The UK hasn’t got round to regulating ICOs properly – does this put London’s status as a leading fintech hub at risk?
The sooner we regulate, the better. There are too many projects out there lacking the basic hygiene of effective governance, transparency and accountability. A glut of scam coin issues, concentrated in London would definitely impact our reputation as a leading fintech hub.
Does the private equity world need to change itself in order to compete with ICOstyle funding?
They can exist, side by side, as they are very different. In its purest sense, an ICO is about using blockchain to create a platform, where the coin provides access to the service capability. Private equity is very much about raising capital to take a company private, and then remediating it operationally to create a new platform and delivering greater shareholder value. Where PE is missing out, is the use of blockchain as a strategic lever for remediation, especially across two or more companies, horizontally, or vertically integrated.
Do you see cryptocurrencies becoming legitimate payment methods? If so, in what time frame?
The frictional cost of physical money in the economy – notes, coins and atms – as well as the overhead from point of sale, creates no value whatsoever in an economy. And our existing payment infrastructure – BACS, CHAPS and SWIFT, is complex, and introduces further overhead. Cryptocurrencies, issued by a central bank, would offer a cleaner and much cheaper platform to transmit store of value. It would then seem natural that other, properly issued coins and tokens would sit alongside central bank cryptocurrencies. As to timing, it could happen relatively quickly, but there are broader, structural, legislative and policy aspects to address; it can only be an agenda item for any post-Brexit administration. So a minimum of 3 years.
Read more about which funding model is best for a growing business, ICO, VC, or PE.