To say this week has been huge for bitcoin and cryptocurrency adoption would be an understatement. There has been so much news that it’s been hard to keep up, even for those of us working full time in the industry.
Bitcoin adoption is always noteworthy because it shows that these technological improvements to our financial system are finally being understood and desired.
What makes this week’s news even more exciting is that we are seeing a major shift away from traditional finance writing off the cryptocurrency industry (and the technology behind it) as only for cyberpunks or money launderers. This is a narrative that the industry has worked to shake for a decade.
Now, we are seeing that companies like Tesla want bitcoin on their balance sheet and BNY Mellon, Mastercard and PayPal/Venmo see the customer demand high enough to meet it.
On Monday, Tesla announced it bought $1.5 billion worth of bitcoin to ensure “more flexibility to further diversify and maximize returns on our cash.” This move by Tesla and Elon Musk was well received by the industry, although some accurately pointed out that Musk had shilled Dogecoin on Twitter, while apparently having Tesla buy bitcoin instead.
Aubrey Strobel, Head of Communications of Lolli, the world’s leading bitcoin rewards company, pointed out: “Bitcoin is becoming fully integrated. Now that Tesla has added bitcoin to its balance sheet, retail investors have exposure to bitcoin when they buy $TSLA or the S&P 500.”
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This also led to a slew of companies making statements about their stance on bitcoin. Uber’s CEO, Dara Khosrowshah dismissed the idea of adding bitcoin on its balance sheet, saying “we are going to keep our cash safe.” For the record, bitcoin is safe but what he was referencing is Bitcoin’s volatility. He also left open the possibility of Uber accepting cryptocurrencies as payment in the future.
On Wednesday, Mastercard announced its plan to give merchants the option to receive payments in cryptocurrency later this year. This will allow Mastercard customers’ digital currency payments to be settled in crypto at participating merchants, a first for the company.
In a blog post, Mastercard’s EVP for Blockchain and Digital Asset Products, Raj Dhamodharan noted, “Our philosophy on cryptocurrencies is straightforward: It’s about choice. Mastercard isn’t here to recommend you start using cryptocurrencies. But we are here to enable customers, merchants and businesses to move digital value.”
Yesterday, (are y’all keeping up with me? Phew) BNY Mellon, the $2 trillion banking giant, announced the creation of a Digital Assets Unit, which the company describes as “a team dedicated to building the first multi-asset custody and administration platform for traditional and digital assets, including cryptocurrencies.”
For anyone familiar with the cryptocurrency industry and the troubles cryptocurrency companies have in obtaining bank accounts, let alone custodying cryptocurrency with a Bank, this news was exciting and shows immense progress. Banks like Silvergate Bank, who were early adopters in the space, as well as the OCC have paved the way for banks like BNY Mellon to be willing and able to provide banking and cryptocurrency services. Alan Lane, Chief Executive Officer of Silvergate Bank commented by email that the Bank sees “this as a tremendous validation of the platform we’ve built.”
Brian Brooks, former Comptroller of the Currency of the OCC told me, “When the oldest bank in the United States decides to adopt the newest money in the world, that shows the inevitable convergence between cryptocurrency and banking.”
PayPal also announced today that it is considering adding cryptocurrency as a payment option through Venmo. In 2020, PayPal itself introduced cryptocurrency as a funding source for digital commerce at its 26 million merchants. Venmo boasts over 52 million individual users.
Regardless of your personal opinion on cryptocurrency, all of this is summed up as big news for this growing industry. Erik Voorhees, CEO of ShapeShift.com, a leading cryptocurrency exchange explained to me, “The recent Bitcoin announcements by major companies is indicative of this rising future financial system. One built on open, borderless protocols, and immutable money.”
Aubrey Strobel of Lolli, eloquently summed the week up, “In the same week, the world’s most progressive company, Tesla, and America’s oldest bank, BNY Mellon, have added bitcoin to their business models. It’s no longer a matter of if institutions will adopt bitcoin, it’s a matter of when. One by one, institutional investors are validating the intuitive value and underlying logic of bitcoin.”