Cryptos have made inroads into the collective consciousness, and are making inroads, bit by bit, into mainstream commerce in ways that would have been scarcely imaginable only a few years ago, Shaun Worley, head of product at BitPay, writes in the PYMNTS eBook, “Endemic Economics: 32 Payments Execs on the ‘Next Normal’ That Never Happened.”
The past few years have proven: Cryptocurrencies aren’t just a flash in the pan. It may be commonplace to dismiss newer forms of doing business, especially in the digital realm, as fads, as tech-enabled solutions in search of problems. But cryptos have made inroads into the collective consciousness, and are making inroads, bit by bit, into mainstream commerce in ways that would have been scarcely imaginable only a few years ago.
The early years may have focused on bitcoin, on what it was, and is, and how other digital currencies might have new applications for consumers and businesses.
Now, the digital asset space is marked by a broad range of cryptos, of non-fungible tokens (NFTs), of more brands that are coming to market. And the blockchain technologies that they’re all built on is increasingly showing great utility in transforming even the most basic tenets of banking.
To get a sense of the evolution, how the payment “mix” of assets changed over time, with BitPay’s own experience as microcosm: Not all that long ago, bitcoin comprised a significant percentage of payments, but now is around 50% to 60% of the mix, with the remainder tied to stablecoins, Ethererum, Litecoin and a host of other options.
That diversification opens up the penetration and proliferation of various wallets, as well as variable price points where consumers (and enterprises, too) can and will make higher dollar transactions. Volatility notwithstanding, many of these consumers have accrued balances that have stabilized — and they may be ready to make larger purchases than they did before. That means merchants and billers, seeing pent-up demand, will likely want to offer cryptocurrencies among their payment options.
Blockchain is just beginning to help corporates manage data and all manner of information tied to money movement, helping transform back-office functions. Cross-border payments, especially, can see significant value-add from stablecoins and blockchain, especially as various transaction limits lift and transaction throughputs improve, reducing any remaining points of friction.
In terms of innovation, it’s likely through the next year — and beyond — that stablecoins will gain currency (pun intended) in global commerce, as they are marked by relatively less volatility than offerings that are not tied to an underlying asset or fiat.
There will continue to be growth, too, as industries across the board discovering how crypto and blockchain can redefine verticals as diverse as maritime, precious metals and even real estate acquisitions.
All of these trends will converge and crystallize as regulatory uncertainty falls by the wayside. Against that backdrop, banks and merchants — which are currently lagging consumer adoption of cryptos by a year or two — will find a greater comfort level exploring what decentralized finance (DeFi) might mean for their own operations.