Cryptocurrency Sees Massive Adoption in Retail Payments

Cryptocurrency Sees Massive Adoption in Retail Payments

According to crypto experts, cryptocurrencies will have a greater impact on the retail industry in the future as more people invest in digital currencies.

Although the cryptocurrency market appears to be in a bear market right now, it’s not hard to see that the industry has grown tremendously over the past few years, especially when looking at adoption.

According to a recent study by Insider Intelligence, digital assets will be used more often by Americans to make daily purchases. The study suggests that we will see a 70% increase in the use of digital assets for purchases by the end of 2022. This is a significant increase from 1.08 million users (in 2021) to 3.6 million users. The global crypto transaction volume is expected to hit $10.4 billion this year. 

The volatility of the crypto market is decreasing due to the increased use of stablecoins as well as central bank digital currencies (CBDCs). This will lead to more people considering these digital assets to be legitimate payment options. According to the research, 12.8% (33.7 million people) of the US population will hold crypto by the end of 2022.

This number could rise to 37.2 million by 2023. This is a realistic figure, especially considering that the number of investors who have entered the global crypto market has nearly doubled in the past 12 months, particularly when you consider that there are many countries such as India, Brazil, and Hong Kong that have seen a significant increase in their investment. 

Cryptocurrency Sees Massive Adoption in Retail Payments

It’s time to see massive crypto adoption in retail payments

Max Krupyshev, CEO of CoinsPaid, a crypto payments processor, believes that cryptocurrency payments will experience exponential growth over the next three years:

“I think we will be able to talk about tens of millions of users in the United States alone by 2025. The American market is a fertile ground for any innovative solutions. Another factor driving crypto’s adoption as a day-to-day transactional currency is that it is becoming increasingly easier to buy, spend these assets with global brands.”

He also stated that Asia could surpass America when it comes to crypto payments. The region is flexible in accepting new and upcoming technologies. We should also be aware of the increasing popularity of cryptocurrency in African countries. There is a high demand for crypto apps as well as alternative investment tools with a low entry threshold.

Brandon Dallman, the chief marketing officer of the DeFi ecosystem Unizen, believes that the cross-border remittance and retail payments ecosystem had been dominated for a long time by a few players such as Western Union, PayPal, and Stripe. With the rise of cryptocurrency in popularity, people can now bypass issues such as middlemen and high fees: 

“Fast blockchain networks are suitable rails for CBDCs like the digital dollar, euro etc. The blockchain that is able to cater to the demand put forward by financial institutions like stock exchanges and clearing houses will win the battle. We are seeing banks of all sizes dip their toes in the water to see how they can start to interact with the new digital world in front of them, driven by a growing fear of being left behind.”

But crypto may not be for everyone

However, not everyone is on the same page when it comes to the crypto adoption perspectives. The head of research and strategy at cryptocurrency exchange AAX, Ben Caselin, stated that although we might see custodial stablecoins being adopted in the near future, it is highly unlikely that we will be heading toward a massive crypto payments society.

“With increased integration, we can expect more vetting and regulation which will not bode well at all for crypto. There might be some venues where particular tokens may be the currency of choice, for example, a Bored Ape-themed restaurant is likely to accept payments in ApeCoin. But, other than that, I’m of the view that ultimately, real-world payments and store of value utility will converge on Bitcoin, although this does not discount the continued growth of online and offline micro-economies.”

However, he agreed that it was encouraging to see mainstream people get a better understanding of money. He noted that if merchants and corporations can actually hold the crypto assets they are paid with, this could be very exciting.

What cryptocurrency is suitable for retail payments?

Some of the top condensers for the role of retail crypto payments are Solana (SOL) and Bitcoin (BTC). Some believe that Solana (SOL) can easily accommodate everyday transactions, as it offers high speeds and low gas fees, making it more accessible. Bitcoin (BTC) is a bit more controversial, but it was already chosen as a legal tender in some countries (El Salvador and the Central African Republic), which may lead to a more mainstream approach and increase in popularity. 

