Crypto Global

The rise of digital payments and cryptocurrencies

Feb 9, 2021

It is interesting to see a stream of crypto payment services now entering the marketplace breathing new life into the debate over whether Bitcoin can be both a store of value and a means of payment. These institutions that are now entering this crypto space and weren't there six months or a year ago. And these companies are far from saturated in this market. We are at the very beginning with insurance companies, asset managers, etc.

Some emerging economies as well as developing countries have overtaken a whole generation of financial services. They went straight to the cell phones as a payment system instead of using credit cards. Depending on where you are in the world, digital payments have evolved in different ways. We would say now that there is no question that there is an explosion in digital payments worldwide. The predictions assume that 75% of people between the ages of 18 and 55 will spend all or at least half of their purchases online. This is a huge development by people moving from traditional store shopping to shopping online.

We think that after the pandemic we will not go back to what was. We've all somehow moved on to a new normal. And this "new normal" will take advantage of all the things we learned during the pandemic. It is interesting to see that the pandemic accelerated the surge in digital payments and the increased use of the smartphone for online and in-store payments.

Since Bitcoin is in no way correlated with most other assets, some are just thinking about how to find out what this type of currency can bring for consumers and how to prepare for it. Despite the fundamental consumer benefit of cash, stores and payment providers alike want their customers to use less cash. Paper money is slowly but surely disappearing. And what that will replace are all forms of digital currency. These digital currencies can be any number of cryptocurrencies, including Bitcoin, Ethereum, and others. It is only a matter of when the central banks will also start issuing forms of digital currencies.

Payment providers advancing into this area understand this trend and are trying to position themselves in such a way that they can help shape the future in which both central banks are more digital currency players and forms of cryptocurrencies are no longer just an asset class in which one can only invest, but you can use this crypto currency as a financing instrument for daily business transactions. Once we have sustained this benefit, we will see greater stabilization of these cryptocurrencies and a slow increase in value over time.