The importance of reputation and trust for companies in the digital assets space

Traditional financial investors are recognising the opportunities in this space and a substantial number now have allocations to digital assets in their portfolios. Global banks are setting up their own digital asset working groups, trading desks and custody businesses, while the payments industry is keeping up pace by the launch of offerings catering to the demand for crypto. Regulators too are finally acknowledging the need for a framework which will recognise digital assets. As the International Monetary Fund (IMF) said, “A global regulatory framework will bring order to the markets, help instil consumer confidence, lay out the limits of what is permissible, and provide a safe space for useful innovation to continue.”[2]

But while the market is growing and maturing, there is no doubt that the past year has been a volatile period for the digital assets industry, set against the backdrop of a bear market in cryptocurrency pricing following the highs of late 2021. Recent turbulence in the market has brought governance squarely into the spotlight, and spurred a new wave of questions about trust, regulation and best practices.

Despite this volatile backdrop, the central question has shifted away from “Are digital assets here to stay?” towards “How will the digital assets ecosystem be regulated, and will it (and can it) sit within the traditional financial system?”

The trusted voice in a crowded room

While the demand for digital assets presents a magnitude of opportunity for businesses, integrity and trust are key when communicating to external stakeholders. How do you create trust and how do you cut through the noise of uncertainty? How do you protect your reputation and promote your business in a market which is rapidly evolving and still not well understood?

Here are some points to consider when building your profile while managing your reputation:

1. Develop a clear story and communicate it in the right way:Education and clarity is key in this sector. With stories of big retail trading platforms and the volatile price movement of cryptocurrencies dominating the news agenda among top tier publications, the view of ‘crypto’ for someone unacquainted with the sector may be a relatively narrow one. They may not recognise the breadth of the digital asset ecosystem, or the potential applications of blockchain technology outside of cryptocurrencies. If how you explain your ambition, strategy or offering is muddled or difficult to understand, or your tone does not chime with the audiences you need to reach, it can have a detrimental reputational or commercial impact.
2. Ensure your website and corporate materials are authentic and educative: A crucial first step for any business, particularly those at the start-up or scale-up stage, is to examine its profile on digital channels. Ultimately, the website will act as a ‘hub’ for clients, investors, journalists and potential employees seeking information on the company. It is your chance to tell your story as you want to tell it and highlight your differentiators.
3. Share your knowledge and demonstrate expertise: Although the news relating to digital assets is dominated by regulation and scandals, despite (or perhaps because!) of this, engagement with traditional media is more crucial now than ever before. The number of journalists at top tier publications who have crypto or fintech as part of their dedicated remit has grown rapidly, and publications have created their own crypto newsletters or website sections. These journalists, many of which are new to covering the space, are seeking contacts who can provide them with useful insight amidst this flood of technical terminology and fast-moving news flow.
4. Engage with regulatory development: regulatory landscape for cryptocurrencies and digital assets is rapidly evolving across multiple jurisdictions and we have seen significant steps forward here in recent years – whether this be the passage of the Infrastructure Investment and Jobs Act in 2021 in the US, or the EU’s MiCA regulation which is due to be implemented in 2024. In the UK, in 2023 we have already seen the Government launch consultations on cryptoassets and on the digital pound as a step towards a new regulatory regime. Participating in conversations across the regulatory landscape will inform the debate and help establish a group of ‘trusted voices’ among a sea of new entrants.
5. Amplify and engage on social: LinkedIn is now regarded as the most influential social media channel among corporate and investor audiences. Interestingly, we are also seeing an increasing amount of journalist enquiries coming directly to spokespeople through the platform. It is a fantastic way to demonstrate insight and expertise and having your say on the topics on which you want a share of voice.

Although it may seem counter-intuitive to raise your head above the parapet at a time of such uncertainty and change for the industry, forging relationships often is easiest and most effective at the point where education and insight are most needed.

References

[1] https://www.statista.com/outlook/dmo/fintech/digital-assets/worldwide

[2] https://www.imf.org/en/Publications/fandd/issues/2022/09/Regulating-crypto-Narain-Moretti