A webinar hosted by Shoosmiths in conjunction with Asset Reality.
According to a recent survey, what percentage of millennial millionaires own cryptocurrency?
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According to a recent study conducted by CNBC, 83% of millennial millionaires own cryptocurrency, with more than half having at least 50% of their wealth in cryptocurrencies.
Answers to questions during the webinar
1. What is the difference between cryptocurrency and fiat currency? [4:35]
- Fiat currency is currency issued by a government, not backed by a commodity (e.g. gold), such as the British pound.
- Its value is determined by the confidence and stability of the issuing government.
- Cryptocurrency is a digital asset that derives its value from trust in the decentralized technology behind cryptocurrency, a blockchain.
- Fiat currency requires an “intermediary” to facilitate exchanges (a bank, for example), while crypto payments can be made directly and cross-border, often making them cheaper and faster.
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 organizations offer free courses to help understand the basics of cryptocurrency, NFTs, and blockchain technology.
- Only UK companies that handle cryptocurrency need to register with the FCA.
- There are many third-party organizations that can facilitate payments and perform AML/KYC checks on cryptocurrency.
- Accepting crypto payments for goods or services is perfectly doable, but people can be turned off by volatility (e.g. Tesla).
3. If a broker was interested in cryptocurrency, should he accept it himself or use a third party? [11:23]
- The current risk of doing it yourself is high, especially if you are new to the market without any prior knowledge. So, it is better to use a trusted third party. This is the most appropriate way to deal with cryptocurrency for most businesses.
- Look who the third party is backed by; Have you heard of them? Which jurisdiction? Are they backed by reputable companies?
- The user journey for crypto transactions can be just as easy with the right help.
4. How long do you think before cryptocurrency becomes more prevalent in the luxury asset space? [16:34]
- The global luxury market will reach $1.5 trillion by 2025. 50% of this market will be millennials.
- It is difficult to judge what will happen in this space, but we have already seen luxury brands invest more and for different applications, for example NFTs for counterfeit protection.
- In 2021, 73% of crypto owners were millennials.
- Generation Y is responsible for 85% of the growth in luxury sales.
- The art market has taken the crypto lead in the luxury asset space, with the yacht/marine market lagging behind.
5. If the funds are immediately converted into sterling, isn’t that “crypto-washing”? [19:25]
- People meddle in the industry, which is a good thing whether or not they convert the currency after a trade.
- Accepting crypto currencies is no different from accepting Euros and exchanging them for British Pounds.
- Why create a barrier in a potential selling opportunity, especially if your target demographic is so heavily biased towards crypto assets?
6. How can a broker be assured that the cryptocurrency they accept is clean and secure? [22:29]
- How can you do that with fiat currency? Much more fiat currency is laundered and used in illicit activities compared to cryptocurrency.
- There are many screening tools and companies that help assess the risks of crypto transactions and screen the drop sender.
7. What kind of adoption do you foresee in the luxury asset market and as a payment method in general? [25:12]
- Questions to ask before considering cryptocurrency are: does it fit your demographics? Is volatility too bothersome for you?
- A Deloitte study predicted that 75% of retailers will accept crypto within the next two years.
End of the survey:
How many participants think businesses should accept crypto as a method of payment?
90% of participants indicated that businesses should accept cryptocurrency as a form of payment.
Questions from participants for which we did not have time
8. What does the payment journey look like for a customer paying in crypto?
For most businesses, using a third-party payment service is like accepting any foreign currency. The third party will accept the cryptocurrency and convert it to the recipient’s native currency. As with foreign currencies, the exact price may be fixed shortly before payment to ensure that neither party is affected by price fluctuations.
9. Should a broker have crypto reserves?
Unless a broker handles cryptocurrency directly, this is almost certainly unnecessary and could potentially expose a business to price fluctuations.
We would like to say thanks to the writer of this write-up for this remarkable material
“Do you accept Cryptography?” – Demystifying Cryptocurrency In Yacht Transactions
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