Many of those already working in the crypto space believe that Bitcoin will be a more popular method of payment than any stablecoin even though most products and services are denominated using U.S. dollars. Some supporters say that Bitcoin (BTC) has proven its viability, having survived multiple crises and more than one crypto winter. Bitcoin seems to be working well for larger transactions, but can also become more viable for smaller transactions as a result of advances in solutions built on top of the Lightning Network.

However, it is unlikely that BTC-centric payments will be implemented at a mass scale over the next few years. This is due in large part to the fact production costs are still paid using fiat currencies. They are typically tied to the U.S. Dollar, Euro, British Pound, yen, or yuan.

Besides Bitcoin (BTC), Ether (ETH) could also be a strong contender for the go-to global payment crypto for retail businesses, due to its market dominance and popularity among investors. 

There is also no doubt that the most used and held cryptocurrencies will gain the most ground in the payments market. As transactional currencies, the 20 largest coins in market capital will prevail. And stablecoins will surely be part of that market. 

Mainstream and big companies are already accepting crypto payments

The popularity of crypto assets has increased rapidly, with many famous brands now accepting digital currencies. Microsoft accepts Bitcoin crypto payments for its various services, including Xbox Live, Microsoft Apps, and games.

Overstock, an American online furniture retailer, appears to be the leader in crypto shopping. The reason is that the company currently accepts a variety of digital tokens including Bitcoin, Litecoin (LTC), Ether (ETH), and Monero (XMR ). Home Depot, America’s largest hardware store chain, accepts Bitcoin payments via Flexa’s checkout system. This is a crypto payments ecosystem supported by Gemini.

Starbucks also has partnered with Bakkt futures exchange, which allows users to pay for their coffee and other digital goods using digital assets. This is also true for American supermarket chain Whole Foods. Recently partnered with SPEDN, allowing users the ability to purchase all their groceries using BTC or LTC. SPEDN does not only apply to Whole Foods. It also allows users to use their digital holdings at Jamba Juice, Jamba Juice, Regal Cinemas, and Baskin Robbins.

AT&T, the first American telecom provider, has offered its clients crypto payments. BitPay is a third-party payment portal that allows users to access the company’s services and offerings using Bitcoin.

Other than the ones listed above, there are many other notable brands that accept crypto payments. These include entertainment company AMC, travel booking agent Travala and American department store franchisee JCPenney (through gift cards). GameStop is also accepting crypto payments.

We are moving into a future in which digital currencies will continue to grow in popularity at an alarming rate. It will be fascinating to see how crypto integrates into the global retail landscape, particularly in terms of competing with or complementing existing fiat payments systems.

The Digital Euro Could Be Launched by 2026

The Digital Euro Could Be Launched by 2026

According to Fabio Panetta, a senior official at the European Central Bank (ECB), a digital euro could be issued within the next four years by the European Union (EU). A potential first use would be peer-to-peer payments.

Due to concerns about Russia’s war against Ukraine and the rise of private stablecoins such as Facebook’s now-abandoned Libra, the timeline for the central bank digital currency (CBDC), has been moved back and forth.

What would the digital Euro be used for?

At an event at the National College of Ireland, Fabio Panetta, an executive board member of the European Central Bank, or ECB, has said: “The idea would be that let’s say, four years from now, we will be ideally ready to issue the digital euro,” and also expressed his optimism that the CBDC could be launched within the next four years, although it will be a complicated process that hasn’t been done before. 

Panetta suggested that a peer-to-peer (P2P) payment solution, which allows transactions between friends, could be the first test ground for the new technology before it spreads to other areas such as online payments or business payments such as physical and online shops.

He said that a P2P payment system that covers large numbers of users in the whole euro area could be a fertile ground for the adoption of a digital currency. Research has shown that the application would have the greatest impact on early adoption.

