Crypto’s recent rally is a beacon of hope for the industry, but its lasting presence will depend on clear regulatory guardrails, according to Tom Duff Gordon, vice president of international policy at Coinbase (COIN).

Joining CoinDesk TV’s “First Mover” live from the World Economic Forum (WEF) at Davos 2023, Gordon said crypto has the potential to reach mainstream adoption, but that’ll depend on regulation that can then “generate confidence for retailers.”

“2023 for us could be a real inflection point in policy and a regulatory framework could be one of those things that helps to accelerate the accelerator side of the crypto downturn,” Gordon said.

Crypto adoption more broadly has been bogged down by the fall of bankrupt crypto exchange FTX, which Gordon said has led some policymakers to feel “reticence to engage.”

One thing that is clear, Gordon said, is that the fall of FTX “put crypto on all policymaker’s radar.” He predicted that primarily guardrails could be set by the G20.

Making sure basic guardrails are “sensible and moderate” before bringing crypto into the existing financial system will be needed, he said.

“We’ll see more institutional investors getting into crypto but I think we will see more traditional finance banks also beginning to explore this space,” Gordon said.

Those efforts come as Coinbase looks to manage a 20% headcount reduction and a $100 million settlement with the New York State Department of Financial Services (NYDFS).

With “recession fears and a softer landing coming to the fore,” it may finally be time for crypto to be recognized by the policymakers, he said.