Since the creation of the first cryptocurrency, the Bitcoin, the interest and demand for this type of digital currency have not stopped growing. Although cryptocurrencies have disadvantages such as high volatility and lack of security, they also have great benefits such as low costs and speed by not having intermediaries in the transaction, the possibility of using them from anywhere in the world and low taxes. These characteristics have favored its influence at a global level where there are already thousands of types of cryptocurrencies.
There are currently more than 8,400 cryptocurrencies in the world. Bitcoin continues to be the leading cryptocurrency in the market, reaching a price of $49 thousand per unit. Its current capitalization is $914,578 million. They are followed by others such as Ethereum, which in 2020 increased its price by 462%, Ripple (+14%) or Cardano, which also grew by 449% last year. In short, despite the market corrections carried out in 2018 and 2019, in 2020 the main cryptocurrencies have experienced large revaluations, giving the feeling that this trend is going to last thanks to the growing interest in the sector.
According to a survey conducted by Statista, in Spain around 4 million people own cryptocurrencies. With these data, our country is among the European countries with the highest adoption rate of cryptocurrencies (9%), only behind Switzerland and Greece. Globally, we would be ahead of countries like China whose adoption rate would reach 7%, the United States with 6% or Japan with only 4%.
However, although cryptocurrencies have experienced exponential growth in recent years, according to a study carried out by ING, about 46% of Europeans believe that investing in digital currencies is riskier than doing it in the stock market, so many people today still prefer not to invest in cryptocurrencies.
The creation of a regulation on cryptocurrencies is essential to generate greater security among their potential clients. Digitization is allowing new industries to emerge to meet the needs of society, but these require regulation that favors their evolution. In addition, traditional banking has always been against this form of payment due to its limited control and this can be an opportunity for them to support its use among society.
Despite the fact that in Spain there are some regulations on cryptocurrencies such as the protection of clients against scams or regulations on their exchange, there is still a lot of work ahead. At a general level, companies in the sector are in favor of an increase in regulation in order to achieve acceptance in the financial system. Regarding the EU, some proposal that is being worked on has been announced, such as the MICA regulation (Markets in crypto-assets) that aims to support this sector so that more consumers and companies, and even banks, approve cryptocurrencies as a means of payment.
Since last March, the Tesla company decided to accept payments in Bitcoin, a decision that Elon Musk announced through his Twitter account. The measure carried out by the electric car brand is only valid in the United States at the moment, but given the upward trend of the cryptocurrency, the idea, in principle transgressive, has been received as a long-term master move, since the Payments will not be transformed into dollars once received, but Tesla’s idea is to accumulate the Bitcoins it receives from the sale of its vehicles, turning this income into an investment for the future.
The idea of Tesla is to extend this measure to more countries, however, it has obstacles such as the payment of taxes that the purchase of a car entails in any country, this issue can become a source of doubts for both buyers and for the States themselves. The purchase with Bitcoins could be taxed as a capital loss or as a conventional purchase, but it is understood that, beyond this doubt, it will never be exempt from taxes.
There are other companies in which, although they do not accept payment in Bitcoin in principle, you can pay with this cryptocurrency, in Amazon for example, you can use Bitcoin to buy in Amazon and other online retailers through services such as Purse.io and Moon. Moon is a browser extension for Google Chrome, with which you can use your Bitcoin balance through the Lightning network. This mechanism is also valid on Ebay, AliExpress or Walmart.
All this reflects how such important companies are knowing how to adapt to technological evolution, especially in a time where it has been accelerated by the health crisis that we are experiencing due to Covid-19. It is still early to say that cryptocurrencies will be introduced into our banking system shortly, but it is something that sooner or later will end up happening if the bank does not want to be left behind in digitization.