In October 2018, the United Kingdom’s Financial Conduct Authority (FCA), published a joint report, alongside the Bank of England & Her Majesties Treasure, as part of a domestic task-force on cryptocurrencies and cryptoassets.
This report highlighted many issues and risk factors associated with cryptocurrencies and cryptoassets. It did not favour’s for cryptocurrency and those who are knowledgeable about cryptocurrency or are heavily involved with crypto, are claiming that the report is flawed and has been conducted by people with a lack of knowledge or experience of cryptocurrencies.
The report highlighted, what they claim are many risks associated with cryptocurrency. The report claims that there are risks when it comes to market integrity and financial crime. The findings in the report also claim that there is a lack of credible evidence to suggest that there is rapid consumer usage when it comes to cryptocurrency.
As a result of this report the FCA commissioned 2 pieces of research into cryptocurrencies and cryptoassets. They hired British research firms Revealing Reality & Kantar TNS to conduct this research on the UK public.
The FCA wanted to understand what people’s motivations, attitudes, beliefs and understandings were when it came to cryptocurrencies and crypto assets. They wanted to know what drove people to purchase and use different cryptocurrencies.
Their first report conducted by Revealing Reality, interviewed 31 cryptocurrency users, asking them to share their experiences and information. After this, 17 of those users were selected for follow up interviews.
Kantar TNT then published a second report after surveying 2,132 UK consumers, asking them a wide ranger of questions relating to cryptocurrencies to gage their understanding and awareness of cryptoassets and their crypto purchasing habits.
Both reports did no favours for cryptocurrency users and is a very bad signal for how the government in the UK will view cryptocurrencies going forward.
The reports claim, that many consumers see cryptocurrency as a fast-track to easy wealth. The report stated that people involved in crypto, believe that crypto is a shortcut to easy wealth and money. They state that social media and influence from cryptocurrency users are often a motivation for people purchasing crypto as a ‘get rich quick’ scheme. Revealing Realities’ claimed that consumers do not fully understand what they are purchasing, They said that people often lacked knowledge of cryptoassets and many people wanted to buy ‘whole coins’ and did not understand they could buy part of a cryptocurrency and didn’t have to purchase a ‘coin in full’.
They also claim that people often believe they are investing in a tangible asset as they often associate the words ‘mining’ and ‘coin’ with a physical product and as such are of the belief that most consumers think they are investing in a physical product.
The Kantar TNS research wasn’t any better. They claim, among many other things, that consumers don’t do any research prior to purchasing cryptocurrency and consumers are driven to purchase crypto from a ‘few influential recommended sources. They claim that crypto investors are aware of the risks involved in purchasing crypto but state that this risk is part of the appeal and attraction to cryptocurrency.
Both reports conclude that, for the most part, UK consumers do not know what cryptocurrencies are, or lack knowledge or experience, when it comes to crypto and cryptoassets. They claim that this conclusion is accurate as those that they surveyed were unable to define what ‘cryptocurrency was’. They also state that crypto users often distrusted the mainstream media.
The research ends by saying; consumers in the UK who purchase cryptocurrency, often spend under £200, they also conclude that consumers who haven’t bought crypto in the UK are unlikely to ever do so.
For those who are knowledgeable about crypto and blockchain technology, it is easy to see the amount of flaws in these report. Many UK crypto investors are disappointed by this research and claim that it was doomed from the outset.
The reports were commissioned by an organisation that had little understanding or knowledge of crypto. The research firms that were asked to survey the public also had a poor knowledge or experience of crypto and blockchain technology.
Their research focused on a small number of crypto users and seems to have only followed up on the users who were inexperienced or un-knowledgeable about crypto and blockchain.
For many of us, the findings do not come as a surprise, after all, the financial conduct authority works hand in hand with UK banking systems and this report specifically was also commissioned by the Bank of England, both of these financial institutions are threatened by crypto and blockchain technology and as such many people find the findings, research and reports commissioned by these financial intuitions as heavily biased and flawed.
Rickeo is a freelance journalist, writer & digital marketer. Rickeo has an avid interest in crpto and blockchain technology. If you'd like to work with Rickeo please feel free to reach out to him via his Linkedin profile.