Cryptocurrency was born as an act of rebellion against banks, fees and rules. It became popular among speculators and idealists who dreamed of decentralized digital utopias. And now that it has proved itself capable of surviving thus far, it’s attracting the attention of some of the institutions it intended to subvert.
Governments and corporations are beginning to embrace cryptocurrency and its underlying blockchain technology. Cryptocurrency is booming. But it won’t be on the basis of an idyllic, friction-free alternative economy as its pioneers hoped. Crypto is being taken seriously – and that means it will be taxed, regulated, and co-opted by governments and mega-corporations.
Here are seven major signs that crypto is on the verge of taking its place among the world’s established, respected financial instruments.
1. The IRS is taxing people for their crypto gains
In August 2019, people around America received envelopes from the Internal Revenue Service. These letters, sent to more than 10,000 people, warned them that they might owe taxes on unreported cryptocurrency earnings.
Despite the libertarian dream of creating completely untraceable transactions through immutable encrypted smart transactions, things are not entirely anonymous. After all, how did the IRS know which people they needed to target? This info was gathered from one of the biggest crypto trading platforms in America — Coinbase. Since the US government treats all cryptocurrencies as property under US tax law, the IRS was easily able to get a court order, demanding that Coinbase release information about all accounts worth $20,000 and over.
Crypto is no longer a vague concept that few people understand. We’re not discussing it as something that will become a part of some distant future — it’s the here and now. Banks, governments, and investors are taking it seriously. Even the US government is finally realizing that since crypto isn’t not going anywhere, it’s time to find a place for it in the American financial system.
2. Facebook, yes Facebook! is introducing a cryptocurrency
If anyone can popularize crypto, it’s Facebook. With Libra originally intending to launch in 2020, Facebook is intent on changing the financial infrastructure and disrupting the way things are bought and sold online. It comes with no transaction fees, no credit cards, and no middleman — Libra is meant to reach people around the world, including those who don’t have access to bank accounts.
A subject of antitrust investigations and harsh government scrutiny, Libra is slowly breaking barriers as Facebook works with financial regulatory agencies in America and around the world. This Facebook-created currency will be accessible through Calibra, a digital wallet that will let users send money to others through their smartphones.
Companies like Spotify, Vodafone, and Uber are going to be a part of the network, meaning that the sheer scale of this project is immense. Imagine if every person with a Facebook account suddenly had the option to buy this new cryptocurrency quickly and easily! Not only will it be popular because Facebook is releasing it, but it allows for cross-border transactions while eliminating the need for fees associated with credit cards. Both consumers and companies will have significant incentives to use Libra.
3. Crypto ATMs are being installed everywhere
Right now, there are over 5,000 cryptocurrency ATMs all over the world, and that number is rising daily. The U.S. is home to 60.8% of all crypto ATMs, followed by Canada with 12.44% ATMs and Europe with 22.1%. On average, there are 6.3 new cryptocurrency exchange machines installed each day. These machines can be used to exchange different cryptocurrencies, and they can also be used to exchange crypto and fiat currencies.
The simple convenience of these ATMs means crypto is on track to becoming an integral part of our daily lives. If people can simply grab a few Ether or Bitcoin while they’re out running errands, they’re more likely to start interacting and even using it. Seeing a crypto ATM every day normalizes the concept — it’s physically accessible, convenient, and you may see others withdrawing from the machine. Suddenly crypto is no longer such a mystified concept. Once you start sending crypto as a form of payment, you see that it doesn’t impose the same high transaction fees that your bank account does. Additionally, the value of the cryptocurrency you bought has the chance of rising.
4. There’s a government-approved Bitcoin-focused futures trading platform
Intercontinental Exchange owns and operates a dozen financial exchanges around the world, including the New York Stock Exchange. In October 2018 it announced the formation of Bakkt, an exchange for cryptocurrency futures.