The ECB began a two-year investigation phase in October to examine issues such as which use cases should be prioritized. However, the ECB is still not sure if it will issue a digital currency. Panetta previously stated that the realization stage, which is due to begin late next year, could last for three years.

Christine Lagarde, President of the ECB, stated in March that the sanctions imposed by the war in Ukraine were a reason to accelerate the plans. However, other EU officials Monday suggested that they are letting their feet off the pedal.

We also have to note that Jurgen Schaaf, an ECB advisor, stated that the EU’s research and experiments on a digital euro are not a guarantee that they will launch a CBDC.

Why is the EU researching a CBDC?

After an industry consortium led Facebook suggested its own cryptocurrency, Libra, the idea of the EU issuing its very own CBDC was born. The Libra project was later renamed Diem and abandoned.

Mairead McGuinness (EU’s financial-services Commissioner) said that there was a feeling of urgency back some time ago, due to the fears of what might happen with private providers. McGuinness said that they will not hurry the research process. They want to move fairly quickly, but  “not hastily.”

Panetta stated that recent declines in the crypto market private may be another reason to continue the project.

Stablecoins lack the regulatory safety net that banks have and are, therefore “vulnerable to runs”, he stated. He cited the crash of TerraUSD (UST) from May 9th-13th. The supposedly stablecoin was issued and backed up by the Luna Foundation Guard.

Another example of an unregulated stablecoin is Tether (USDT), which also lost its peg to the USD dollar during the same week. Luckily, the USDT quickly recovered. 

Another reason for EU’s urge to research and regulate cryptocurrency is the war between Russia and Ukraine. Following the invasion of Ukraine, the EU and U.S. implemented severe sanctions against Russia. However, there are many concerns over the role of crypto in evading sanctions. This has prompted regulators around the world to accelerate their efforts to regulate the sector.

At the same time, U.S. President Joe Biden issued an executive order regarding crypto Wednesday encouraging federal agencies to adopt a common approach when regulating the sector. He asked the government to evaluate the benefits and risks of creating a digital currency.

UST Stablecoin Loses Dollar Peg But Terra Strives to Bring It Back Up

UST Stablecoin Loses Dollar Peg But Terra Strives to Bring It Back Up

According to the latest price estimates from CoinMarketCap, Terra’s stablecoin, UST has lost its USD peg as it fell to $0.36 on Wednesday, May 11th.

According to CoinMarketCap, the price of UST’s sister token, LUNA, has fallen over 96% to $1.17, following UST’s dramatic price drop. The online community is referring to this event as the #LunaCrash.

What is UST?

UST is a so-called algorithmic stablecoin. It works with LUNA in order to maintain a price at $1 by using a series of on-chain minting and burn mechanics. These mechanics are supposed to allow traders to swap $1 worth UST for $1 worth of LUNA. Luna has a floating price, and serves as a shock absorber to UST’s price.

Luna’s market cap falls below that of UST due to its price drop, reaching $763 million compared to $5.43 billion market cap of TerraUSD (UST). This could put at risk the entire stabilizing mechanism of UST. It means that Terra bank runs could result in some users not being able to redeem $1 of UST for $1 LUNA.

This is not the first time that the UST has been “de-pegged” from the $1 value that a stablecoin should have at all times. 

When a stablecoin isn’t stable anymore

The UST de-pegged that started at the beginning of May 2022 has urged the Luna Foundation to find a solution to this crisis and help the UST bounce back to its normal value. Luna Foundation Guard (LFG) announced on Sunday night that $1.5 Billion of its huge Bitcoin (BTC) reserves would be “loaned out” to professional market makers in order to proactively protect UST’s dollar peg.

However, the market cap of UST did not recover. 

Terra seemed to have emptied all funds (approximately $1.3 billion) from its verified bitcoin address.

Do Kwon, Terraform Labs’ CEO, posted a few minutes later on Twitter: “Deploying more capital — steady lads!”

