You know things are weird in the financial world when there’s a stock for Pepe, when a joke Internet meme becomes a massive investment opportunity, and when billionaires use Twitter polls to determine if they’re going to sell millions of shares of stock in their companies (ok, only one billionaire is doing that so far). Oh, and of course, when teenagers are getting rich selling NFTs of pixel art for millions of dollars. As in, like, real money. Between NFTs, meme stocks, market chaos, and all sorts of other weird trends, this has been an odd and, depending on your view, either exciting or uneasy time in the world of finance.
So it’s been a lucky break for me that in the past few months I’ve had the opportunity to deliver keynotes for conferences with audiences of credit union leaders, financial regulators, asset managers, and a variety of other financial and banking professionals.
This serendipitous convergence has been an interesting opportunity to re-examine my research and writing on the future of value and money from A Future So Bright, as well as the research and writing on the future of trust and truth.
So what does this weirdness mean for you?
Well, you’re going to have to accept it because money isn’t just weird now, it will continue to get weirder. Cryptocurrencies and non-fungible tokens (NFTs) are two developments you should look at to understand this “weirding.”
Together these technologies will change not only how people view assets, but how they manage those assets and their resulting wealth. What’s important about crypto and NFTs isn’t that they’re part of the future, but the effect they have on shaping that future.
People will have to understand the importance of decentralization, as well as just what a blockchain is. They’ll need to be tech savvy enough to invest in the future without getting scammed out of what they’re worth now.
In short, people are going to have to deal with a lot of weird stuff — which is why it’s so important for business leaders to look at the emerging trends now, for people to familiarize ourselves with the shifting landscape, and for social justice issues to be factored into that future.
In case you haven’t been tracking closely enough, here are a few key trends that may be showing up on your radar screen:
meme stocks – these are digital assets issued for companies that are based on memes and viral content.
cryptocurrencies and blockchain protocols – while some people view cryptos as the key to decentralization, others see them more like a payment method or commodity. Cryptocurrencies are likely to continue to play a key role in how people do digital transactions, but they won’t be the end-all, be-all for money or assets.
People also need to understand what a blockchain protocol is if they want to invest in the future of money and value. Blockchains are the decentralized ledgers that record transactions and timestamps on a network, and they were first introduced as part of Bitcoin (BTC). Those protocols will increasingly impact other industries outside of finance, but there’s work to do first in terms of educating people about their potential impact. (And that includes their ecological impact, as I wrote about in A Future So Bright.)
NFTs – these are the digital tokens that have created a new kind of asset class. They represent ownership, whether it’s decentralized or centrally managed, and they can be fungible (like cryptos) or non-fungible (unique like art).
Enthusiasts see NFTs as the key to decentralization, because they take people out of the center where their worth is defined by institutions.
digital scarcity – We tend to think of tangible goods as scarce and digital assets as freely reproducible, but NFTs limit the supply of a digital asset and create inherent value without institutions or centralization.
If none of that helped clear anything up, just understand this: every day, the future of money is getting weirder than ever before, but with that weirdness comes opportunity. If you’re not thinking about what that means for your business and industry today, you may be missing out on the chance to create new value and experiences. And you may be surprised when someone comes out with, say, a blockchain protocol that makes your business obsolete. You need to understand how this “weirding” will impact your space.
Remember: The Economy is People
I’ve made this point repeatedly, but it’s more important than ever to remember that the economy isn’t just an abstract concept of money and digital assets — it’s people. It’s about people and their well-being, how well they can provide for themselves, and what they want for themselves and their families. It’s also about who will be dis-empowered if we don’t work now to secure our digital rights.
The importance of financing climate resilience
We’re already seeing the impacts of climate change; it’s going to be a key factor in our ongoing future. Left unresolved, the effects of climate change will have devastating impacts on human populations around the world. Because of its severity, we need to address this global crisis now, and there’s an opportunity here: finance innovation can help us better prepare for the worst of possible futures.
It’s about making sure that communities can survive when things get worse. It’s about allocating capital to projects that will help them thrive in the face of climate change. And it’s about investing in new technologies that will help people adapt to a changing world.
The future will always bring surprises, so we’d better prepare for those as well. It’s about laying plans for the best possible outcomes, while also being prepared to adapt to the worst, or just anything that comes next.
The future may be weird, but it can also be bright if we make empowered decisions today to invest in a better tomorrow.
