How Purpose-Driven Organizations Can Engage with Cryptocurrency
The growth of the global cryptocurrency market has moved quickly, creating opportunities for investors, businesses, and individuals. Earlier this year, total cryptocurrency market value surpassed an estimated $2 trillion, driven by the popularity of Bitcoin, Ethereum, and other decentralized currencies. What was once just a new way to invest online or buy things anonymously has become a financial and investment vehicle for art, e-commerce, and even real-world applications such as airlines, hotels, and restaurants.
As cryptocurrencies, NFTs, blockchain, and other technologies become mainstream, businesses, particularly purpose-driven organizations, have the opportunity to get in on the ground floor and participate in this growth.
To explore the opportunities and what today’s leaders should know, Kindred recently hosted a panel discussion with Cathy Hackl, Founder of the Future Intelligence Group; Erikan Obotetukudo, Founder and General Partner at Audacity; and Caty Tedman, Head of Partnerships at Dapper Labs.
The conversation explored the relationship between crypto and financial inclusion for underrepresented communities, mitigating risks, and suggestions for responsibly engaging with crypto in business decisions. Below, please see the key takeaways from their discussion.
1. Cryptocurrency presents an opportunity for all stakeholders in a global economy to benefit.
Given the popularity of cryptocurrencies globally — recent data from Chainanalysis shows global adoption was up 881% this year — regulators and entrepreneurs have an opportunity to embrace emerging trends and capture value over time. According to Audacity’s Obotetukudo, individuals, particularly those who have been locked out of opportunities to create wealth, are driving the new trends and adoption. Cryptocurrency provides a chance to participate in earning income and investing with fewer barriers than traditional vehicles.
2. Tap into existing experience.
Cryptocurrency and other new forms of capital are emerging technology. Leaders interested in engaging with the opportunities they provide should approach it as they would any innovation, with curiosity. “Don’t feel afraid to ask questions,” Dapper Labs’ Tedman says. “Ask the same questions you asked in 2006 about social and in 1999 about the internet.”
Crypto pulls from the foundations of existing industries to create opportunities and value for stakeholders. Tapping into existing experience and areas you already understand about your business will inform how to use the technology to drive value for your organization and consumers.
3. Integrate cryptocurrency into ESG-related work.
From an ESG perspective, companies have a few options for engaging with cryptocurrency. The panelists recommended companies build on existing practices by offering alternatives to traditional 401k investment portfolios for employees. Another option is providing tokens as compensation, which though risky, can be of high value for recipients in the long term.
Brands can adopt a form of tokenomics that compensates creators, users, and brand advocates with social tokens or assets tied to the company. “The notion that companies can actually reward their user base and their clientele with crypto is the notion that you’re actually giving out an asset, you’re giving out wealth, and you’re giving value back to the people that believe and support you,” Obotetukudo said.
4. Cryptocurrency is creating opportunities for financial inclusion in emerging markets.
The growth of crypto presents an opportunity for communities that are typically underrepresented in the investor community to build wealth without the barriers posed by traditional investing. For instance, individuals and businesses in emerging economies can invest in an asset with the potential to yield significant results. Consider that according to Chainanalysis, the countries leading global adoption of crypto are Vietnam, India, and Pakistan.
Cryptocurrency has the potential to equitably benefit society, but only if we build inclusive, sustainable experiences. Cryptocurrency may be a new type of institution, but it’s a distributed one. The people and companies building on the blockchain must understand that we don’t get many opportunities to build equitably from the ground up. As a result, we should make sure we don’t make the same mistakes that leave people — and the planet — behind. Cryptocurrencies and blockchain technology can be a new frontier of innovation for ESG-focused organizations, and leaning into their advantages (while being aware of potential downsides) may very well help remove barriers to investment for millions, if not billions of people.
Kindred members have full access to the exclusive content linked out below. Not a member? No worries. Submit your application form here and someone from the team will reach out to you.