According to reports, professional market makers use the BTC reserves to protect UST’s dollar peg in protocols such as Curve. Curve allows users to swap between UST (and other currencies) like the USDC and Tether stablecoins.

There is currently no link between Terra’s LFG reserves and Terra’s on-chain mint and burn mechanism. Although there are plans to bake Terra’s bitcoin reserve into its underlying smart contract, users currently have no option to redeem UST and LUNA for bitcoin.

This is a question that will remain unanswered, as the reserves appear to have been almost completely drained.

Terraform Labs CEO works to help UST regain its peg to the US dollar

Do Kwon, founder of Terraform Labs, said that the company supports a community proposal to help TerraUSD (UST), a stablecoin pegged with the U.S. Dollar, regain its peg.

Algorithmic stablecoins such as UST are backed with a range of assets like Terra’s LUNA and bitcoin (BTC). One UST can be redeemed for $1 worth of LUNA, so it is easy to keep its value.

However, UST lost the peg and dropped to $0.66 Monday, but it didn’t stop there. Although it recovered it’s value on Tuesday, when it reached $0.90, before falling to $0.35 during Asian hours on Wednesday. LUNA also dropped sharply.

Kwon, who has been unusually silent on Twitter over the last few days, said there was a plan for UST to be brought back to its original position.

Kwon explained how UST works in a tweet: “The price stabilization mechanism is absorbing UST supply (over 10% of total supply), but the cost of absorbing so much stablecoins at the same time has stretched out the on-chain swap spread to 40%, and Luna price has diminished dramatically absorbing the arbs.”

You can find the entire Twitter thread that Kwon wrote here.

Arbs is a term that refers to crypto arbitrage.

To try to bring UST’s peg down to $1, additional LUNA will be minted and would be sold on the market. This is in addition to a separate proposal that aims to offer a lower yield to users of Anchor.

The proposal states: “By allowing more efficient UST burn and LUNA mining, [which] will in short term put pressure on LUNA prices, but will also be an effective method to bring UST back to its $1 pegged-value, which will eventually stabilize LUNA prices.”

The story is still developing. Check the price of UST on Coinmarketcap

Dogecoin’s Price Surges as Elon Musk Agrees to Buy Twitter for $44 Billion

Dogecoin’s Price Surges as Elon Musk Agrees to Buy Twitter for $44 Billion

The famous meme coin, Dogecoin (DOGE), surged by 9% after reports that Elon Musk closed the deal with Twitter, and acquired the social media giant for $54.20 per share (a total of $44 billion).

As the news started to surface on social media, and especially on Twitter, the price of Dogecoin (DOGE) jumped up to $0.17, from $0.12, in only a couple of hours. That represents a 25% price increase on a 24-hour timeframe. 

The stock price of Twitter (TWTR) also rose around 6.86% on Monday, April 25, from Friday’s closing price, reaching $52.29. 

However, Dogecoin’s price soon droped to around $14.30. 

Elon Musk buys Twitter for $44 billion

The world’s richest man, owner of Tesla and SpaceX, gains control over Twitter, the favourite social media channel for cryptocurrency projects.

At first, Twitter and its advisors weren’t sure how serious Elon was about this proposal. On April 14, Elon Musk made an offer price of $54.20-per share, which some considered a joke because it included the number 420. This number is a popular insight joke that refers to smoking marijuana. However, Elon Musk submitted financing documents last week to support his bid. They were signed on April 20.

These references are reminiscent of his 2018 tweet “Funding Secured” in which he stated that he was looking to privatize electric car maker Tesla Inc for $420 per share. Musk and Tesla agreed to each pay $20 million to settle allegations that he deceived investors.

Musk claimed that he rounded up the price to $420 after learning about its significance in marijuana culture and thinking his girlfriend would find it humorous, according to a U.S. Securities and Exchange Commission complaint filed at that time.

However, discussions with Twitter became serious when Twitter’s advisors in San Francisco, including Goldman Sachs Group Inc, JPMorgan Chase & Co and Allen & Co began poring over Musk’s financial documents that supported his $44 billion bid.

