Crypto, crypto, crypto…Wherever you go, whoever you talk to, crypto must be mentioned. In the last few years, and especially in the last few months, virtual currencies and digital tokens have seen a true expansion. More and more people are getting interested in crypto and are starting to trade in them. As a result, the importance of cryptocurrencies is rising.
Naturally, corporate giants recognized the upward trend and did not want to miss this “historical moment” to create a completely new way of doing business by entering a new market that generates huge profits.
Recently, Venmo, PayPal’s mobile app used for digital payments, decided to allow its users to buy, sell and hold digital assets using this platform. It will be possible for them to invest in Bitcoin, Ethereum, Bitcoin Cash and Litecoin, starting with as little as $ 1. That way, the advantages of cryptocurrency payments such as easy access, efficiency and the resilience of the financial system itself are emphasized.
With more than 70 million users, Venmo is one of the most popular digital payment platforms, especially among young people. Therefore, this move of the company will once again lead to an increase in the value of cryptocurrencies, but also the number of users of cryptocurrencies. Like PayPal, Venmo used the services of Paxos, which deals with the so-called blockchain infrastructure.
As you probably recall, Paypal was the first to provide its users with the possibility to buy, at the end of 2020. As expected, the significance of PayPal’s decision to enter the cryptocurrency business was huge for the development of the crypto community. In the second quarter of 2020 alone, there were as many as 346 million active PayPal accounts that processed an incredible $ 222 billion in payments. Bitcoin broke the $ 16,000 mark after the news of the company’s decision spread and has since been skyrocketing. Although PayPal is not the first company to engage in the cryptocurrency business (for example Square Cash enabled the use of Bitcoin on its application in 2018), as a giant in its sector, it significantly influenced the increase in the number of cryptocurrency users.
Paypal is not the only company that recognized the potential of cryptocurrencies. In early 2021, Tesla followed the lead and bought Bitcoin worth $ 1.5 billion, while also accepting payments in the cryptocurrency when selling its cars. Thereafter, Bitcoin once again reached an all-time high of around $65, 000. However, the electric carmaker eventually gave up on the move citing environmental concerns.
The growth trend in cryptocurrencies is expected to continue. Some go so far as to believe that these currencies will replace existing fiat currencies. For now, we cannot state with certainty whether cryptocurrencies are the “future” or the “present”, but it seems that the total replacement of fiat currencies is still decades away from our reality. However, we cannot remain blind to current events in the crypto world. Its growing importance for financial markets is also seen in the constant discussion at both national levels and the international level. Regulators worldwide are discussing how to introduce crypto to existing financial markets and flows. Many countries, including Serbia, have begun introducing regulations that define and regulate digital assets. The Serbian Digital Property Act came into force in June this year and is the first regulation that provides a legal framework for virtual currencies and digital tokens in the country.
The impact of the growing expansion of digital currency users will be seen in time. What is indisputable is the fact that we live in very interesting times when it comes to not only the current way of doing business but also the current way of life.
Authors: Danica Misojčić, Teodora Ristić, Mina Kuzminac
