Well, this is getting interesting.
In the latest sign of growing acceptance of digital currencies by the mainstream financial industry, Visa (V) just announced it will soon allow the use of the cryptocurrency “USD Coin” to settle transactions on its payment network.
The USD Coin (USDC) is a stablecoin cryptocurrency whose value is pegged directly to the U.S. dollar. And if more people choose to hold cryptocurrencies instead of dollars, euros, and yen, it could strain national and global financial markets.
Visa, which launched the pilot program with Crypto.com, joins other major financial firms like BNY Mellon (BK), BlackRock (BLK) and Mastercard (MA) that have also fully embraced digital coins, sparking predictions that cryptocurrencies will become a regular part of investment portfolios. A sentiment shared by Cuy Sheffield, head of crypto at Visa, said:
“We see increasing demand from consumers across the world to be able to access, hold and use digital currencies and we’re seeing demand from our clients to be able to build products that provide that access for consumers.”
Additionally, if the forecast from Mike Novogratz, founder of crypto firm Galaxy Digital, is anywhere close to accurate, it could spell further trouble for the dollar. Novogratz has made a fortune from cryptocurrency and, but now he thinks the opportunity is just getting started with the next big group to buy into the trend as it becomes more mainstream, wealthy boomers.
“It could be as much as a trillion dollars comes over the next year from that giant group of wealth.”
While major banks and trading platforms have begun offering cryptocurrency products to rich customers, most of the interest thus far has come primarily from younger investors comfortable with the concept of digital assets.
But Novogratz believes a rush from wealthy baby boomers is right around the corner, as many of them see bitcoin both as an asset that can dramatically appreciate in value and also one that can protect savings from the threat of inflation sparked by money printing:
“If you’re worried that the U.S. is printing too many dollars…you’re going to shift some of your savings into bitcoin.”
The irony in all of this is that in the end, it could be the adoption of cryptos like Bitcoin as a commodity, hedging against the dollar, that will inevitably lead to the dollar’s downfall once Bitcoin becomes such a widely accepted currency. Just think, 10 years from now, you have all these bitcoins laying around in a Coin Base account and you can use them to buy cars, flights, dinner, clothes, etc., you really think you’re just going to let it all sit there, collecting dust?