Dr Martin Hiesboeck: Opportunities for cryptocurrency in the UK
Dr Martin Hiesboeck, Head of Research at Uphold, discusses changing end user habits and the opportunities for cryptocurrency in the UK and beyond.
The UK could set the standard for crypto regulations
“Since June 2022, the UK has been in a unique position when it comes to regulations, and has essentially outlined that blockchain and crypto and all the associated technologies are welcome.
“Following Brexit, the UK has the opportunity to fulfil a far more progressive stance than other countries. Not being a part of the European Union means that there are no member states with individual financial rules and various regulatory bodies to navigate – this is already an issue in traditional finance, not to mention cryptocurrency.
“The UK has the luxury of setting its own rules, putting it on a unique path to set an example worldwide for regulations and adoption standards.”
Encouraging consumers to embrace cryptocurrency
“It’s less about adoption of cryptocurrency – the technology is here to stay – it’s more about empowering consumers with easy user experience so that it can be embraced.
“Essentially, people want ease of usability when it comes to their finances. The average person isn’t concerned about whether a £50 shop comes from their Bitcoin account or bank account. They’re concerned about how easy it is to pay when they get to the checkout.
“For consumers to truly embrace cryptocurrency, the technology needs to feel familiar. For example, physical payment cards are no longer a necessity, but they’re so ingrained in payment behaviour that people still receive them and use them with every standard bank account. By combining familiar practices such as card payments with cryptocurrency, users will easily adapt to the technology.”
Financial institutions and cryptocurrency
“When you look at what a digital transaction is, what a stable coin is, it’s nothing but an electronic payment order – just like cryptocurrency. It’s not a new concept, and spending in cryptocurrency requires the same calculation of instant currency conversion as a travel card, for example.
“The key reason that financial institutions will implement cryptocurrency into everyday accounts is because it makes economic sense. Major banks have been in blockchain for years, and smaller financial institutions will follow suit, putting resource into education for end users and encouraging their customers to embrace it when it makes economic sense – and it is starting to.”
Cryptocurrency makes finance accessible
“Just a few short years ago, the average person being in full control of the way they manage their money was not the reality. Banks regulated their customers, requiring them to undertake a lengthy process and meet certain criteria to open a stock trading account. But technology has changed things.
“With a smartphone in their hand, a consumer can trade stocks and choose how to spend and hold their money in whatever currency they desire. The internet has made cryptocurrency accessible to billions of people, which is incredible for financial awareness and financial education. It allows people the opportunity for self-governance and self-sovereignty, that they proactively educate themselves on finance to inform the decisions they make.”
“While the average person can self-govern in the crypto space, it’s a misconception that there’ll be no need for a ‘middleman’ – there must be someone there to understand the data.
“For example, if someone was to go abroad and rent a car, and add the insurance to their blockchain, they still need a mediator in the form of an insurance company to interpret the information and determine fault and settlements if they were to cause an accident. The same goes for a healthcare blockchain and healthcare data – they would want a doctor to interpret that data.
“Data is useless if a qualified person isn’t there to interpret it and create trust , whether it’s an account manager for the platform, or a portfolio manager or financial advisor. The majority of people will not trust an anonymous blockchain, instead looking to trusted experts to lead the way.”
Cryptocurrency in the next decade
“In 10 years, ‘crypto’ won’t be a thing anymore. We’re hopefully destroying this idea of crypto, so the terminology will be around financial currency.
“We will simply have completed the transition of physical assets becoming a simple digital construct, whether it’s paying for a weekly shop via a currency account, or a house deed. Everything will be recorded onto a blockchain, and our assets will become entirely digital.”
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