While markets are focused on a sensational cryptocurrency-related IPO and on China’s announcement that it has created a cryptocurrency version of its regular currency, the yuan, this installment of What’s Ahead looks at a more momentous event that took place a few days before: PayPal has found a way to let consumers use various cryptocurrencies via their PayPal digital wallets to seamlessly buy stuff from the platform’s almost 30 million merchants.
The cryptos are instantly converted into regular money, so sellers have no currency risk. The huge obstacle to cryptos becoming genuine currencies that can be used for commercial transactions has always been their extreme volatility. PayPal has found a way around this.
Moreover, a new class of cryptos, stablecoins, has emerged; these cryptos are tied to an asset, such as the dollar or gold. So this class of crypto also decisively deals with volatility.
With growing ease of use and growing stability, the time is swiftly approaching when cryptos will challenge government monopolies for the creation of money.
A major political war is brewing!