In this article, we analyze the future of the cryptocurrency industry.
12 years ago and earlier, no one knew the meaning of the word "cryptocurrency". Just 5 years ago, it was associated only with Bitcoin. In 2021, there are about 2,300 types of digital currencies. This payment method is confidently moving offline and claims to be a full-fledged type of payment, along with fiat currencies.
Initially, crypto finance was conceived as a democratic and open form of payments, serving as an alternative to centralized financial systems. While this is not easy so far, major world leaders are showing an increasing but still cautious interest in crypto. Corporations and Foundations such as Morgan Stanley are actively diversifying their investment portfolios with cryptocurrencies. MS is considering investing $ 150 billion in cryptocurrency, and MicroStrategy acquired BTC for another $ 15 million in March, and the company's total investment reached $ 2.186 billion.
Also, trends are set by global giants such as Amazon, Google, Microsoft, PayPal. So, recently Jeff Bezos announced the possibility of paying for purchases on the platform with bitcoins, through Purse.io, while the international G-search engine updated the API for working with payment systems and added cryptocurrency as a digital payment method. And the Windows operating system and X-box solutions can also be purchased with digital coins. Americans are actively introducing crypto in p2p transfers: PayPal customers from the United States can use Bitcoin, Ethereum and Litecoin for payments.
Another important aspect is legislative regulation - it acts as a driver of volatility, and can also lead to the strengthening of the position of the crypt. For example, in Singapore for a year now there has been a full-fledged legislative regulation of crypto companies and currencies, as well as registration in the MAS system and obtaining licenses to carry out activities. In Estonia and other Baltic countries, a separate crypto-legislation has been developed, which successfully functions and makes these countries a "paradise" for such operations. At the same time, President of the Swiss Blockchain Federation Heinz Tannler promises one of the most advanced regulatory frameworks in the world in 2021.
Malta, Austria, Luxembourg and Switzerland are beneficial in terms of taxation and transactions with digital currencies: they are all actively adapting legislation and developing tax regulations for the full circulation of cryptocurrencies.
I can responsibly declare that so far the European Union has one of the friendliest attitudes towards crypto and digital assets in general. For example, Sweden has finished testing the digital crown, and in progressive Germany, such financial assets are not subject to taxation, but at the same time are considered private property, which makes the country a cryptocurrency tax haven, and the EU itself is thinking about a single digital euro.
In China, on the contrary, the authorities stop crypto activity in every possible way, blocking exchanges, prohibiting mining and ownership of assets abroad. Except for Hong Kong, where residents can still register a digital wallet and use e-currency for payments in Shenzhen City, located on the border of the administrative region and Guangdong province in southern China. Such a policy of the Middle Kingdom significantly influenced the MTC exchange rate in the first quarter of this year.
As for the United States, the new legislation allowing banks to open cryptocurrency accounts and store customer funds in cryptocurrency is a real breakthrough that is likely to be introduced in Europe as well.
Also, leading blockchain companies began to hire ex-political officials and employees of financial regulators to optimize their activities. For example, in March, former US Senator from Montana, Max Baucus, was appointed advisor to the Binance crypto exchange. The transfer of the former head of the Commodity and Commodity Futures Commission (CFTC) Christopher Giancarlo to the board of directors of the BlockFi blockchain platform was also significant. Such actions indicate the desire of companies to develop the American crypto market.
But digital assets still have a long way to go in establishing and shaping an understandable and accessible ecosystem for even greater penetration offline.
12 years ago and earlier, no one knew the meaning of the word "cryptocurrency". Just 5 years ago, it was associated only with Bitcoin. In 2021, there are about 2,300 types of digital currencies. This payment method is confidently moving offline and claims to be a full-fledged type of payment, along with fiat currencies.
Initially, crypto finance was conceived as a democratic and open form of payments, serving as an alternative to centralized financial systems. While this is not easy so far, major world leaders are showing an increasing but still cautious interest in crypto. Corporations and Foundations such as Morgan Stanley are actively diversifying their investment portfolios with cryptocurrencies. MS is considering investing $ 150 billion in cryptocurrency, and MicroStrategy acquired BTC for another $ 15 million in March, and the company's total investment reached $ 2.186 billion.
Also, trends are set by global giants such as Amazon, Google, Microsoft, PayPal. So, recently Jeff Bezos announced the possibility of paying for purchases on the platform with bitcoins, through Purse.io, while the international G-search engine updated the API for working with payment systems and added cryptocurrency as a digital payment method. And the Windows operating system and X-box solutions can also be purchased with digital coins. Americans are actively introducing crypto in p2p transfers: PayPal customers from the United States can use Bitcoin, Ethereum and Litecoin for payments.
Why should you consider cryptocurrency payment methods?
- According to the forecasts of research organizations Juniper Research, the volume of cross-border cryptocurrency payments in the next four years will increase 25 times - to $ 4.4 trillion in 2024. Accordingly, implementing such a solution means becoming one step ahead of competitors. In the fintech spaces, information has also appeared that the electronic payment systems Samsung Pay and Google Pay will add tools for working with cryptocurrency, although the manufacturers have not yet given official comments on this matter.
