Why the Silver Market needs to engage with and embrace cryptocurrency and the concept of decentralised finance (De-Fi)

On the basis that digital technologies revolutionise the world and, therefore, that digital currencies will revolutionise global finance, everybody needs to understand, engage with and embrace cryptocurrency. Even as you read this, international corporations are adding digital coins to their treasuries towards a time when they can trade cross border without paying extortionate and often unnecessary foreign exchange premiums. 

At a local level the same principle applies to domestic consumers. With so much purchasing moving online and overseas, every time you buy something from China or America (or elsewhere outside of the UK), you’ll be paying bank fees for converting your pounds sterling into whatever currency the local vendor works in. Similarly, if you holiday abroad and pay on your debit or credit card. Look at your statement and you’ll see that you have incurred foreign exchange costs plus bank fees. 

Small things matter

On a very personal and immediate level, having a digital wallet and paying in cryptocurrency will remove all of these costs. Depending on how much you deal cross-border, that might not save you much.   But given the current economic situation in the UK, any unnecessary expense should be eliminated.

The fact is that the silver cohort travels further and more frequently than younger folk. Furthermore, whilst they may think they are paying in sterling in the UK, whether they are cruising or having an exotic holiday walking rainforest canopy trails in Costa Rica, there is almost certainly an end supplier being paid in local currency, inflating their costs.

Older people are canny and savvy

Something the millennials and digital natives, who think the world and communication runs to their agenda, consistently fail to appreciate is that the silver cohort are canny.   So they should be, they’ve been around the block more than once, experienced economic depressions, seen governments come and go and lived to tell the tale all whilst accumulating wealth. 

The silver cohort are, and have always been, early adopters. These were the cohorts that embraced technologies like mobile phones, personal computers, laptops and tablets, and quickly learned to appreciate their benefits. They seamlessly moved from cash and cheques to online banking. They are major users of social media. They are connected. 

People turning 65 this year were surrounded by technology. They were the first to use personal computers. The first to own mobile phones and the first to use the internet. They have followed the evolution of music from vinyl, through Walkman, to iPod to mobile phone. The internet from 64Kb dial up telephone lines to 100Gb wireless broadband. The silver cohort is tech savvy. 

Money and finance have lagged behind the tech curve

Financial institutions and regulators alike have been slow adopters of technology. Politicians, central banks and tax officials, worried about losing control, have been technology averse in these areas. Big retail banks have waited to adopt technology until being threatened by online challenger brands and the realisation that bricks and mortar high street branches are a drain on resources and bad for profits. 

The general legacy of finance in the UK has been to ignore innovation until it’s too late. The Bank of England has only just got around to talking about the possibility of ‘Britcoin’ – a central bank issued digital currency tied to the pound. The perceived wisdom and policy viewpoint of the UKs regulators has been ‘decentralised finance won’t/can’t work’.

If you want to know about DEFI – look across the channel

The one big reason that UK authorities don’t believe DeFi will work is because the UK never adopted the Euro. But look across the channel and you can see just how well a multi-country economic area has prospered by removing national boundaries to money flow and adopting one central currency. 

The Euro and the European Community is ‘DeFi in action’ on a regional basis. That represents 450 million people, across 27 countries, with a common currency and no foreign exchange costs or issues.

It’s not a question of if, it’s a question of when!

All things considered decentralised finance, powered by cryptocurrencies, is inevitable. Given the speed of technological evolution, the move to a global financial ecosystem may be closer than most people think. It will affect everybody. We might not pay for a pint of milk down the corner shop in digital currency for a while. Although, in practice, if you pay for it using a contactless debit card that’s pretty much what you’re doing.

But the questions the wealthy silver cohort should be asking now are around how cryptocurrency fits in with their personal finance. For example: can they hold digital coins in their pension and how; can crypto be included in an ISA; should they be looking for crypto investment funds; can they pay their mortgage in crypto or take their pension in crypto. All these things will come to pass.

At the same time, whilst the financially challenged silver cohort may not need to be concerned about the role crypto might play in their wealth, the underlying technology of crypto, the blockchain, looks set to make a big impact on the payment of social benefits.

The time to learn is now

All things considered, there is a lot to know about cryptocurrency for everybody – and the silver cohort, especially that part of it with wealth, cannot afford not to find out. Most importantly, like anything to do with finance, savings and wealth, there are risks. Those who know what they are doing will stay safe and financially secure. It’s time to learn. Which is what Dacxi is all about.

Categories: Silver Blog