Crypto is moving inevitably more mainstream.
Sure, some people deny that is the case. Then, again, there are people who believe that the world is flat or that the moon is made of cheese (yes, really).
But just as you should probably ignore the opinions that moon cheese believers have about the moon, you shouldn’t deny the evidence that is being reported about cryptocurrencies and their broadening acceptance.
And a recent move by major U.S. financial organization just adds more credence to the coming normalization of cryptocurrencies in society.
What happened?
Everyone who has done any investing in the U.S. at least knows the name Nasdaq. According to Jim Probasco with Business Insider, it’s the second largest stock exchange (behind the New York Stock Exchange (NYSE)), based on market cap, and it’s the oldest and largest stock exchange in which the trading is handled electronically as opposed to on a physical trading floor.
All that to say, Nasdaq is a major component of modern financial systems.
And they recently made a major deal. A Nasdaq press release noted that they “unveiled a new partnership [with Seturion] to drive the modernization of Europe’s capital markets infrastructure through tokenized trading and settlement.”
Seturion is a pan-European settlement platform for tokenized assets. And just to be clear, tokenized assets are assets associated with a blockchain.
In other words, Nasdaq just partnered to be able to settle transactions across Europe based on tokenization technology, the kind that cryptocurrencies use for their security and transparency.
Of course, the big question for some people is why would Nasdaq do this? Doesn’t the current way of doing business work?
And the answer is, yes, the current system works. But by moving to a tokenized settlement system to move funds, they would both speed up the settlement process so that investors get their funds more quickly, and reduce the costs of those settlements at the same time.
And that means more money in everyone’s pockets.
But Nasdaq isn’t the only big player moving to use tokenization and crypto for settlements and to move funds.
Other ways that the financial industry is transforming with blockchain
It’s not just Nasdaq moving to work with tokenization. For example, as I’ve talked about before, Ripple/XRP has been used for bank transfers to reduce time and costs involved in the process.
And don’t forget stablecoins.
Stablecoin use has increased, also. Will Canny with Coindesk notes that total stablecoin market cap has reached about $312 billion, up some 50% year-over-year.
That’s a huge number and obviously massive growth, but it’s the other details which may be more relevant here:
While most U.S. dollar-denominated stablecoin activity, mainly in Tether’s USDT and Circle’s USDC, still comes from crypto trading, accounting for about 90% of volume, the bank said adoption is expanding across payments, remittances, treasury operations and tokenized assets, increasingly linking traditional finance with decentralized finance.
In other words, banks are using stablecoins more and more to move money, settle payments, and other common banking activities, showing that stablecoin is another crypto-linked method used for these purposes. TradFi and DeFi are working together for once, rather than waging yet another turf war.
What may not be clear to some is how and why they use crypto this way.
Why are financial institutions using crypto this way?
The biggest reason why is, of course, has to do with both cutting costs and increasing profits. They save money because using blockchain for funding and settlement costs less than the old-school technologies we’ve been relying on for decades.
But the making money aspect is absolutely important, too, and that aspect comes from the increased speed of funds transfers and payment settlements.
When it comes down to it, banks are run by people, and bank customers are people (obvious, I know). And people would rather not wait to get their money.
So, faster settlements become a selling point to bring in more business.
And these faster settlements and quicker money transfers are facilitated by the fact that cryptocurrencies are (surprise!) first and foremost currencies.
So, crypto has value as an asset, but has all of the benefits of liquidity that other types of currencies have, too. But with the speed and portability of being digital. And the additional benefit of not being managed by anyone’s central bank.
All of these are reasons why crypto’s mainstream acceptance continues to grow, and there are no signs of it slowing down. To me that means it’s not too late to get in on the ground floor of the future of money. Not everybody can start a bank (think of the regulations!) but everyone can diversify their retirement savings with cryptocurrencies. If you want to position yourself to profit from growth in the future of finance, learn more about the pros and cons of diversifying with cryptocurrencies. Or, if your due diligence is complete and you’re ready to get started, you can open a Digital IRA with BitIRA right now in less than 10 minutes.
