Mainstream businesses are increasingly turning towards cryptocurrencies, an indication of the growing legitimacy and importance of this novel asset class. However, a significant amount of work is required to turn this interest into adoption. And, several hurdles still lie in the way of mainstream usage.
A “friendly alternative” to traditional banking is also required to bank the crypto “unbankable,” according to BCB Group CEO Oliver von Landsberg-Sadie. During a recent interview, he noted that more than liquidity, the trouble with using crypto is with settling sales as correspondent banking networks usually reject crypto-centric transactions.
As settling of sales has been a major pain point for the crypto-industry, many payment services have subsequently come to the rescue.
Popular crypto-exchanges such as Coinbase and Bitfinex have already branched into crypto-payments provision. In doing so, they allow users to pay for services directly through their crypto-wallets, easing out the hefty process required to make crypto-transactions.
However, certain hurdles remain in the face of adopting crypto as a currency, and not just as a speculative asset for trading. The first among them, according to the exec, is a lack of understanding within the average consumer about cryptocurrencies.
While companies like Binance are working to fill this educational gap, Oliver von Landsberg-Sadie believes the process can take a long time. The next hurdle is crypto’s lack of ubiquity. Since many places don’t accept virtual currencies as a legitimate mode of payment, it continues to remain stuck on exchanges instead.
“Once that last mile has been penetrated, we’ll see a lot more adoption of crypto in the global merchant network. I see a future in which the de-facto currency will be a completely cryptographic one, but we’ve got another decade or two before we get there.”
The third and possibly most important hurdle is regulatory intervention or the lack of it. While all countries are moving at their own pace, the United States’ ambiguous landscape is “all over the place,” the exec noted, adding that the U.K is also not considered to be a viable option to open a crypto-business due to the complete absence of crypto regulations.
While the authorities are working towards consumer protection, they can’t really expect blockchain to go away since it exists on the Internet.
“Regulators will have to find a way to support business growth while doing their job of protecting consumers and keeping them efficient.”
Until these hurdles are crossed, it is important to retain the great interest venture capital firms are showing towards the space. This has been due to solutions provided by blockchain to long-standing payments issues such as cross-border transactions.
The exec concluded,
“Bitcoin is no longer the proxy for the health of the market. The level of VC funding is a huge signal of the growth of the market… The crypto network of networks would be the next global unifying payment model.”