Though Bitcoin and the rest of the other cryptos are suffering from a bearish 2018, it is true that there is something to look forward to.
SEC considered Bitcoin and Ethereum not as a security. In fact, Jay Clayton also mentioned that cryptocurrencies are not considered security but rather it can be used as a replacement for fiat currencies.
If you will ask CEO of fintech firm Circle, Jeremy Allaire, “Our view is that all fiat currency will be crypto”. This is a bold statement regarding the future of fiat currencies. He mentioned that this scenario “seems inevitable at this point”.
Circle is a startup that offers a blockchain-powered app. It lets people send money to each other for free mainly because it makes use of blockchain technology, the same technology being used in popular cryptocurrencies such as Bitcoin.
Is He Right All Along?
If you will look at Venezuela, the Maduro regime released Petro which is a state-sponsored cryptocurrency that is backed by oil. But of course, it is far too early to tell governments would rather choose to eliminate the third party in transactions and resort to the use of blockchain tech.
Circle wants to have a new cryptocurrency that will be called the USD Coin. It is going to be pegged to the US dollar. The aim is to hook dollar transactions based on blockchain. It hopes to boost blockchain into mainstream transactions. According to Allaire, the new token is being made using an open-source platform that is known as CENTRE. It also hopes that financial institutions will join.
He mentioned that “our focus with fiat stablecoins is we really think of it as a core building block for a crypto native global digital economy. Our interest is in how do we take all of the tasks involved in the financial industry and move those onto crypto native infrastructure”.
The Growth of Circle
Circle is also creeping towards becoming regulated. Just like Coinbase that is now working with regulators from different parts of the world such as Japan while trying to get a license from the US Securities and Exchange Commission, Circle is also looking to operate smoothly by seeking federal banking license. And by doing so, it offers more services to its customers. And if you will ask Tom Lee, who is the co-founder of Fundstrat Global Advisors, this is a good thing for BItcoin’s price.
Lee mentioned that “We believe both companies would only make these moves if their perception of regulatory risks in crypto was improving”.
Prep for Institutional Investors?
As an investor who happened to be waiting for the next bull-run, it is most likely best time to be optimistic. As more businesses are working towards acquiring their license, and regulators are working hard in order to address different issues in the niche, there is a chance that it is only a matter of time before institutional investors come into play.
The question still remains whether or not cryptocurrencies will become the future means of transactions. Could it be possible that fiat currencies will eventually move towards blockchain?
