Three Businesses Hopping On Crypto Bandwagon In COVID-19 Era

Monday, 2 November 2020, 5:45 pm
Press Release: Kalkine

Summary

• Cryptocurrency is gravitating towards becoming a popular investment asset in Kiwi Land and the rest of the world.
• PayPal has announced its plans to enable US-based PayPal users to buy and sell digital currencies via its cryptocurrency service.
• Auckland-based Power Finance is planning to launch a digital New Zealand dollar early in 2021.
• JP Morgan has recently introduced its dedicated crypto unit, called Onyx, to house its digital currency and blockchain efforts.
• While businesses and companies worldwide are actively embracing cryptocurrencies, digital currencies are unlikely to replace fiat currencies in terms of usage anytime soon.

Cryptocurrency mania is back with a bang! Bitcoin is hitting the headlines again after shooting past USD 13,000 mark recently for the first time in nearly three years. Bitcoin’s unprecedented price rally in October seems to be reviving investors and businesses’ interest in the cryptocurrency space.

Bitcoin has jumped almost 27 per cent over October 2020, reaching its highest level since 2018 cryptocurrency crash. The beloved cryptocurrency appears to be reiterating its safe-haven status amidst COVID-driven uncertainty in the financial market.

Additionally, businesses and companies are actively embracing digital currencies that were once considered as just assets prone to bubble explosions. Consequently, cryptocurrency is gravitating towards becoming a popular investment asset in Kiwi Land and the rest of the world.

Against this backdrop, let us discuss three promising trends reflecting the growth of institutional interest in the digital currency market worldwide:

PayPal’s Quantum Leap: Extends Support for Cryptocurrency

To bolster people’s understanding and adoption of digital currency, PayPal has marked its entry into the cryptocurrency market. The online transaction giant recently announced its plans to enable US-based PayPal users to buy and sell digital currencies via its cryptocurrency service.

PayPal’s move is expected to enable its customers to use digital currencies while shopping from 26 million sellers under the PayPal network as early as 2021. The Company’s huge merchant network is anticipated to drive greater mainstream acceptance of cryptocurrencies, including Bitcoin.

PayPal’s step seems significant in terms of making crypto assets accessible to a more conventional audience of potential new adopters. The current scenario calls for several other digital payment companies to capitalise on opportunities unfurling in the cryptocurrency space.

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Power Finance’s Potential Plan: Eyes Launch of NZ Digital Currency

Auckland-based Power Finance is planning to launch a digital New Zealand dollar early in 2021. The financial services firm intends to introduce the first sovereign-backed digital currency of the world (Power Dollar) in NZ.

According to the firm, each Power Dollar will be backed by an NZ dollar held by Inland Revenue under its tax-pooling laws. Power Finance is expected to seek registration from the central bank after the launch of its digital currency.

Interestingly, Kiwi Land has been optimistic about the use of cryptocurrencies and digital assets for the last several years. NZ was the first nation to legalise the use of cryptocurrencies in salary payments in 2019 and consider cryptocurrency as a property that is capable of being held on trust.

Power Finance anticipates Power Dollars attaining a status of legal tender money in Kiwi Land over time. However, the NZ central bank has denied any engagements with individual/private entities for the products/services they offer. Importantly, the central bank is running its own programme analysing the future of the cash system in NZ.

JP Morgan’s Big Win: Sets up New Blockchain Division

International investment bank JP Morgan has recently introduced its dedicated crypto unit called Onyx, to house its digital currency and blockchain efforts. The launch follows the adoption of the Company’s digital currency (JPM Coin) by a big tech client for commercial use for the first time this week.

The financial services firm intends to capture the significant shift towards cryptocurrencies in the financial services industry via its new business unit, Onyx. The Company remains upbeat over the future of cryptocurrencies, including bitcoin, which it expects to double or triple in price if current trends persist.

JP Morgan’s move is anticipated to give a leg up to the broader cryptocurrency and blockchain industry, where mainstream adoption is advancing. The Company expects millennial’s preference of cryptocurrency over other alternative investments to bolster growth prospects of the digital currency market.

Bottomline

Businesses and companies worldwide are actively embracing cryptocurrencies amidst COVID-19 and related structural shifts. However, digital currencies are unlikely to replace fiat currencies in terms of usage anytime soon. Besides, fears continue over cryptocurrency market becoming a victim of another crash, with Bitcoin surging back to price levels seen before the bubble explosion in 2018.

Interesting Read:

Five-Point Reference Guide for Investors to Wade Through COVID-19 Recession

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