Tag: Horse Racing

The bloodstock market can be stubborn in its resistance to deviations from the way of doing business that's worked for decades, and even centuries. This is, after all, the same industry that only just widely accepted online bidding at auctions last year because of the pandemic.

Rooted with that knowledge, Fasig-Tipton's announcement on Monday that it would accept payment in cryptocurrency for its upcoming Saratoga Select Yearling Sale was a quantum leap in forward thinking.

For buyers, the new payment method allows for a different way to purchase horses that could potentially expand the buying bench into a bold, tech-savvy pool of new bidders. For sellers, the cryptocurrency option means only as much as they want it to mean.

The short explanation is that sale proceeds will be paid out to the seller by Fasig-Tipton in U.S. dollars, regardless of the currency used by the buyer, unless the seller specifically asks for payment in the company's chosen cryptocurrency class, Stablecoins. All sales will still be recorded in U.S. dollars from the auctioneer's stand and in the official results.

A seller won't be left with a wallet full of Stablecoins if they don't want it, the same way a seller wouldn't be stuck with proceeds in Euros if a horse were purchased by an international buyer. The proper currency conversions are handled as the funds pass through Fasig-Tipton's hands from buyer to seller, as two separate transactions.

Fasig-Tipton president Boyd Browning said the cryptocurrency market has ascended rapidly over the past decade, but its establishment as a legitimate part of the global economy was what made it the right time to establish the new payment option.

Browning hoped the new option, and the incentives tied to it, would perhaps attract a new segment of buyers who might find the high-risk, high-reward investments of the Thoroughbred industry appealing in the same way that they do for cryptocurrencies.

“We hope it's a two-way street,” he said. “We hope some of the folks in the crypto world say, 'This is pretty cool. It's like the Thoroughbred industry is reaching out to us.' I think there's a lot of similar personalities and a lot of similar traits among the people that would be participating in the crypto environment that would find a lot of aspects of Thoroughbred racing interesting and attractive. We would hope to be able to attract, if not new players, then new eyeballs to the racing industry, and hopefully that would convert into participants in the long-term in the auction process.”

Fasig-Tipton will offer 1 million SWAPP tokens to the buyer of the most expensive horse paid for in cryptocurrency at the Saratoga sale. SWAPP tokens can be exchanged for fiat currencies (traditional “paper money”) or other cryptocurrencies.

From Fasig-Tipton's press release announcing the new payment option, Swapp Protocol is a blockchain-based DeFi platform leading a movement to democratize the $1.2 trillion/year data industry by enabling consumers to start getting paid for their online data.

The process for a buyer intending to use cryptocurrency will be similar to one using any other currency. Credit must first be established with Fasig-Tipton, and since the bidding takes place in U.S. dollars, the number on that line would also be in U.S. dollars.

If Fasig-Tipton gets a credit application from a buyer it does not recognize, Browning said the company can verify their crypto assets, the same way it would verify another buyer's U.S. dollar assets or investment funds.

If a buyer wants to pay in cryptocurrency, they then notify the sales office of their intention to do so within the range of their credit window. The buyer will then convert their cryptocurrency of choice into Stablecoins, a class of asset-backed cryptocurrency based on real-world fiat currencies and commodities such as precious metals.

The “Stable” part of the name comes from its relative stability from price fluctuations, unlike other, more volatile cryptocurrencies, and Fasig-Tipton's equine background is just a well-placed coincidence.

“They just have to notify us,” Browning said. “Credit's extended for 15 days for qualified buyers, and we really don't care if they pay in U.S. dollars or cryptocurrency, as long as they pay on a timely basis. Just like somebody would call and say, 'Hey, I need your wire instructions to wire U.S. dollars,' they just have to say, “I need your cryptocurrency account information to initiate the transfer from our crypto account to your account.”

In its early stages, Browning anticipated most of the cryptocurrency activity would come from the buying side, should there be any at all in its initial offering in Saratoga Springs, but he was excited about the prospect of where the concept could go in the near and distant futures.

“We certainly didn't enter the space thinking it's going to be one-off,” he said. “I'm not saying we're forever committed, but we anticipate activity is likely to increase in the crypto world in the next generation, in the next decade. The marketplace didn't exist 10 years ago, and it's become a prominent financial marketplace in 2021, and I think based on what we see and read in the trends in popularity, it's likely to grow in popularity, instead of diminish.”

The post What Does Fasig-Tipton’s Entry Into Cryptocurrency Mean For Buyers And Sellers? appeared first on Horse Racing News | Paulick Report.

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