FFCON21 Breaking Barriers May 11-13, 2021

Cryptocurrencies Aren’t An Alternative. They’re Here to Stay.

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Fintech Confidential | Jason Butcher, CoinPayments | march 14, 2021

Cryptocurrencies are here to stay - Cryptocurrencies Aren’t An Alternative. They’re Here to Stay.

2020 is winding down and it’s been a hectic (and often tragic) time for so many of us around the world. Throughout the year, we’ve seen some industries struggle while others thrived. Out of this uncertain time, it’s important to note the incredible shift toward technology-enabled financial services. As a longtime payments and blockchain entrepreneur, I’m convinced we’ve reached a real moment in driving awareness and adoption in digital currencies as more people live their lives increasingly online.

This year alone, we’ve seen massive progress in the multi-billion dollar crypto market that can no longer be ignored: bitcoin soaring above US$15,000, leading fiat payment processors jumping on the crypto bandwagon and rising use among people from every part of the world.

It’s called the “future of money” for a reason. Cryptocurrencies have cemented themselves as a means of exchange for our global, digital economy.

Better regulatory frameworks, better processes

Historically, one of the biggest barriers to entry for cryptocurrencies has been mistrust and a lack of knowledge among regulators. It’s understandable. With more than 2,000 different types of cryptocurrencies now on the market, ambiguous and unclear guidance from governments has resulted in slow institutional adoption. But that tide is turning.

With broader global adoption and a better understanding of the technology behind cryptocurrencies, regulators are now equipped to build solid frameworks that actually work for the crypto community.

See:  Crypto mass payments is best retail option; report suggests

Take KYC (Know-Your-Customer) processes as an example. Early on, there was a strong perception that KYC would only hinder (and not help) sales because it added another layer to the buying process. Instead, we’ve seen the opposite through streamlined and straightforward KYC.

That is why we have put security and transparency at the heart of our agenda to build a fully compliant platform and more importantly, to pave the way for mass adoption in a sustainable way.

The crypto community drives choice

Freedom of choice is a significant part of the crypto community and it has shifted the balance of power into the hands of the consumer. At CoinPayments, we work hard to meet that need by supporting more than 1,900 cryptocurrencies. We feel it’s a critical part of how we drive adoption among an increasingly diverse user base.

Just look at this chart below. While bitcoin still represents approximately 85% of transactions, we are seeing an increased interest in stablecoins, both globally and in the U.S. In APAC, 50% of CoinPayments merchant transactions were in stablecoins over the last year.

APAC all about stablecoins - Cryptocurrencies Aren’t An Alternative. They’re Here to Stay.

Source: Coinpayments

Fortunately, major fintech players including PayPal, Square, Revolut, and Robinhood are taking notice. Even Visa is moving into the space with its Ternio and ZenGo partnerships. This is the type of traction that will drive a rapidly rising level of adoption.

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The next adoption wave

It’s only a matter of time before the biggest ecommerce platforms like Amazon and eBay embrace digital currencies. This is the moment we’re all waiting for within the payments industry and it’s happening at a lightning-fast pace. It’s hard to believe credit cards took 50 years to gain mass market appeal while bitcoin is just 11 years old.

Take this chart from a recent report on CoinPayments merchant activity:

growth of crypto in North america - Cryptocurrencies Aren’t An Alternative. They’re Here to Stay.

This is the story of cryptocurrencies as a form of payment right now. Will the trend always be up? Likely no, but we have a long way to go before it slows. Continue to watch for major announcements around new ecommerce platforms and brands opening their businesses to digital currencies.

The importance of education and advocacy

While the case I’ve laid out for mass adoption of cryptocurrencies as a form of payment seems inevitable, it’s important to note that this is a movement that requires continuous support and education.

See:  Has COVID-19 made cryptocurrency more attractive for digital payment and investment?

In the coming years, we’ll see regulatory challenges and adoption hurdles, which is why we’ve made advocacy a priority at CoinPayments. That includes regular innovation with our own products and services as well as industry-focused initiatives like with NCFA in Canada, and our recent partnership with Celo Alliance which is focused on driving financial inclusion through cryptocurrencies. Through collaboration, we’ll work directly with leading charitable organizations to drive awareness and adoption in developing economies.

In a world where 1.9 billion adults remain unbanked, don’t underestimate the importance of financial innovation to help businesses and individuals realize their full economic potential. That underlying need is exactly why we think cryptocurrencies are no longer a fringe solution.

About CoinPayments

CoinPayments logo - Cryptocurrencies Aren’t An Alternative. They’re Here to Stay.

CoinPayments is an integrated payment gateway for cryptocurrencies.  It is the preferred cryptocurrency payment platform for merchants like Overstock and Quantfury, as well as ecommerce platform providers like Shopify and OpenCart.

Fintech Confidential issue 3 cover 1 - Cryptocurrencies Aren’t An Alternative. They’re Here to Stay.

This article appears as a featured article in NCFA's digital magazine, Fintech Confidential (Issue 3). Click to read the latest thought leadership, insights and trends about Fintech in Canada:

Checkout NCFA's digital magazine, Fintech Confidential (Issue 3, Dec 2020) --> here

 

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