Since the early days of cryptocurrency, the fast-growing and passionate community behind this novel financial instrument has been on a mission to ensure wide scale mass adoption. In the last few years, there has been a significant increase in institutional support for cryptocurrency and new products such as margin trading and crypto lending. This is all by design, to encourage more participation within the cryptocurrency trading market. In 2020, DeFi made waves for creating new and improved ways for cryptocurrency to be included in the global financial landscape; offering appealing new features for investors. And despite all of the community’s efforts thus far, the key to mass crypto adoption still lies not only in institutional support for the industry, but in ensuring individual accessibility as well amongst the global community. In other words, cryptocurrency will not be widely accepted until people can access and spend it as easily as they do with tried and true fiat currency.
The jury is still not out on if cryptocurrency should be treated as legal tender, an investment or both. While there has been a huge advantage to positioning cryptocurrency as the next big asset class, especially during times of uncertainty like the one we’re in currently with a global pandemic; the bigger picture must be taken into account. If the public perceives cryptocurrency as an asset class, consumers will not want to spend it as a currency. This means that widespread cryptocurrency use with current market conditions is unlikely to occur since far more people use legal tender than invest in assets. This is coupled with the often-volatile price of cryptocurrency on the market, which is another significant challenge.
There are already efforts in place by crypto-focused firms to connect cryptocurrency use to everyday consumption such as the use of e-commerce platforms. Plutus for example, is a FinTech start-up which recently announced a promotion for their followers that tied in with Amazon Prime Day; a massive e-commerce event during which the site offers crypto back to their users. On their website, they announced:
“Starting today, we are jumping in on the action to offer you a massive 10% crypto reward on any, and all, Amazon purchases. This comes on top of any existing discounts/sales applied by Amazon, meaning savings could be in excess of 60%.”
Furthermore, the promotion was available to all users regardless of how much of their native token, PLU, they had staked. The reward was to be redeemed through the use of the Plutus card for purchases at checkout. Aligning cryptocurrency with such a popular and established e-commerce event not only encouraged cryptocurrency use, but aided to improve its public perception as well.
Cash and credit cards have been working just fine for merchants over the years, and crypto adoption carries the risk of volatility and also requires a need to educate people on its use, which is proving to be a cumbersome process. A proxy solution was introduced back in 2015 in Plutus’ white paper, which outlined the details of how to enable users to spend Bitcoin at over 40 million merchants using the current banking infrastructure. It was a way for customers to spend in crypto using a debit card, and for the merchant to receive their preferred method of payment; cash in the bank without any additional onboarding. The concept was introduced by the founder of Plutus, Danial Daychopan, who recently announced the team’s plans to obtain a banking license in order to scale their business into Asia and Latin America and provide brand new banking features for members of the crypto ecosystem. By obtaining such a license, Plutus will be positioned to eliminate one of the biggest roadblocks faced by crypto firms and allow for seamless adoption by merchants worldwide. Should this strategic move prove to be successful for Plutus, more crypto firms might follow suit and create an industry-wide snowball effect towards increased adoption.
Marcus Henry is an American Journalist with over 12 years working in the tech industry. He has been actively involved in the crypto community for the past three years and currently works out of Austin, Texas. He covers breaking news, writes perspective pieces and reflections, and conducts interviews with industry professionals and community members. Follow Marcus Henry on Twitter- @MarcusHenryHODL
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