The UK government recently announced it will regulate some stablecoins as part of a strategy to make the UK a global centre for crypto and digital payment companies. This is akey moment in crypto’s adoption as a spendable currency, as opposed to a speculative asset.. We spoke to Andrea Ramoino, Chief Strategy Officer, Contis about how crypto can become a safe, traceable, spendable tender, including fiat-to-crypto technology, where crypto has been stuck – it has been taken on as an investment vehicle, and is a high-risk asset. This has become a vicious circle through crypto being used for likes of high-risk high reward day trading, and how to unlock widespread adoption – moving away from volatility, regulatory and government moves, stablecoins
What's your area of expertise and how have you been involved with cryptocurrency?
My experience with cryptocurrency started with a personal interest that was enhanced professionally through completing a Blockchain strategy programme course at Oxford University in 2019. Following this I became the Vice President of Product and partnerships at one of the leading Crypto compliance organisations, which helps businesses understand the risk associated with crypto transactions.
This instilled in me the importance of making data-driven decisions, which is crucial to everything we do here at Contis, as opposed to the emotionally led decisions which are commonplace in many organisations, especially with regards to Crypto. I arrived at Contis over one year ago very much as a ‘crypto expert’ at the business, and I have been fulfilling the role of Chief Strategy Officer where I define medium and long-term strategic goals and drive execution across the organisation.
The digital currency market is undergoing huge changes. Can you outline the main elements driving these changes?
Over the last 10-15 years we have seen more evolution of payments than in the previous 50 years. We have historically moved from physical cash to digital currency in the form of fiat electronic money, processing payments through card networks or banking rails. However, now crypto currencies are redefining the concept of digital currency. These have many benefits, such as increasing speed of transactions and reducing costs. Crypto is also built native digital, built for the internet, rather than traditional currencies digitally transformed like traditional payment methods.
One of the key trends is a continuous evolution around how crypto assets are used. A tangible example is bitcoin which started life as a peer-to-peer payment system, before evolving into a tradable asset. Now it is becoming a spendable asset again through crypto cards, which are being adopted by consumers. We also see crypto assets pave the way for other trends towards centralised finance which in time could turn into CBDCs, with many countries, such as Brazil, recently announcing pilot projects.
What's your take on the latest Biden Administration announcements in terms of regulating digital currencies?
This is a signal that crypto can no longer be ignored, while digital currency is still predominantly used as an investment vehicle, it is now being explored as a substantial method of payment. We are seeing this trend globally which is where the importance of stablecoins and CBDCs as a digital currency come in. Last year it was reported by PWC that more than 80% of central banks are considering launching a CBDC.
How can crypto become a safe, traceable, spendable tender, including fiat-to-crypto technology?
According to the 2021 Cryptocurrency Payments Report, nearly half of Gen Zers and Millennials have owned or currently own cryptocurrency. Meanwhile, it has become much easier for people to make purchases using their cryptocurrency holdings. All this points towards a future in which ‘spendable crypto’ is part of daily life.
The technology and infrastructure to make crypto spendable is already there, meaning virtually anyone can, in theory, use Bitcoin or Ethereum to buy their morning coffee.
It is no longer necessary for a given merchant to accept crypto, a ‘crypto card’ can convert and spend any digital asset instantaneously at point of sale. This has been one of the most interesting trends to enable people to use crypto more openly, which in time will help grow its adoption. The next step is to provide more stability in terms of the value of these currencies, as currently volatility is a primary barrier.
How will crypto move from a primary investment vehicle towards a mainstream spendable currency?
At present the volatility of cryptocurrencies makes them less practical for everyday spending. This means that stablecoins and CBDCs will likely form part of the solution to the ‘spendable crypto’ puzzle.
We recently saw a major Australian bank, ANZ, back the launch of stablecoin A$DC, a pivotal day in the history of digital asset adoption.
It's a step towards restoring confidence in the digital economy, particularly as ANZ is working with Australian regulators to strike the balance between compliance, acceptance, and utility. ANZ is blazing the trail for more banking institutions to follow suit and potentially disrupt the disruptors: the crypto native issuers who originated the first stablecoins.
Although crypto spending is indeed in its early days, we are now seeing daily stories in the headlines, with Britcoin and the BoE’s Central Bank Digital Currency (CBDC). The UK has announced it will regulate some stablecoins, as it looks to consolidate its position as a leader in digital payments.
What does the future of cryptocurrency look like to you? And, will it ever spell the end of cash and fiat currency?
There are a number of drivers behind the advance of cryptocurrencies, not least of which is the historic lack of innovation and a lacklustre response to digital transformation that has made the payments sector ripe for disruption. But whatever the cause, the result is the same: a fundamental reappraisal of the way we use and define money.
The original intention of Bitcoin, the most prominent crypto asset, was to be a cost effective, frictionless, and spendable tender. We have recently seen strong signs of crypto assets again being used for purchases, through crypto cards, and this phenomenon is due to grow.
Although in developed countries such as the Nordics and the UK we are seeing a move towards electronic payments which has been prompted by Covid-19, I don’t see a cashless society being adopted on a global scale anytime soon, unless it is a government led initiative such as CDBCs.
Fiat currency will not disappear but might take a different form. Cash will gradually decrease, as electronic payments continue to rise which could in the future lead to a greater adoption of digital currency such as private stablecoins and CDBCs, which in turn might begin to replace the use of electronic payments as we know them today.
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