Last week, I had the chance to interview Wes Spencer, from FifthWall Solutions, on cryptocurrency in community banking. We’ve had so much good feedback from that webinar – if you didn’t get the chance to watch it, email laura@bedelsecurity.com and she'll get you the link.
There was a lot that we covered and even went deep on a few of the areas. So I thought it may be helpful for me to summarize what I learned from the experience:
- Treat cryptocurrency like a stock – while it’s called “currency”, the volatility of cryptocurrency makes it speculative in nature. $10,000 today could be $0 tomorrow. That means you should only invest what you are comfortable losing.
- Cryptocurrency and blockchain technology aren’t going anywhere. Despite the wild fluctuations and exchanges going out of business in the past year, it became clear to me in my conversations with Wes: this is not a fad. The technology is real, the applications are endless, and there is opportunity in this arena. That said, it’s still in the infancy stage – and that means crypto companies still have a lot to learn and work through.
- Regulation will actually be good for cryptocurrency. Wes talked about how the SEC is working to regulate crypto and it sounds to me like some guardrails would provide some stability and instill a little more confidence in the general public. The FDIC has released several statements regarding crypto and as some of those pieces take shape it could open up some niche banking opportunities.
- There are options for a bank to “stick a toe in” without taking on too much risk. While we discussed some of the risks in a bank working with crypto, it became clear that there could be opportunities for those banks looking to differentiate themselves. Many consumers trust their community banks and would be more likely to purchase crypto from a trusted source than establishing a digital wallet on their own. This is where a bank can take on a custodial role – making it easy for their customers to purchase crypto through a familiar internet banking interface. One in particular that we discussed, and I found to be an interesting model, was NYDIG – you can check them out here.
- It’s way too early to feel left behind. Easily the most important lesson learned from the entire webinar – we even stopped the conversation and reiterated Wes’s statement for emphasis after he said it. Crypto and blockchain are still very new. The current adoption rate in banking is very low. While you need to be at least slightly familiar with the concept, don’t hit the panic button if you don’t have any plans for rolling out crypto in the next year. Keep it on your radar and see where this goes.
One other thing I learned in the process was that providing educational opportunities and overall value to the community financial institutions we work with is rewarding and a lot of fun. The genesis of this webinar came from customer questions and feedback – so please let us know if you have an idea for a topic that you’d like us to cover.
If you want to hear about upcoming webinars, make sure you're signed up for our newsletter by visiting: https://www.bedelsecurity.com/lp-newsletter or using the form on the right side of this page. And lastly, one final thank you to Blough Tech for sponsoring this event with us. We look forward to putting on more webinars in the near future!