Which is Worse: The Fear of Crypto or the Fear of Missing Out?
Posted on

October 1, 2021

3 Min. Read


Crystal Benton

Which is Worse: The Fear of Crypto or the Fear of Missing Out?

As private sector moves continue to fuel cryptocurrency’s growing legitimacy as an asset class, corporate stalwarts including Walmart, Amazon, PayPal and JPMorgan Chase are hiring senior-level crypto expertise. Major consumer brands such as Starbucks, Home Depot and Whole Foods allow customers to pay with crypto, using applications that convert it to U.S. dollars.

But it’s not all good news for fans and investors. Recent polling of the news-aware public by Purple Strategies shows mixed feelings on crypto, with 25% sharing a hopeful view, 22% expressing nervousness and 17% indicating outright fear.

Naturally, the excitement has piqued the interests of U.S. Government regulators and elected officials. Both Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell have expressed reservations about cryptocurrencies. Securities and Exchange Commission Chairman Gary Gensler recently told the Senate Banking Committee that the SEC is “working overtime” to create rules to oversee cryptocurrency markets. The White House and the Treasury Department also support imposing sanctions banning cryptocurrency use for ransomware payments.

To regulate or not to regulate is only part of the question. Most of the public recently polled (84%) believes cryptocurrency should be regulated by the government to some extent. Opinions start to split, however, when asked if the government could effectively regulate it, underscoring public skepticism about Washington’s capacity to do so.

Some experts say getting cryptocurrency policies right is ‘the most urgent national-security issue of our time.’ Others have critiqued crypto regulatory proposals in the Senate infrastructure bill, charging that it unintentionally shifts illicit cryptocurrency transactions to markets where the U.S. government has no reach, making it more difficult for law enforcement to protect American companies, government agencies and individuals.

And the public already cites the ‘currency of the future’ as the currency of cybercrime. Crypto’s growing reputation as the currency of ransomware attacks and illicit activity could limit its growth, with 59% of respondents agreeing that cryptocurrency enables illegal activity.

However, fear of crypto’s role in illicit transactions may be countered by a fear of missing out. Industry experts argue that regulations must be carefully considered so as to not stifle innovation. Interestingly, almost half (45%) of survey respondents believe the adoption of cryptocurrency is important to keep the United States competitive in the global economy, while a quarter of respondents are unsure how cryptocurrency impacts the United States’ competitive advantage. This uncertainty creates an opportunity for crypto advocates to address the doubts and define the benefits of their new currencies.

In addition to concerns about evolving regulations, the risk to national security, and crypto’s effect on the competitiveness of the U.S. economy and individual businesses, companies must also navigate the impact disruptive innovations like crypto can have on their Environmental, Social and Governance (ESG) goals. It wasn’t long after Tesla announced it had taken a sizable position in bitcoin that reports began to pop up about bitcoin mining’s hefty energy consumption. The energy and environmental costs associated with cryptocurrencies will complicate how companies integrate cryptocurrency into their business and payment strategies while staying true to their ESG commitments about energy efficiency and the environment.

The convergence of serious reputational risk and significant business opportunity requires that traditional organizational silos come down. We know from our work and through interviews with corporate reputation leaders across industries, in roles at both public and private companies, that forward-looking enterprises are integrating business decision-making with reputation management. The challenge: Too often these responsibilities are siloed off. As more companies staff up their cryptocurrency personnel, they must think through where these leaders and teams sit within the organization. It is also important to take another look at the cross-functional governance model that informs and scrutinizes product development to ensure all potential stakeholder concerns are represented.

Financial innovation is nothing new, especially in the U.S. That doesn’t mean cryptocurrency will be viewed by stakeholders – from the informed public to Beltway policymakers – as an unalloyed benefit to the economy. For companies making major investments in their crypto infrastructure, it will be essential to responsibly condition the environment and prepare their key audiences to advance crypto’s role as a viable, beneficial and stable form of payment. As we’ve seen in our work with clients bringing new innovations forward – whether medical breakthroughs or new technologies and services – it’s critical to avoid surprising policymakers and regulators or those who hold sway over your license to operate and innovate.

Source: Purple Omnibus Survey of the US Informed Public. N=1002.  September 17-20, 2021.


By Crystal Benton |  Managing Director