According to Reuters, Morgan Stanley, Bank of America Corp and Barclays Plc committed to lending $25.5 billion to Elon Musk. Some of this was secured against Twitter stocks, and some tied to Musk’s Tesla stock. Musk also committed $21 billion of cash.

After Musk had submitted it to them with very little detail one week prior, the board of Twitter went into hyperdrive. Five months into his tenure as chief executive of Twitter, Parag Agrawal was already completing an analysis to assign a price to its standalone plan. It also asked its bankers for a triple-check to see if any other bidder could offer more than Musk. But there was nobody else. 

Why does Elon Musk want to buy Twitter?

Musk stated that he didn’t care about the economics of the social media platform. He stated before that he wants to use Twitter to promote free speech. He was disillusioned with many of its platform moderation decisions.

Elon Musk and Dogecoin

Although it may seem like it, the price of Dogecoin and Musk’s impending Twitter takeover are not directly related. Some analysts believe that Musk’s repeated endorsements of the memecoin draw speculation from crypto investors looking for Dogecoin to become part of Twitter’s long-term plans.

Musk has a long history of promoting Doge as a payment method. Tesla started to accept Doge as a payment method for some of its merch since November 2021. 

Will Solana NFTrees save the rainforests?

Will Solana NFTrees save the rainforests?

Paraguay’s untouched rainforest can cost as little as $300 for one hectare. Buying it will protect it from being bulldozed, cut down, and used for cattle ranching. With today’s technology, this land can become available to anyone, regardless of where you live. 

GainForest, a decentralised fund that uses artificial intelligence, has partnered up with Paraguay’s Ministery for Environment to protect thousands of hectares of forest within Paraguay’s Gran Chaco Americano. This area is one of the main carbon sinks and most at risk from climate change.

Blockchain saves the planet

Many voices blamed blockchain for its negative environmental effects. However, not all blockchains are created equal. The blockchain and cryptocurrency industries can be a major player in renewable energy, and help drive sustainable, objective change. It has inherent technological advantages that can outperform traditional companies in their efforts to combat climate change.

For instance, GainForest’s goal is to raise cryptocurrency donations in order to buy the forest from landowners, expand national parks, and thus prevent deforestation. GainForest combines blockchain-based smart contract technology with satellite imagery, drone photography, and data science. It has grown steadily since winning the Hack4Climate contest at United Nations COP 23 in 2017.

According to David Dao, GainForest’s co-founder, GainForest is now the first government-backed green cryptocurrency project. He said that the initial results would be presented at UN COP27 Egypt.

How to use crypto for good causes

The alarming rate at which deforestation is occurring around the world is well-known to most people. The annual loss of rainforests absorbs nearly the same amount of carbon as the annual emissions from large industrialized nations like the U.S. and China.

Dao said that the cost of stopping deforestation is still “insanely low”, especially in Paraguay, where land was purchased for as low as $20 per hectare in the 1980s.

According to GainForest’s co-founder, David Dao, a hectare of virgin forest land costs between $300 and $500. The upfront cost for landowners to construct infrastructure is $1,000 per hectare. The goal is to try to reach them before they make the decision to build a cattle ranch. Hopefully, the landowners will understand that this $1,000 investment is not worth it and that Paraguay can do more.

Dao and his associates, who have backgrounds in artificial intelligence, use the Solana blockchain for crypto donations. The Solana blockchain is a proof-of-stake network and it was chosen because of its low-carbon footprint. 

These crypto donations are tied to high-accuracy drone and satellite data that charts areas of forest. The Filecoin Green project allows for decentralized data storage. Donors receive data drops and wildlife camera photos. They can also be connected to native tribes using non-fungible tokens (NFTs), which in this case are referred to as Solana NFTrees.

The algorithmic mapping of each forest project’s activities removes any uncertainty that comes with traditional carbon offset. This involves planting trees, but leaves those who give only guessing about the impact of their green investment.

