The race to mass adoption of Crypto
Crypto adoption can be challenging to measure or gauge because of the somewhat private characteristics it has. Sentiment around the world seems to be shifting and I have noticed this more so during the pandemic. No one wants to take cash, people rarely have cash on them, and cash is friction. Yes, cash is anonymous by nature and that could be the greatest characteristic of it, but this isn’t the 16th century anymore. Many of the conferences I have attended over the past several weeks have included speakers from around the globe, and one underlying topic of all these conferences regards the mass adoption of crypto and digital currencies.
I believe the US will be one of the last to embrace crypto or digital currencies as the way of the future and will allow other countries to lead the way. It seems like they are taking the wait and see approach which I can see as beneficial to figure out from others’ mistakes, but is also putting people and companies in this limbo where they can’t make decisions for their future. It’s a win-win for the federal government to walk this out for as long as they can (kind of like they did with COVID-19) because they can learn from other countries’ missteps or successes. Can waiting too long put them at a disadvantage on the world stage? Only time will tell us that answer.
To put things in context, the Cryptocurrency market is like a brand spanking new bullet train with all the high tech advancements. The platforms have been built, parts of the tracks have been laid, but we just need the Federal Railroad Administration to sign off on the fares, train schedules, liabilities, and responsibilities. I make it sound easier than it is, but you get the point. We are at the very early stages still and sometimes I forget this, but when you look around and see other countries pushing forward and adopting new things like this you can’t help but think why can’t we do that?
The current US financial system is fraught with bureaucracy, regulations, centralization, and now inflation. Countries in Europe such as France and Germany have constructed regulations around cryptocurrency banking, identifying the cryptocurrencies in their appropriate class, and are forging the path forward for their citizens to be able to take place in the new world. As long as you aren’t dealing drugs or laundering money for the cartels it seems to be the wild west for the moment here in the states which can be seen as both a good and bad thing. On a side note, did you know that some businesses here in the U.S. like DISH, Microsoft Store, Subway, and Overstock all take Bitcoin? Maybe there is hope for the US.
Rumors of zero taxes on capital gains have been bubbling through the ether here in the US and this is a good thing for crypto traders. This may also benefit the 1%, but I think it can benefit others in the Crypto space. Currently, the US views cryptocurrency as private property. This means that as a citizen we must track every single transaction we make and claim any capital gains from trading their digital currency that more than likely started out as a USD. This is where things create a problem for me. If I am buying cryptocurrency it is more than likely starting out as USD and I am converting that into a digital asset like an XTZ, ETH, or BTC why am I going to pay the government a tax on something they have no control over? That USD was already taxed from my wages and earnings so why must it be taxed again if I chose to invest it in something that created more value than the USD? I get it, if you buy a house and that house rises in price over time and you decide to resell it you must pay taxes on the asset if it rose in price, but doesn’t something seem messed up about that? Cryptocurrency is not a house and nor is it a tangible piece of property. Cryptocurrency is a digital asset class and a store of value. In my opinion, it falls more closely in line with stocks or bonds. The kick the can down the road approach to the huge elephant in the room must stop. There needs to be a meeting of the minds from all bodies and let’s get everyone on the same page. If that pushes people or companies outside the US the governing bodies need to take that into consideration before making their final rulings on the subject matter. It is going to be a trillion+ dollar industry, and we want to embrace that and not crack down on it as if it was the drug wars of the ’80s.
I understand the topic is not as simple as I present it and with everything crypto, there are many nuances and complexities, but for God’s sake, let’s get into the 21st century here. We have other countries like China issuing their digital Yuan whether it be for good or bad and the US is sitting here printing USD like its monopoly money. The Fed really had no other options, but we are building our house on stilts and those stilts can be kicked out from under us at any point in time. That is why I feel it is so imperative more than ever for people to start investing in the cryptocurrency and as always do your due diligence so you know that you are investing in. We will see an economic depression within the next 6 months and you should start preparing for that now. What happens when banks decide to freeze withdrawals? What happens when the USD becomes toilet paper and no longer holds any value like Venezuela? What happens when the Fed decides to print another 6 trillions dollars? I don’t pose these questions for fear-mongering, but to bring into existence a reality that we could be faced in the near future.
It makes me think when countries like Iran explore a crypto mining initiative and contract Turkish mining companies, where is the US’s game planning? If countries like Iran can start to circumvent sanctions then what will be the point of the sanctions if countries can move money freely? This seems like a smart move by the Iranian regime, but should we be fearful of this? I don’t really have an opinion when it comes to politics between nations, but what I do care about is the advancement of humankind as a civilization to the planet earth. Will cryptocurrency help bring people together? My guess is yes. There will always be bad actors in the world, but I believe that this technological revolution will help break many barriers and build surprising relationships that we once thought were not possible. Maybe that is just the eternal optimism speaking, but I can have a dream right?
Meanwhile, what has the US done in regard to their plan to cryptocurrency? Absolutely nothing. I am not saying that things are not being worked on, but it seems to be moving at a snail’s pace in comparison to other countries. Caribbean nations have crypto banks and have clear and distinct regulations around cryptocurrencies that are in favor of the end-user. Some of these nations don’t even tax their citizens or corporations at all. I guess that is what we get with one of the world’s largest government systems in the US. The house, the senate, the executive branch. The really only good thing that we have is checks and balances, but there has to be a different way. A better way. There has to be a way that we can evolve things at a rapid pace and move more quickly on the topics. We need to lead and be part of the international crypto coalition. I don’t think the US can afford to miss out on this opportunity of leading the way. There will be failures and mistakes, but like Mark Zukerberg said “move fast and break things.”
The underdog, dark horse in this mass adoption revolution that I think has the most potential is the continent of Africa. Africa is so broad and widespread that cryptocurrency has no option but to flourish. Countries there have very unstable currencies and regime changes are not uncommon. From what I know about some African countries the financial system is very broken and fractured. Reports have also told us that citizens throughout the continent have quickly adopted the new crypto financial system and this could make them a perfect use case for changing the world. South Africa is emerging as a major Crypto hub and ownership nationwide makes up about 13% of the crypto in the region. Because of its success regulators have now said that it can no longer remain an unregulated industry. Eyes will be watching South Africa and other countries in the area to see what they come up with. I’m excited and can’t wait to see what shakes out.
Overall, crypto and digital assets are coming and we need guidance. All I ask is for is not shitty guidance. Let’s build the future together and hopefully, a country can up with a foolproof blueprint for other nations to use. The reality of all this is that countries will be looking to the US to see how we end up regulating the industry while we are looking at other countries trying to figure it out. It could be one long staring contest, but I would imagine with all the brilliant people that make up this great nation we could find the best solution to help lead the way.
