dramatic growth in crypto lending volumes over 2022 via both centralized platforms and DeFi protocols, an increase in investor confidence, a recovery in token prices, and more. 

A significant number of promising firms and protocols have not only survived the downturn, but are showing cautious signs of optimism for the future. Major TradFi actors, such as ING in the Netherlands, Germany’s Commerzbank, and Santander in Spain, have invested significant in crypto-based lending, displaying their confidence in its business promise of crypto credit services. Development of new protocols and business relationships is flourishing, and while new regulations like the European Union’s Markets in Crypto Assets (MiCA) Directive don’t always directly address crypto credit, they have brought much needed clarity to what is allowable and what is not.

Because of initial pessimism in the industry, the Crypto Credit Association started the year with a decision to focus on structure and content, and on building relationships and visibility throughout the financial industry. We developed a set of badly needed crypto credit risk management principles, successfully delivered a demonstration of crypto lending to a full house at GITEX Global 2023, one of the world’s biggest tech conferences, and worked with partners and stakeholders around the world to build the basis for successful growth of the community in the coming year.

This approach paid off, as we welcomed our first three new members, Arkis, Cicada Partners, and Atlendis, in Q4 of 2023, with several more firms in the process of joining. Every single organization we spoke with agreed that greater coordination was needed for the long-term viability of the sector – whether to ensure that regulations are sensible and principles based, that all industry participants follow reasonable norms and good practices, that all those interested in this activity, whether organic crypto actors, service providers, TradFi banks, and other stakeholders have a seat at the table, and that crypto lending continues to grow as a driver for democratized, secure finance and better access to liquidity for all.

In the meantime, happy new year from all of us at at the CCA – Join us as we continue the community’s success in 2024. We’d love to hear from you!