In a recent interview with the Innovation Show, DNotes Global Inc. CEO Alan Yong stressed the important role that trust plays within the digital currency industry. During a discussion that covered a wide range of cryptocurrency-related issues, he addressed everything from digital currency’s original promise to the current state of the industry and the challenges it confronts as it continues to grow and mature.
Yong, the author of the book Improve Your Odds: The Four Pillars of Business Success, began by explaining how digital currency differs from the fiat money used in the current financial system. He cited clear benefits like the inability to spend more than a person has in his or her account, and the transparent, immutable nature of transaction records on the blockchain.
Yong also observed that the current centralized system is rife for abuse. He pointed to the common practice in the political world, where politicians vie for votes using promises that require ever-larger expenditures of public money. Yong noted that this often leads to the creation of more fiat money to finance those expenditures, devaluing existing currency in the process and leading to mounting debt. That problem is avoided with digital currency since its creation is governed by algorithms rather than centralized considerations and political pressure.
In response to a question from the host about how digital currency will deal with opposition from entrenched forces within the existing financial order, Yong pointed to the technology’s disruptive potential:
“I believe that challenge will continue, because digital currency with its underpinning blockchain technology, as I said, is going to allow us for the first time to do a lot of things without the participation or control of the central authority. It is going to be very disruptive in that it will allow us to do a lot of things that our governments were used to in controlling us. It will also be especially disruptive to the financial services industry – the credit cards, the banks, the debit cards and so on.
And there will be a lot of pushback. We have seen it all – well, we haven’t seen it all, we have seen a lot of that! People like JP Morgan Chase’s CEO who called Bitcoin a fraud. No, it is not a fraud. It is something that is going to be very disruptive to their banking and financial system where they are able to extract a lot of fees – a lot of those are definitely legitimate – but, on the other hand it’s because we don’t have another choice. When there’s no options or choices, we basically have to live with it.”
Mr. Yong cited high credit card interest that can approach 29% as an example of the types of “outrageous” fees that consumers are often unable to avoid. He then predicted that change is coming, in the form of competition:
“What is going to happen is there is going to be a choice that people no longer have to use most of the financial services that we are accustomed to from the banking system. Of course, they won’t like it. Of course, they will push back. But I believe that the best way to do it is like what DNotes has been doing. That is, to do it very slowly rather than jumping into it and making a lot of claims that you cannot deliver.”
According to Yong, the digital currency industry hasn’t lived up to its promise of being better than the existing banking system and has turned out to be worse in many respects – including the emphasis on quick profits that are enjoyed by a relatively small group of people.
After the host described the trust problems in today’s crypto industry and DNotes’ solution to create more trust, Yong reminded listeners that digital currency was originally created to counter the abuses and excesses of both government and the financial industry – something that it has thus far failed to accomplish. The DNotes Global CEO suggested that much of that failure was due to the ease with which anyone can launch a new cryptocurrency, something that has led to many bad actors entering the industry.
Yong recounted how he seriously considered digital currency’s true purpose before launching the DNotes currency, with an emphasis on its ability to help those who can least afford to suffer the abuses inherent in the current financial system:
“[We] decided that in order to carry out the original vision, we have to build a solid foundation of trust. After all, I think we all can agree trust is invaluable in financial services.”
The nearly 53-minute interview is available in its entirety on the Innovation Show website.