As we delve deeper into the 21st century, our major societal transformations are increasingly becoming characterised by innovations that disrupt almost every single industry.
From the way we hail taxis to how we book hotel rooms, our world is changing, and central to this transformation is how business is done in the new economy of digital currency. It's taken economists by surprise while central banks are, as yet, still unsure of how to react to this cataclysmic change in the global economic system; after all, in this new era of Bitcoin, Ethereum and Ripple, inflation has no influence over the value of money.
So how can you, as a business owner, adjust to this change?
The rise of digital currency
Following the global economic crisis of 2008, it became clear that there was an opportunity for the innovators and disruptors of the tech world to make their mark. By utilising the advancement of cloud computing technologies, digital currency pioneers were able to turn to the internet and exploit public distrust of the banking status quo to build a stable, viable and, ultimately, invisible currency: Bitcoin.
Fast forward eleven years, though, and major organisations are only now embracing the benefits of blockchain technology, on which Bitcoin is built. Ever the social experimenter, Facebook - in conjunction with Visa, Mastercard and Paypal - is about to leverage its unmatched user base to create an economy of its own, with the launch of Libra, its digital currency. It is perhaps the most significant statement of intent yet that digital currencies are the long-term future.
If Facebook is bringing digital currency to the mainstream, though, they are by no means pioneers; for some time, Ripple (a real-time gross settlement system, currency exchange and remittance network), has been working closely with some of the world's biggest banks to make payments faster and easier.
So if we accept that we are on the verge of a new era, how can you, as a business owner, react? After all, every organisation should be prepared to embrace this new system, reap its benefits and expand into new markets. What can you do to prepare yourself for this brave new world?
Research, identify and implement a FinTech solution
Long term, "waiting to see what will happen" is not an advisable development strategy. The pioneers of these technologies already have an advantage, and if you want to ride the wave while you still have a chance, then you may have to think a little differently.
The best place to start is by educating yourself on the mechanisms behind these upcoming changes. Keep track of the latest trends and developments, and always think strategically, too. For instance, what are the early adopters of digital currency doing and how are they implementing these changes into their business models?
At some point in your research, you will also likely have to ask yourself how financial technology (or FinTech) can help in making your business friendlier to digital currency transactions. Don't underestimate the scale of this, either; adopting FinTech means being ready to make changes to every aspect of your organisation's transactions structure, from how you are getting paid via e-wallets, to how your accounting department (and system) is processing them.
There is a legal aspect to this transformation, as well. FinTech law is a highly specialised and continuously evolving area of law and will require an expert in the field to guide you. Doing business at this level is a potential minefield, so always consult with a technology lawyer before you make any big decisions.
Overall, though, the main objective is to gain an overall understanding of developments in the digital currency world. Not only will this help you "accept" and adopt it as a means of doing business in the near future, but it will also help you identify how your business - depending on its scale of operations and industry - can start planning for the future.
Engage with stakeholders and clients
While you are conducting this research, it's wise to remember that your competitors are not resting on their laurels, either; organisations everywhere are incorporating FinTech and Blockchain technologies into their strategic development, with these "digital strategies" becoming central to how they can stay competitive in today's marketplace. You will need to do the same.
Therefore, you must also identify how your business model will be affected by these changes, particularly where external stakeholders and clients are concerned. For example, will the implementation of FinTech solutions on your side facilitate or hinder the business that you do with them? Will it streamline the supply chain or help achieve economies of scale? It's important to bear these questions in mind, as, although they relate more to FinTech than digital currency itself, you cannot have one without the other. It is paramount that you consider how to implement FinTech if you want to transact with digital currencies. A good place to start is by asking your existing external stakeholders if their clients that would welcome the option of paying in digital currency.
You will need to examine the extent of how digital currency can help expand your business, and your external stakeholders have a pivotal role to play in this. The extent would, of course, depend heavily on your market and on the relationship you have with your stakeholders, but it only requires one part of the chain to affect the rest, creating a significant positive impact on the overall process.
The same applies to your clients, too. The channels from which you interact with them are usually transaction points from the provision of a service or the sale of a product, and whether you are in the retail market, the services market or even a B2B business, digital transactions are the same. Your clients are probably the biggest asset to your organisation, so you need to ensure that not only do you provide the option to receive payments through digital currency but that you do so in a secure way that safeguards their interests, too.
Finally, it would be wise that, as an adopter of these new technologies, you also become a promoter. This marketing tactic will have a positive impact on your exposure to new clients and help you gain a competitive advantage.
This article does not promote digital currencies per se, but rather the philosophy of accepting their existence. It's almost inevitable that long term, those businesses that don't will end up paying a high opportunity cost - a price that will, initially, at least, be much higher than the cost of adopting.
Therefore, preparing your business for the new digital economy starts by accepting that change is inevitable. Regulators and policymakers are expected to develop a proper framework that will enable every business to transact with safety in digital currencies; preparing for it today and identifying how you will use it to become a business of the future is a move that will undoubtedly pay high returns.
What are your thoughts on digital currencies in business? Let us know in the comments below.