When the market value of cryptocurrencies dramatically crashed in 2018, skeptics were quick to liken it to the infamous dot-com-bubble. However, far from fading to obscurity, players in the crypto market looked for the lessons to be learned and fought back to build a stronger, more stable crypto-economy. Indeed, thanks to this early glitch, seismic advances were made towards overcoming the barriers. From readable wallet addresses likening crypto transactions to modern payment apps, to innovative methods of protecting user privacy on the blockchain through Zero-Knowledge Proof cryptography — cryptocurrencies are closer to becoming to mainstream adoption methods than ever before.
Mainstream adoption Coming? Regulation Overhaul
Unlike traditional currencies, crypto has faced an uphill battle from the beginning with regulators. However, recent legislative developments, such as those in India, suggest that change may be on the horizon for digital asset businesses. This was confirmed after the Supreme Court overruled a Reserve Bank of India directive that banned banks and other financial institutions from dealing with businesses involved in cryptocurrencies. The ruling lays the foundation for mainstream adoption of cryptocurrencies in India, and should pave the way for India to be at the centre of advancements in the digital economy.
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Outside India, several governments have taken steps towards embracing the opportunities cryptocurrencies have to offer. Most significantly, cryptocurrency trading is now legal in the UK, the EU, and the USA, where significant progress in legislation has passed. As a result, cryptocurrency is establishing itself as an equivalent to other asset classes while enjoying improved levels of recognition and protection. This move towards mainstream adoption is particularly noteworthy in America, which represents almost a quarter of all transactions.
Another factor that has powerfully impacted attitudes towards cryptocurrency adoption at both an institutional and a consumer level is its long-running battle with stability. The dramatic fluctuations in market value that have become the norm make it a high-risk asset that many are unwilling to gamble on — especially in a volatile economy where even long-established currencies and securities are unstable.
To help challenge this barrier, several “stablecoins” have emerged in the market — digital currencies whose values are backed by reserve assets. Although early stablecoin variations faced much scrutiny, several new generation stablecoins are now surging in the market, having resolved challenges around capitalization and transparency. With market values that are much more closely tied to Fiat currencies - in particular the US Dollar, they are proving that ‘stable’ is more than just a name.
An important indicator of cryptocurrencies overcoming both instability and regulatory uncertainty is the dramatic rise in governments exploring Central Bank Digital Currencies (CBDCs). Earlier this year, a group was created in which the central banks of Canada, the United Kingdom, Japan, European Union, Sweden, and Switzerland, along with the Bank for International Settlements (BIS), committed to jointly researching CBDCs. President of the European Central Bank, Christine Lagarde, has in particular shown support for developing CBDCs, recognizing the demand for fast and low-cost payments.
Confidentiality and Compliance
Advocates argue that blockchain-based decentralized architecture offers far greater security from cyber-attacks and other security breaches than centralized data behind traditional firewalls. However, skeptics argue there is just too much room for anonymity. To counter this, over 18 countries have actively engaged with the industry to encourage them to adopt industry-standard “Know-Your-Customer” (KYC) procedures. As a result, cryptocurrency players are helping to directly tackle fraud and suspicious activity.a
Just as traditional institutions grapple with new data privacy and financial regulations, so too does the world of crypto. Compliance and customer protection are absolute priorities for blockchain and cryptocurrency projects, many of whom have been ridiculed for either too much privacy or a complete lack of confidentiality. Crypto payments projects are overcoming such issues by looking at the solutions provided by their market. Advanced Zero-Knowledge Proof technology, for example, is now a widely recognized method of preserving confidentiality for users on the blockchain, while maintaining regulatory compliance and adhering to financial auditing standards.
Constantly Improving Everyday User Experience
A 2019 YouGov survey concluded that 81% of Americans were familiar with cryptocurrency, of whom 75% knew about Bitcoin. Overall, it seems that the general public has become much more aware of cryptocurrency over the last decade, with more and more individuals and businesses alike showing a willingness to use it — as many as 40% in the near future, according to the same survey.
As mainstream adoption of cryptocurrency rises, projects focus on accessibility and providing an enhanced user experience. Cryptocurrency players continue to learn and evolve, leading to intuitive, simple, and focused platforms which make the experience easier and more attractive to seasoned veterans and new adopters alike.
New innovations and platforms are making it easier than ever for both individuals and companies to adopt cryptocurrency, either as an additional payment channel or as a replacement for existing solutions. Trading and investment in the cryptocurrency have also undergone the same transformation, allowing novice users to quickly get to grips with the market and enjoy a flawless experience.
Cryptocurrency As A Mainstream Currency - A Bright Future
As a young and emerging mode of payment, it is understandable that cryptocurrencies have had to overcome challenges. In doing so, however, the industry has proven to regulators, businesses, and users that digital assets are a versatile and robust store of value — a promising position for mainstream adoption.
Responsibility, trust, and transparency have now become the core values of an industry that has matured considerably in just a decade. At the same time, the adoption of standardized integration into existing standards for financial transactions now makes it a whole lot easier for the crypto-economy to function alongside our existing economic systems.
Current trends in technology have ignited an imminent future of innovation. From electric cars on the road, to the rise of smart home systems, to welcome developments in renewable energy, to the incorporation of A.I. into our everyday personal devices. Alongside this, undeniable trends in the global economy show a shift toward the digital payments revolution. A future in which new technologies are paid for and funded through cryptocurrencies is increasingly becoming a reasonable prediction. The world is changing - and the crypto-economy is at the forefront of the new technological dawn that awaits us.
Built by the CoinSwitch team, CRUXPay is an open, decentralised protocol that enables users to create a human-readable ID (CRUX ID) and link all their blockchain addresses in one wallet. Providing a single point of use for all crypto transactions for individuals or businesses, CRUXPay ensures the highest level of security with zero error when sending and receiving payments. CRUXPay creates a seamless payment experience matching that of online fiat payments. Additionally, CRUX IDs can be used to login into dApps on any device anywhere in the world, removing dependency from browser extensions. CRUXPay is powered by Blockstack and secured by the Bitcoin hash power.
About Sharan Nair:
Sharan Nair is the Chief Business Officer at CoinSwitch.co and CRUXPay. Prior to joining CoinSwitch.co, Sharan served as Vice President of Business Development & Marketing at Unocoin - one of India's first cryptocurrency exchanges. He has a deep understanding of the crypto industry and played a crucial role in driving mass awareness of digital currencies in India. He holds a Bachelor of Technology in Information Technology and a Masters of Business Administration in Finance and Marketing.