The way we pay for things over time has changed from precious metals to cash. With crypto slowly gaining traction the 103 trillion dollar question is when will crypto break through the FUD (fear, uncertainty & doubt) to become the new gold standard?
Cryptocurrency has been making waves in the financial world for the past few years, with proponents hailing it as the future of money and skeptics warning of its potential risks and uncertainties. But with the global economy facing unprecedented challenges and traditional forms of money under increasing scrutiny, the question on many people’s minds is will it become as normal as pulling out your EFTPOS card to pay for something? It’s in every banks best interest to not allow change to come into the financial industry, year on year on year most banks keep reporting record profits with their greatest earnings yet and guess who is paying all these banks this profit . . . that’s right it’s you and me with the bulk of those profits going overseas. The four large banks in New Zealand (ANZ, ASB, BNZ and Westpac) are Australian-owned banks and account for 85% banking while the five New Zealand-owned banks only account for 9%.
Banks in New Zealand are even reluctant to talk about “open banking”, it’s in their best interest for it to not happen because they want to tie you to their banking ecosystem and make it as inconvenient as possible for people to change banks. Open banking allows third-party developers to access financial data and services through APIs (Application Programming Interfaces) that could in tern make it much easier to do banking outside of your banks app and in time make changing your bank account with all your banking services, automatic payments and banking cards with you to another bank, it makes it as simple as changing your phone provider, internet provider or utility provider.
Right now banks are the gate keepers of all the money, so no wonder there is so much FUD around crypto & DeFi (Decentralized Finance). Many countries, including New Zealand, are already investigating the use of a CBDC (Central Bank Digital Currency). A CDBC is a digital version of a country’s fiat currency that is issued and backed by the central bank of that country, it’s not DeFi but it can do a lot of what DeFi can offer. It is designed to be used as a means of payment and a store of value, similar to physical cash or traditional bank deposits. Traditional banks should be concerned because with CBDC’s comes the possibility of self custodial money where you can keep your money in your own app and not even use a bank.
Yesterday Visa proposed a solution that would allow to automatically withdraw funds from users’ self-custodial cryptocurrency wallets with set parameters. The primary use case is auto-payments for recurring bills vs traditional banking, where users can authorize certain providers to withdraw money from their accounts to pay bills, such as a Netflix subscription or a monthly phone bill. This means we are another step closer to not needing the banks. The next generation of children are not going to grow up with a bank account and debit cards instead they are going to grow up having their own bank in their pocket.
So the sooner you start using crypto for payments the sooner it is going to be adopted by the masses. EFTPOS is now a standard in almost all retail locations and payWave has also high enough adoption that we now expect it as standard, crypto is going to be the next, in no time at all we will be saying things like “Oh you don’t take crypto?”
If you want to start paying for things in crypto give Pay It Now (PIN) a go, they already have hundreds of retailers around New Zealand accepting crypto at the counter.