The exchange won regulatory approval for its futures trading platform from the U.S. Commodity Futures Trading Commission in August 2019. Bakkt opened for business on September 22, executing 71 futures contracts within the first 24 hours of operation.
The exchange’s popularity seems to be skyrocketing, due mostly to the fact that this is the first platform of its kind to receive government backing from US regulators. The exchange lends Bitcoin and other cryptocurrencies an aura of credibility. Now there’s a legitimate platform where speculators and hedgers can make investments safely. Unlike other Bitcoin exchange platforms, Bakkt pays out everything in actual Bitcoin, not the fiat currency equivalent of the current Bitcoin rate.
This is exactly the kind of incentive the investment community needed to start taking Bitcoin more seriously.
5. Countries are adopting national cryptocurrencies
Around the world, countries are exploring the possibility of creating official national cryptocurrencies. While some places (such as Senegal and Tunisia) already have their own national cryptocurrencies, many are still experimenting and looking for ways to integrate crypto with fiat currencies.
A lot of countries were reluctant to take this step, with Swiss officials commenting that crypto simply doesn’t seem useful enough for governments to take this step. However, with Facebook’s Libra set to launch soon and digital currencies becoming omnipresent, central banks are now feeling the pressure.
The biggest obstacle to crypto is its notorious instability — it’s difficult to invest and even use digital currencies when everything about them is unpredictable and varies from day to day. If more countries were to adopt their own cryptocurrencies, that would bring much-needed stability to digital currencies and make them a part of everyday life much quicker. Of course, that also diminishes the initial appeal of crypto — once they become government-regulated, they’ll no longer offer the same kind of anonymity and control that appealed to early adopters.
6. JP Morgan is issuing a currency for international banking
JP Morgan is the first major US bank to issue its very own digital currency — the JPM Coin. From simple client transfers to cross-border transfers, the bank believes that everything is slowly moving to blockchain. JP Morgan moves more than $6 trillion on a daily basis, and it needs a lightning-fast alternative to slow, expensive wire transfers.
So far, 330 banks around the world have joined JP Morgan’s blockchain-based Interbank Information Network, including banking giants like Germany’s Deutsche Bank and Singapore’s OCBC. Members of IIN will be able to use JPM Coins to make immediate, cost-free international transfers from bank to bank. JP Morgan alone moves more than $6 trillion per day in real-time transactions between clients of its wholesale payments business. JPM Coins could eliminate costs and time delays related to those transfers.
The value of JPM Coin is set against the US dollar — one coin for one buck. The value doesn’t fluctuate, so the problematic volatility that follows crypto like a shadow isn’t an issue.
The coin is not meant for commercial use. It’s intended to allow members of the bank network to transfer funds among themselves without incurring fees, and consumers will likely never be able to use it themselves. Still, the banking industry is not only innovative but pragmmatic. This kind of practicality could one day make cryptocurrencies a part of daily life.
7. More than 48,000 businesses accept crypto as payment
Microsoft. Home Depot. McDonald’s. Tesla. Apple. These are just a few examples of big companies that are serious about crypto. They accept it as a legitimate form of payment for their goods and services, and a lot of them invest in cryptocurrencies themselves. In Europe, more than 80,000 stores that accept Bitcoin as payment, including big brands like Sephora.
Companies are ready for blockchain and they’re eager to keep up with future trends by accepting crypto. The more brands jump on the bandwagon, the easier it will be for everyone else to embrace it. E-commerce retailers are particularly happy to engage, with more than 75,000 retailers on Shopify alone now accepting digital currency.
You know cryptocurrency has hit the mainstream when you can use it to buy a coffee at Starbucks.
Today, more banks and governments are coming on board to the cryptocurrency industry. These are only some of the major signs that change is coming and cryptocurrencies are slowly seeping into our everyday lives. Now all that’s left is to wait and see how increased mainstream adoption will change the dynamics of cryptocurrency on a global scale.