Money can solve the issue of deforestation 

GainForest cannot buy land. However, there can be found some workarounds. For instance, David Dao suggested that GainForest could create a legal contract so the landowner gets paid periodically provided they don’t deforest. He pointed out that there are several studies that estimate that a global deforestation stoppage could be achieved by paying out between $1 to $2 billion annually.

According to GainForest, deforestation could be stopped in two years, if there is enough money. People need financial sustainability opportunities to make forest conservation economically viable. This could reduce the global temperature by up to 0.2 Celsius degrees. It would also allow our society to find the right way to decarbonize the planet. That could be a valuable time for our mother Earth.

Russia to Use Crypto in Commercial Relations With Africa

Russia to Use Crypto in Commercial Relations With Africa

A representative of Russia’s Chamber of Commerce and Industry called for the government to carry out cross-border settlements using CBDCs (central bank digital currency) and cryptocurrency.

According to TASS, a local Russian publication, Sergei Katyrin, President of the Chamber of Commerce and Industry, wrote a letter to Mikhail Mishustin, the Russian Prime Minister, containing a series of proposals for developing cooperation between African countries. 

Russia to create a new bank to support economic trade with African countries

Katyrin advocated the use CBDCs (central bank digital currency) and cryptocurrency for mutual settlement and payment as part of Russia’s intent to develop more economic relationships with African countries, as a way to circumvent the Western sanctions imposed as a consequence of the Russian invasion of Ukraine.

Sergei Katyrin stated, “It seems useful to instruct the Ministry of Finance of the Russian Federation, together with the Central Bank, to ensure providing intergovernmental agreements with African states on the use of national currencies and cryptocurrencies in mutual settlements and payments.”

He also mentioned that the government should create a new export-import bank to support small and medium-sized enterprises in Africa.

At the same time, some African countries consider cooperation with Russia-linked blockchain networks.

Africa is starting to adopt crypto on a larger scale

At the beginning of April, three African countries, Cameroon, the Democratic Republic of the Congo (DRC), and the Republic of the Congo made a joint announcement about their plans to adopt TONcoin, the native coin of Ton blockchain. The announcement stated that each country would make a gradual transition to adopt cryptocurrency as a central pillar in their economic structures.

The TON blockchain is supported by the TON Foundation and has raised funds of around $250 from big companies from the crypto industry. Huobi Incubator and KuCoin Ventures were among the fund’s contributors. As projects are accepted, the fund will deploy funds via incubation, investment grants, hackathons, and educational programs. 

Benjamin Rameau, the managing partner of TONcoin Fund, states that they are focusing on Web 3-related developments and are currently incubating a non-fungible token (NFT) and a decentralized exchange. He added that wallets, NFT marketplaces, and decentralized finance are all possibilities for the fund.

Unofficially, TON has been associated with Telegram, the privacy-focused messaging app, as its co-founder, Pavel Durov expresses support for TON and possible integrations on the Telegram app. 

According to reports, the DRC may also launch a new national stablecoin on top of TON blockchain. 

Other African countries have also reported CBDC projects, including Kenya, Ghana, and the Republic of South Africa. Ghana worked last year to build offline capabilities to support its potential CBDC. This was to encourage its use in all sectors of society.

Crypto status in Russia

Russia continues to work on issuing a new federal bill regarding the use of cryptocurrencies after they banned crypto payments in 2021. But only one year later, in mid-February 2021, the Bank of Russia launched the digital ruble trial. Russian citizens successfully transacted the digital ruble and the trial was a success. 

The digital ruble trial included 12 financial institutions and three of them have already successfully implemented the CBDC platform. During the first stage of the process, users will open digital wallets on the platform’s mobile application. They can also convert the fiat in their bank accounts into CBDC and use tokens for national transactions. 

The next stage of the trial is to test the digital rubles as a payment method in stores. More developments are planned for the CBDC that will enable users to use it as they use fiat currencies.