Consumers moving toward cryptocurrency
Digital currencies are becoming more mainstream, says technologist John Best.
There’s a new game in town, and it’s called decentralized finance (DeFi).
“You want to stay in the game, and cryptocurrency is part of it,” says John Best, CEO of Best Innovation Group (BIG).
He gave an overview of cryptocurrency and its potential disruption to credit unions Tuesday during the 2021 CUNA Finance Council Virtual Conference.
Bitcoin and other cryptocurrencies represent a type of DeFi that has emerged as a new asset class with impressive returns over the past decade, Best says.
Several new developments, including increased institutional interest, pending exchange-traded fund (ETF) approval, and the popularity of stablecoins (digital currency pegged to a stable reserve asset, such as the U.S. dollar or gold) suggest a continued positive trend, he says.
BIG analyzes credit union balance sheets to determine members’ use of cryptocurrency. A recent review of a 300,000-member credit union revealed 2,450 cryptocurrency transactions totaling $5.5 million during a six-month period.
“The interesting part will be seeing how much of your money is leaving for cryptocurrency,” Best says. “It will be more than you think, and it covers a range of age groups. Consumers are starting to move in this direction.”
People attending Dallas Mavericks basketball games, for example, can buy game tickets, food, beer, and more with Dogecoin, a new type of cryptocurrency that started as a joke, he says.
“Members are investing in this, and it’s getting easier,” Best says. “You can do it with a PayPal account.”
Some banks use cryptocurrency as loan collateral, giving investors access to funds without paying capital gains. “It’s similar to doing stock loans,” he says.
Other efforts include credit cards and prepaid cards tied to Bitcoin, as well as ATMs where consumers can purchase crypto tokens with deposited cash.
Credit union leaders should pay attention to members’ growing interest in cryptocurrency, Best says. “It’s like the early days of the Internet. Now, that’s embedded into what we do every day.
“This could be akin to remote deposit capture, which is a revolutionary technology. Ignore it at your own peril.”
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