19 Cryptonomics

Cryptonomics

Is cryptocurrency finally on the path to legitimacy?

Cryptocurrency has seen its share of ups and downs, but recent moves from major financial and political players may be sanctioning the digital currency as a legitimate and accessible payment option.

PayPal launched its cryptocurrency service in the United Kingdom in August 2021, letting British users buy, hold and sell digital currencies on the popular epayments app. The UK launch marks the first international expansion for PayPal’s cryptocurrency product since it launched in the United States at the end of 2020. “The tokens and coins have been around for a while,” Jose Fernandez da Ponte, PayPal’s general manager for blockchain, crypto and digital currencies, told CNBC, “but you had to be a relatively sophisticated user to be able to access that. Having that on a platform like ours makes a really good entry point.”

Eric Adams, the mayor-elect for New York City, announced in November 2021 that he wants to be paid in Bitcoin. Taking to social media, Adams signaled his intention to make New York the “center of the cryptocurrency industry,” starting by taking his first three paychecks in the digital currency.

Several countries are experimenting with nationally regulated digital currencies. China is currently piloting a digital yuan, with plans to eventually roll out the electronic currency for mass public use. Over the past year, the People’s Bank of China has distributed several million dollars’ worth of the digital currency via an app connected to six major state-owned banks, according to CNBC. Major cities including Beijing, Chengdu and Shenzhen have joined the pilot program in recent months, as have Tencent-backed WeBank and Alibaba’s Ant Groupbacked MYbank. China may even test the digital currency with foreign visitors at the 2022 Beijing Winter Olympics, CNBC revealed in April 2021.

In April 2021, the Bank of Japan (BOJ) kicked off its first phase of digital currency testing, and this initial exploratory step will continue through March 2022. The BOJ will focus on testing the technical feasibility of issuing, distributing and redeeming a central bank digital currency.

Also in April 2021, the UK finance minister Rishi Sunak told a fintech industry conference that the UK Treasury and Bank of England had launched a joint task force “to coordinate exploratory work on a potential central bank digital currency.”

Why it’s interesting The wild west of cryptocurrency is slowly being regulated and legitimized, opening the door to a future of digital economies.