A webinar hosted by Shoosmiths in collaboration with Asset Reality.
Intro poll
According to a recent survey, what percentage of millennial millionaires own cryptocurrency?
According to a recent study conducted by CNBC, 83% percent of millennial millionaires own cryptocurrency with over half having at least 50% of their wealth in cryptocurrencies.
https://cointelegraph.com/news/new-survey-reveals-83-of-millennial-millionaires-now-own-crypto
Questions answered during the webinar
1. What is the difference between cryptocurrency and fiat currency? [4:35]
- Fiat currency is the currency issued by a government, not backed by a commodity (e.g. gold), like sterling.
- Its value is determined by confidence in and the stability of the issuing government.
- Cryptocurrency is a digital asset that derives value from confidence in the decentralised technology sitting behind the cryptocurrency, a blockchain.
- Fiat currency requires a “middle man” to facilitate exchange (a bank, for example), whereas crypto payments can be made directly and cross-border, often making them cheaper and faster.
https://www.investopedia.com/terms/c/cryptocurrency.asp
2. What could a yacht broker do now to prepare for a crypto future? [8:47]
- Cryptocurrency represents a huge opportunity for businesses in the yachting industry and beyond.
- Awareness and understanding are key – many organisations offer free courses to help understand the basics of cryptocurrency, NFTs and blockchain technology.
https://academy.chainalysis.com/page/learn-cryptocurrency
- Only UK businesses who are handling cryptocurrency need to register with the FCA.
- There are many third-party organisations who can facilitate payments and perform AML / KYC checks on cryptocurrency.
- Accepting crypto payments for goods or services is perfectly doable, but people can be deterred by the volatility (e.g. Tesla).
https://cointelegraph.com/news/85-of-merchants-see-crypto-payments-as-a-way-to-reach-new-customers-survey
3. If a broker was interested in cryptocurrency, should they accept it themselves or use a third-party? [11:23]
- The current risk of doing it yourself is high, especially if you’re new to the market with no prior knowledge. Thus, it’s better to use a trusted third party. This is the more appropriate way to deal in cryptocurrency for most businesses.
- Look at who the third party is underpinned by; have you heard of them? What jurisdiction? Are they backed by reputable companies?
- The user journey for crypto transactions can be just as simple with the right help.
https://www.pymnts.com/wp-content/uploads/2022/06/PYMNTS-Paying-With-Cryptocurrency-June-2022.pdf
4. How long do you think before cryptocurrency becomes more prevalent in the luxury asset space? [16:34]
- Global luxury market will reach 1.5 trillion dollars by 2025. 50% of this market will be millennials.
https://www.matterofform.com/news/articles/the-luxury-report - It’s difficult to judge what will happen in this space, but we’ve already seen luxury brands investing more and for different applications e.g. NFTs for protection against counterfeiting.
- In 2021, 73% of crypto owners were millennials.
- Millennials drive 85% of luxury sales growth.
https://triple-a.io/crypto-luxury-industry/ - Art market have been taking the lead when it comes to crypto in the luxury asset space, with the yacht/marine market lagging behind.
5. If funds are immediately converted to sterling, is this not “crypto-washing”? [19:25]
- People are dabbling with the sector, which is a good thing regardless of whether they are converting the currency …….