The U.S. Securities and Exchange Commission blessed Ether and Bitcoin ETFs, and the U.S. House passed FIT-21 with bipartisan support. The perception is that those are the next steps in the ongoing experiment to see whether regulation can reduce the risks inherent in crypto and tame the wild digital assets sector.

But what if I told you that, by nature, crypto has the potential to be far safer than the existing financial system?

The salient concept here is “custody,” or more specifically, “self-custody” – the ability for people to maintain control over their own assets and data during financial transactions, without intermediation from third parties like banks, exchanges, or web companies, 

Let’s be honest. The majority of people who pay passing attention to crypto most likely have their opinions shaped by news headlines about catastrophes like the collapse of Sam Bankman-Fried’s FTX or the conviction of Binance CEO Changpeng Zhao on money laundering charges.

However, those scandals had much more to do with human nature than the nature of crypto.

Looking back to the 2019-2020 bull market for crypto, developers were attempting to build sophisticated crypto-powered applications that were simple for neophyte traders and investors. In too many cases, simplicity was achieved by sacrificing self-custody and trusting the responsible stewardship of massive Centralized Exchanges like FTX.

Consumers were peddled a combination of the worst risks of Web2 fintech and the unsolved problems of Web3. This shortcut-taking led to disaster for the companies, their investors and their customers.

But we don’t need to hearken back to Lehman Brothers to show that crypto has no monopoly on spectacular financial failures.

Consider, for example, the ongoing case of Synapse Financial Technologies, a non-crypto company whose platform is an intermediary allowing financial technology companies to provide bank-like services (such as checking accounts, credit cards and debit cards).

The issues of trust and custody are at the heart of the implosion of the banking-as-a-service pioneer that was once touted as the leading edge of fintech and is now teetering between bankruptcy and liquidation. U.S. Bankruptcy Court Judge Martin R. Brash said “tens of millions” of individual “depositors” are on the hook for losses amounting to “potentially hundreds of millions of dollars,” according to a report from Forbes.

Speaking as a developer and former products expert for companies such as Braintree, Venmo and Paypal, who has since seen the light on blockchain payments, I can tell you that the real strength of crypto, compared to traditional fintech, is it enables developers to build in a much faster and leaner way. That’s because the underlying blockchain technology already accounts for fintech bugbears such as data security, payment integrations and – as mentioned above – custody of funds.

The new generation of crypto-powered apps has the advantage of new technology that abstracts complex details in favor of user-friendly interfaces. At the same time, it preserves self-custody, so it doesn’t run the same risk that centralized entities posed during the last cycle.

In other words, while public attention has been fixated on extinguishing the fires lit during 2019-2020, crypto infrastructure has matured to the point where we can get the best of both worlds: A friendly Web2 user experience with apps built by developers who don’t have to worry about taking custody of user data or funds, making it safer for every participant.

That’s what gets developers and crypto entrepreneurs excited about digital assets. Crypto is becoming safer, faster, and easier – ultimately refining itself out of the average users’ experience. This intentional invisibility is a key goal at the end of crypto’s journey to becoming a significant component of the mainstream financial system and people’s everyday lives.