- Expand your audience. Thus, the international payment system Mastercard announced plans to implement support for some cryptocurrencies in its network in 2021, based on an internal study that showed that about 40% of consumers from 18 countries of the world plan to use crypto as a means of payment next year. Among respondents, 77% of young people are interested in learning more about digital assets. This is a direct opportunity to get yourself the most progressive clients. A prime example is the crypto.com app, which has acquired a PS VISA membership.
- Despite the high volatility, the lack of guarantees of support by states and other goodies of fiat money, crypto payments are about freedom: here both a client from Singapore and Venezuela are absolutely equal, as well as significantly lower commissions in comparison with traditional payment systems, especially on large amounts.
What difficulties do I see on the way to reducing the volatility of cryptocurrencies and their full implementation?
The creation of understandable ecosystems around them, as well as an increase in the digital literacy of the population, will help increase the liquidity of digital currencies. So, in the survey from Mastercard I mentioned above, 77% of the respondents surveyed expressed an interest in learning more information about digital assets, and 75% of them agree that they would use crypto if they understood it better. Accordingly, progress will begin with an increase in the level of IT and digital literacy of the population.Another important aspect is legislative regulation - it acts as a driver of volatility, and can also lead to the strengthening of the position of the crypt. For example, in Singapore for a year now there has been a full-fledged legislative regulation of crypto companies and currencies, as well as registration in the MAS system and obtaining licenses to carry out activities. In Estonia and other Baltic countries, a separate crypto-legislation has been developed, which successfully functions and makes these countries a "paradise" for such operations. At the same time, President of the Swiss Blockchain Federation Heinz Tannler promises one of the most advanced regulatory frameworks in the world in 2021.
Malta, Austria, Luxembourg and Switzerland are beneficial in terms of taxation and transactions with digital currencies: they are all actively adapting legislation and developing tax regulations for the full circulation of cryptocurrencies.
I can responsibly declare that so far the European Union has one of the friendliest attitudes towards crypto and digital assets in general. For example, Sweden has finished testing the digital crown, and in progressive Germany, such financial assets are not subject to taxation, but at the same time are considered private property, which makes the country a cryptocurrency tax haven, and the EU itself is thinking about a single digital euro.
In China, on the contrary, the authorities stop crypto activity in every possible way, blocking exchanges, prohibiting mining and ownership of assets abroad. Except for Hong Kong, where residents can still register a digital wallet and use e-currency for payments in Shenzhen City, located on the border of the administrative region and Guangdong province in southern China. Such a policy of the Middle Kingdom significantly influenced the MTC exchange rate in the first quarter of this year.
As for the United States, the new legislation allowing banks to open cryptocurrency accounts and store customer funds in cryptocurrency is a real breakthrough that is likely to be introduced in Europe as well.
Also, leading blockchain companies began to hire ex-political officials and employees of financial regulators to optimize their activities. For example, in March, former US Senator from Montana, Max Baucus, was appointed advisor to the Binance crypto exchange. The transfer of the former head of the Commodity and Commodity Futures Commission (CFTC) Christopher Giancarlo to the board of directors of the BlockFi blockchain platform was also significant. Such actions indicate the desire of companies to develop the American crypto market.
Cryptoindustry development forecasts
In general, the digitalization of payment methods is inevitable, as well as global changes predicted by futurists - the whole world will change and be “digitized”. In industry, aviation technology, space, we are already seeing robots and technology displacing humans. Also in the financial sphere: advanced countries do not want to lose profits and, for their part, are trying to adapt legislative norms as quickly as possible. But I am convinced that for a full-scale replacement of classic money, several factors are needed: there must be something real behind it, technology must become firmly established in everyday life, and digital money must be easily applied in everyday life. So far, no state is ready to give up the exclusive right to issue banknotes. We can say that there is a high probability that that cryptocurrencies will occupy a niche between gold and classic currencies - as instruments for accumulation of funds and exchange transactions. On May 24, it became known that the founder of the hedge fund Bridgewater Associates, Ray Dalio, owns bitcoins. According to the well-known investor, under the current conditions, the main cryptocurrency looks like a more attractive store of value than gold. Also on this day, another major player, Goldman Sachs, recognized bitcoin as an asset class, which is in the adoption phase and has already begun the formation of a cryptocurrency trading department. And JPMorgan will allow its clients to invest in digital currencies in the second quarter of this year. in the current environment, the main cryptocurrency looks like a more attractive store of value than gold. Also on this day, another major player, Goldman Sachs, recognized bitcoin as an asset class, which is in the adoption phase and has already begun the formation of a cryptocurrency trading department. And JPMorgan will allow its clients to invest in digital currencies in the second quarter of this year. in the current environment, the main cryptocurrency looks like a more attractive store of value than gold. Also on this day, another major player, Goldman Sachs, recognized bitcoin as an asset class, which is in the adoption phase and has already begun the formation of a cryptocurrency trading department. And JPMorgan will allow its clients to invest in digital currencies in the second quarter of this year.But digital assets still have a long way to go in establishing and shaping an understandable and accessible ecosystem for even greater penetration offline.
