Cryptocurrency's Rising Influence: Transforming Financial Transactions and Expectations
Summary:
This article discusses the increasing role of cryptocurrencies in financial transactions, with the Swiss city of Lugano highlighted as a place where 15% of the population use the city's LVGA stablecoin on a daily basis. While traditional payment systems remain dominant globally, technological advances and collaboration efforts by major companies have pushed crypto acceptance closer. Additionally, institutions accepting Bitcoin for payment and the provision of crypto payment solutions by companies like Coinbase are contributing to wider adoption. Despite the strides made, several hurdles including regulatory changes and user acclimatization exist, but forecasts suggest that digital wallet usage could reach 75% by 2025. A future where traditional banks offer loans in altcoins is also envisioned. The article concludes by emphasizing the revolutionary role of crypto in the financial sphere.
Surprisingly, people often value simplicity over economy in financial matters, thus offering an explanation to why not every individual has adapted to cryptocurrency, despite its provision of different options at lowered prices. A practical demonstration of what cryptocurrency can accomplish can be seen in the Swiss city of Lugano, where over 15% of the population utilizes the city's personal LVGA stablecoin for their everyday transactions, including paying bills, shopping, dining, and accessing online facilities.
Digital currencies provide a substantial advantage over traditional finance methods, and can potentially offer increased accessibility. In several developing nations, only a select group has the privilege of financial services access. While only 6% of adults in America lack a bank account, this percentage escalates to 52% on the African continent.
Unfortunately, cryptocurrencies have not yet achieved the level of importance that conventional payment systems hold in terms of household expenses. Although, consensus regarding crypto acceptance is gaining grounds. Globally renowned payment companies and trading platforms have joined forces to issue crypto credit cards, for instance. Bitcoin is already being endorsed as a method of payment by brands such as Wikipedia, Microsoft, and Google. Coinbase solely cooperates with the latter to manage crypto payments allocated for cloud services. Furthermore, Time Magazine has partnered with Crypto.com to facilitate easier digital-asset payments for subscriptions.
Residents in cities like Lugano can even settle their taxes with crypto. To make a payment, a QR code on the bill is scanned and the preferred digital wallet for payment is selected. Lugano's PlanB initiative disclosed last year that individuals could live in the city strictly using cryptocurrency. Lugano boasts of over 400 establishments that receive digital assets, all thanks to the city's administration and Bitfinex jointly creating a platform to bolster payments with Bitcoin, via Lightning, Tether (USDT), via Polygon (MATIC); and Lugano's own LVGA token. Lugano aims to multiply the number of stores accepting crypto to 2,000 in the near future.
Some companies are prepared to provide solutions for taxpayers, like Coinbase, which offers a specialized solution that assists users in reporting gains or losses from capital to the IRS. Through a partnership with Cointracker, Coinbase can supply a summary of a user's taxable activity for their accountant or tax software.
However, the journey of crypto's growth is not without its obstacles. For instance, the introduction of plastic payment cards initially caused shock and bewilderment, and certain innovations were even met with public opposition. This is to be expected; unfamiliar realities often evoke fear in people. Imagine waking up to a zero balance instead of the monthly $10 fee one is accustomed to, such a jolt can cause a reality shift. Additionally, user education and acclimatization could delay the mainstream adoption of crypto. Yet, projections remain optimistic. Juniper Research approximates a rise in global digital wallet usage to 75% by 2025. In 2022, a study unveiled that 36% of participants were willing to be paid their salaries (either fully or in part) in cryptocurrencies. These statistics continue to ascend, and it is only inevitable that supply will be compelled to adjust to the burgeoning demand, likely within the next two years.
A pivotal moment in the integration of crypto into the finance industry was the approval of spot Bitcoin ETFs in the United States in January. This signified the commencement of crypto assets' "legalization".
This implies that it is time for everyday users to feel secure in utilizing crypto. They are beginning to grasp the relevance of digital assets to societal advancement. Increased freedom of action leads to a redefined approach to the implementation of crypto technology as a means of payment for goods or utilities.
Moreover, the involvement of institutional entities like MicroStrategy, Square, and Tesla projects validity on the crypto industry and aids the broader adoption of blockchain-related features.
A Solana loan from your bank?
Each year, the crypto industry broadens its range of services, presenting new payment methods, products, and technologies. Although it is unlikely that traditional financial systems will be replaced overnight by cryptos, a gradual change may occur involving smooth transactions or innovative payment solutions.
Crypto regulations are anticipated to foster a robust symbiosis between crypto exchanges and banks. In the near future, users may be able to secure loans in their favorite altcoins from their banks.
Banks may adapt and become more like exchanges with specific activities. In such scenarios, decentralized finance (DeFi) platforms like Polygon, Archblock, and Curve Finance may circumvent financial mediators and supply top-quality services with minimal charges.
The history of financial instruments reveals how surprising the utilization of a new technology can be. The trends of regulatory evolution and adoption show the increasing role that crypto is playing in routine transactions, propelling the world towards advanced financial organization methods.
The managing director of the crypto derivatives exchange Bitget, Gracy Chen, supervises market expansion, business strategy, and corporate development. Gracy Chen has previously held executive positions at unicorn company Accumulus and venture-backed VR startups XRSPACE and ReigVR. Furthermore, she was an early investor in BitKeep, Asia's premier decentralized wallet. Gracy Chen was recognized as a Global Shaper by the World Economic Forum in 2015. She is an alumnus of the National University of Singapore and is currently pursuing an MBA degree at the Massachusetts Institute of Technology.
This article is purposed to provide general information and does not constitute legal or investment advice. Any views, thoughts, and opinions expressed in this space belong solely to the author and do not represent or reflect the views or opinions of Cointelegraph.
Published At
4/1/2024 11:03:55 PM
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