Tempering the excitement about crypto with reality

The company is ready to embrace a more efficient form of payment, according to Stoyan Kenderov, chief operating officer at Plastiq, a payments, automation and cash flow management company.

Whether it is cryptocurrency remains to be seen, he told PYMNTS.

While there is “huge excitement about crypto, there is also huge uncertainty that most consumers are unaware of,” Kenderov said – including regulatory pressures, questions and price volatility. of the new asset class.

“The excitement comes from the fact that for quite some time crypto has been one of the fastest growing asset classes ever,” Kenderov said.

Indeed, PYMNTS’ April study, “US Crypto Consumers: Cryptocurrency Use in Online and in-Store Purchases,” showed that nearly 60 million Americans have owned digital assets in the past 12 months – up 18 million from 2021 – and more than a quarter would rather do business with merchants who accept it.

Read more: PYMNTS Data Shows Jump in Crypto Ownership, Willingness to Spend It

Cryptographic Concerns

“What is driving crypto volatility? said Kenderov. “How does the asset class correlate with other asset classes? All of this is in the background for most consumers.

Comparing the current state and understanding of crypto to a “get-rich-quick scheme” in which “a lot of people made a ton of money, but also a lot of people lost a lot of money,” he said. Kenderov that while the excitement may be understandable, it’s “groundless.”

It will take years to resolve issues such as the vague nature of who is behind many projects, concerns about the environmental impact of cryptocurrencies like bitcoin, and the difficulty of assessing the strengths and weaknesses of often complex protocols. behind these cryptocurrencies, he predicted. – as is governments’ assessment of what they will tolerate and how they will regulate crypto.

“Crypto was designed to be anonymous, to decentralize control, to add a layer of privacy,” Kenderov said. “It’s all very interesting, but as a society I don’t think we’re ready to admit that there won’t be restrictions against money laundering or terrorist financing. We have to find solutions for those.

Early days

“We’re in the very early days of digital currencies, and the current craze for crypto protocols and crypto coins is likely to die down,” he said, as long-term cryptocurrencies and more sustainable ones are beginning to emerge from the mass of 10,000 people. of projects.

“There are huge risks right now – regulatory risks, technology risks, security risks – that [require] a whole new level of risk tolerance,” he added.

For small and medium-sized businesses (SMBs) considering accepting crypto, he suggested starting slowly — accepting it for “5% of your total volume, not 50%.”

See also: PYMNTS Data Shows Crypto Use for In-Store Purchases Is Growing

Meanwhile, Kenderov said, “Payment automation is starting to permeate different areas… We’re seeing payments embedded in all kinds of applications. Tools that previously didn’t deal with payments now offer ways and means to pay. »

Businesses that want to improve payment automation and back-office accountability don’t need to wait for crypto, he added.

“There are tools and vendors like Plastiq that can add tremendous efficiencies right now,” he said.

There are also other flawless crypto solutions that can address some of the payment issues such as speed, cost, and scalability, such as real-time payment options like the Federal Reserve’s FedNow or digital currencies. central banks (CBDC) issued by the government that would provide the transparency and auditability of cryptocurrencies.

“Traditional monetary movement that settles digitally will likely compete with cryptocurrencies for speed, and it’s a viable contender for speeding up payments around the world,” he said. “I think society is ready to embrace a more efficient form of payment tools and payment rails, but ultimately the purpose of a currency is to make transactions possible, to make commerce possible.

“I definitely see crypto as part of that evolutionary path, but I don’t think current protocols are. They will evolve. »



On: Shoppers who have store cards use them for 87% of all eligible purchases – but that doesn’t mean retailers should start buy now, pay later (BNPL) options at checkout. The Truth About BNPL and Store Cards, a collaboration between PYMNTS and PayPal, surveys 2,161 consumers to find out why providing both BNPL and Store Cards is key to helping merchants maximize conversion.

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