What’s a new year without resolutions and plans?
Not me. Waiting for a new year to make change ensures your plans are destined to fail for most. Resolutions are daily occurrences, because change needs to be constant. That being said, I am not opposed to having a little fun taking a shot at predicting how some of the most hotly discussed technologies, industries, geopolitical tussles and plights might pan out over the next 365 days. Here goes:
Crypto-Asset Regulation – Without regulation, there is destined to be more of the same uncertainty and instability. A good analogy for how important regulation is can be found when comparing a company like TransferWise to a pseudo-legal hawala money changer. Both operate by holding “fund floats” in multiple countries and multiple currencies. So when you want to move Indian Rupees to US Dollars for example, funds don’t move, value does. Funds move hands locally, while the company (TransferWise) or hawala money changer (dude on the street corner) balance their accounts internally. Why does this matter? Quite simply, regulation provides protection and recourse to the customers of businesses. This is essential when it comes to any form of currency. This is an ESSENTIAL piece of the puzzle that the crypto-economy is missing, and I have no doubt that if regulation does happen this year, we will see a resurgence in the entire space back to their highs of December 2017.
Security Tokens (STOs) – If the last two years represented the emergence of Utility Tokens, then 2019 is the year that STOs will take over. We are still to see the biggest coins of the crypto-economy, and they will come, soon. Regulation is one of the key reasons that we will see such strong growth in this space. Consider this – without the wild appreciation in price of tokens like Bitcoin, Ether, Ripple and so on, what real value did buyers have? You didn’t own any part of the business. I always explain it to people unfamiliar with the space, that all you are really just able to buy into is the vibe of a blockchain-based business with crypto today. STOs will change all of that, and by doing so, will bring in everyone from your grandma’s mutual fund to savvy investors who have stayed clear of the space for this very reason. Now when investors are able to have the same equity participation as buying a stock off the Nasdaq, suddenly every project issuing a token will have a whole new set of eyeballs looking at it, and that’s just great!
Mobile Everything – From ride sharing, odd jobs, food, to banking, micro-loans and micro-insurance – everything is and will continue to be mobile first. We see this in countries like the Philippines, where a population of 100m has 70% unbanked, less than 4% of transactions being online/digital, but over 60% of the population having smartphones. The opportunity is ripe, and any company with a dogged focus on mobile-first will find its playground not just in the Philippines and other South East Asian countries like Indonesia, Vietnam and India, but across the world as we see a surge in digital-literacy that will only deepen in the next 10 years.
Wallets – Yes, this one is close to my heart, but is a reality that fits in line with the mobile first world we live in. As our lives have become our smartphones, and our smartphones are our apps, we will see a dramatic rise in in-app wallets within the apps we use on a daily basis. The separation of where we store our money (banks) and where we spend our money (apps/online) will fade further, and this makes complete sense. The ease with which our money will move through our lives is what is key to this evolution. It is taking away the friction that has weakened the mobile first ecosystem.
Interoperable Everything – We use one passport to travel the world. It identifies us as individuals and thereby enables us to travel the world with relative ease. The global Passport system accepted around the world is probably the best example of how “different” does not exclude entry and use. The same collaborative and unifying experience is coming to your smartphone. As identity verification becomes more robust and less fallible, so does the fluidity of the technology in your life. It will impact even the in-app wallets we use today.
Interoperable Wallets – Take the Grab wallet today, or the DBS Paylah wallet, or the GoJek wallet, or the PayTM wallet, or the non-existent Uber/Instagram/Snap wallet. The walled garden approach to stored value will be a thing of the past very soon. The only thing that a closed wallet achieves today, is to ensure that a user will only top up that wallet when there is a specific need, and all other times, it will remain unused or with a minimal balance. That’s why the global wallet balance is under $3. Once companies start to realise that when you drop those barriers and reduce the friction for a user to move their funds around, they will be MORE likely to move money through and into your wallet, thereby creating more and more opportunities to interact financially.
Bye Bye, Remittance – Hello Small-Value Transfers – This is perhaps the clearest for all to see. The beginning of the end of the remittance industry is already here. Rates/fees and speed for remittance is already coming down at a rapid pace. Banks and fintechs are competing for the business, but it is an industry that I see dissolving within the next 3-5 years, tops. Consider this very straightforward scenario: You and your friends, family use a messenger or social app to communicate no matter where in the world you live. Tomorrow, this app updates such that you can send money for 1-2% from one country to another, from one currency to another, instantly; within your same chat window. Why would you even switch to your bank’s app to send the funds. This is a reality that will be upon us soon. It will be the end of remittance, but will be a catalyst to a new world of small-value transfers. Where remittance is a $600 Billion sub-economy, we are talking about in excess of $10 Trillion that does not even exist today.
The Global Economy – There are strong signs for a global recession. The real driving force behind it is the slowing of monetary stimulus across some of the largest economies in the world. This has a cascading effect on many parts of the economy, such as lending by banks, who are the first to clamp down. Weakening property markets, margin calls on diving stockmarkets. The inability for businesses to get loans ends up further slowing the opportunity for economic growth. With geo-political unrest such as the US-China trade tussle, the backlash towards Saudi sovereign investment around the world, good old Brexit which is the most likely bungling to take place in Q1, all push risk to a point of immobility. Stagnation is the world thing that could hit the world. It stifles innovation as risk appetites change. Everyone retreats to their safe corners when all we should be doing is plowing forward. It is my humble opinion that in a world with so much friction, so many have-nots, and so much inefficiency, that there should never be a reason to see negative growth in any country. This is the biggest downfall to capitalism, in that it often shoots itself in the foot.
The Environment – If you think global warming, natural disasters and climate change are not really happening to you, then you are mistaken. Worse still, these changes have a significant impact on the world’s largest industry, agriculture. As crops fail or are drowned out by too little or too much rain, as the soil composition changes causing the need for more additives into our foods, these all have lasting effects on the world we live in. We do not live in a world where farm to table exists at scale. This means that one year of bad crops is seen with a sharp change in price at your local supermarket. This often goes unnoticed by most people, but it still happens to you. In countries like India, the shortages become an opportunity for opportunistic middle-men and wholesalers to cash in. Your salary, or that of a poor person, doesn’t rise to help adjust for those increases. It has a very direct impact on the kind of food people can put on their plates to feed their families. I, for one, do whatever I can to reduce my water, plastic and meat intake. It matters. Spending more on food means spending less on everything else.
Who really knows what 2019 will bring. These are just some of the topics that I view as important and relevant to keep the world turning.