Last week OpenPayd hosted the latest instalment in our Banking Unlocked webinar series. In this episode we discussed crypto: how can we encourage mass adoption of the technology, and how does the payments industry fit into this?
We welcomed Ajit Tripathi, co-host of the Breaking Banks Fintech Podcast; Pavel Matveev, CEO of Wirex; Szymon Sypniewicz, co-founder and CEO of Ramp Network; Adam Bialy, Chief Product Officer of OpenPayd; and moderator Ali Paterson, editor-in-chief of Fintech Finance.
Pavel said that crypto currently has a different use case: it’s primarily used as digital gold. Crypto is not currently suitable for payments, he said, but he believes that stablecoins will help.
Ajit said that the narrative needs changing. We need to educate the mainstream about the realities of crypto.
Szymon agreed that most people view Bitcoin and crypto as a gold substitute, or something to be used as a hedge against something really wrong happening in the monetary system. Stablecoins are good, he said, but in that world we’re around where we were with bitcoin in 2013.
Adam said that there’s been a COVID-driven form factor shift in payments: from cash or physical cards, to the internet. People don’t perceive bitcoin as a means of exchanging value yet.
Szymon said that what matters right now is building an easier way to use other cryptocurrencies - Bitcoin isn't right for this, for technical reasons, and because it isn't pegged to a fiat currency.
Ajit talked about the two layers of the crypto world: layer one is the ledger (like the Bitcoin blockchain), and that’s slow. Layer two is things like the Lightning network, which facilitates faster payments. There's also innovation in the wallet space. Bitcoin is only 12 years young, he said - it's too early to call.
Pavel said that every year we see more people from wider demographics becoming interested and coming onto Wirex. Volume of investment has also increased significantly.
Adam said that PayPal will change perception of crypto. They've single-handedly accelerated the education process. But there is a problem with centralisation: 70% of all new BTC mined since the PayPal announcement has been bought by PayPal, while the remaining 30% was bought by Square.
'Brand recognition' for Bitcoin is now very high. Next, we need to educate more about the actual use cases, according to Szymon.
Ajit cautioned that, at some point, the technology has to match up to the expectations. Ethereum's potential is important here.
Pavel said that rising prices are the best PR and marketing campaign. But this doesn't help with explaining use cases, and we need to educate much more in this area.
Adam pointed out that SWIFT is 50 years old, and Visa and Mastercard are even older. Those payment systems were run centrally. Bitcoin is decentralised, and only 12 years old.
He also said that crypto players need to start playing for the ecosystem, not just for individual profit. People in the space need to start reaching out to the people who anchor the traditional payments world, and vice versa.
Pavel said that we're already much further ahead than we were three years ago - for example, look at how far wallets have come. For mass adoption, it's vital for this new ecosystem to interface properly with the old world. We need to solve real problems, for example through P2P transactions.
Ajit pointed out that new rails are coming online with, for example, PayPal, and that this will help adoption of crypto.We've opened up a huge hive of innovation, and we've changed money forever already.
Szymon said we're already there. We already have solutions for nearly-free crypto transfers, and stablecoins are solving real problems. What we need now are bridges - more solutions to allow for seamless connection between decentralised and centralised ledgers.
Adam agreed that bridges are key. We need regulation that's fit for purpose and enables the decentralised world to scale. Stablecoins should help with this as they solve some of the main problems regulators have.