Alternative finance is booming in the UK. The sector has doubled in size over the past year.
This will only increase as new regulation allows institutional investors to join the party.
Digital currencies, in particular Bitcoin, are equally lauded, offering the chance to cut regulators and central banks out of the money market altogether.
Pick up virtually any national newspaper and there will be an article extolling the potential for alternative finance to replace whole swathes of traditional banking.
But over recent months, it feels like the sector has reached a cross-road in how it is perceived and reported.
More and more questions being asked about whether it’s all too risky for customers, who often have little investment experience.
Last week, the Financial Conduct Authority (FCA) expressed new concerns about whether equity crowdfunding should be open to ordinary investors.
The regulator also looks set to publish recommendations on bringing digital currencies into its framework for the first-time.
At a Parliamentary event last night hosted by think-tank Respublica, Steve Baker, Conservative MP for Wycombe and bitcoin enthusiast, called it a “red pill, blue pill” moment.
In The Matrix film Keanu Reeves’ character Neo is offered a choice. The blue pill allows him to stay in the pleasant illusion of a generated world. The red pill leads to his escape into a truthful but unpalatable reality.
So it may be with alternative finance.
Take the red pill - forget all the evidence of the benefits around alternative finance, and regulate it out of existence, much like has happened in America.
Or take the blue pill - leave the industry alone to flourish and we can all benefit from a diverse, competitive, decentralised financial services sector.
Whatever your view, there is little doubt that businesses making up the alternative finance space have a pressing challenge to explain themselves better – to customers, to regulators, to the media.
The halo effect of being a “disruptor” has dimmed, replaced with stories of investors losing money, or worse, being ripped off.
Platforms need to get on the front foot, talking proactively about their principles and how they’ll protect customers.
This may be a positive development. It may weed out the rogue operators.
But those like Steve Baker worry that the FCA will simply prescribe the red pill with little regard to the impact. This nascent industry is now in a real fight.