Reflecting on a year that brought its handful of challenges, 2020 proved the importance of adaptation. Life in a digital world became inevitably crucial, and as changes in everyday life were made rapidly, the cryptocurrency ecosystem followed suit.
With more talk than ever surrounding the world of decentralized banking, we’ve compiled the top stories of 2020.
Throughout the year, our team focused on understanding the importance of digital asset data security. With the emergence of quantum computing capabilities, we’ve identified Crown Sterling as one of the leading engineers of the future of quantum-resistant data security. Led by mathematician Robert Grant, Crown Sterling has created the first quantum-resistant digital asset, the Crown Sterling token. The token, protected by their new quantum-proof encryption algorithm, CrownEncryptOTP, provides lifelong protection of user-sensitive data. As cryptocurrencies grow vulnerable to quantum-hacking, this future-proof digital asset provides a pathway toward progressive and sustainable encryption advancement.
In October, the crypto ecosystem welcomed PayPal into the space. The company announced they would be adding Bitcoin and crypto transactions to their payment options for users. CEO Dan Schulman hopes this change will drive momentum for PayPal’s 375 million users and registered merchants to become more comfortable with digital payments through the crypto ecosystem. Tech giants Square and Venmo followed suit with integrating buying, holding, and selling capabilities for cryptocurrencies. The commercial adaptation by large institutions is positively shifting public comfortability towards digital payments as they are continuously mainstreamed.
Aside from the use of digital assets in big tech, Wall Street began to embrace Blockchain as well. Leaders in the finance world such as J.P Morgan, Guggenheim, and AllianceBernstein have all noted that cryptocurrencies are here to stay. Overcoming CEO Jamie Dimon’s 2017 claim that Bitcoin was a “fraud,” JP Morgan proceeded to release their ‘JPM Coin,’ in addition to their new branch for digital asset operations and custody services, Onyx. JPMorgan spearheaded the use of blockchain on Wall Street, and it is no surprise that Guggenheim and AllianceBernstein were so quick to follow as blockchain proves to be a profitable and efficient way to secure transactions without lag time or third-party interference. Bitcoin is becoming increasingly valued as a medium of exchange, as growing adaptation occurs on Wall Street and beyond.
As Bitcoin continued to gain value with record-breaking prices, business intelligence company MicroStrategy bought 70,470 Bitcoin, a total of 1.1 billion dollars. CEO Michael Saylor says, “The acquisition of additional bitcoins announced today reaffirms our belief that Bitcoin, as the world’s most widely-adopted cryptocurrency, is a dependable store of value.”
A common saying for the new year: out with the old, in with the new. In the world of Fintech, rather, out with traditional financial services, in with decentralized banking. Brian Brooks and the OCC began emphasizing the cost effectiveness and efficiency of removing third parties. As we saw with the shift from postal services to email, instant and direct financial services solutions are now being provided by decentralized finance (Defi) platforms to simplify the future of banking. With Defi’s increasing capabilities, the entire banking system will soon be forced to adopt blockchain technology.
In September, Kraken, one the largest US-based crypto exchanges, made history as the first digital asset company in the United States to receive permissions as a bank charter. The Wyoming-based Special Purpose Depository Institution will offer depository, custody, and fiduciary services for cryptocurrencies. The integration of both banking efforts along with crypto services is projected to expand into a variety of initiatives including cryptocurrency debit cards, mobile banking, etc., paving the way for regulatory adoption from banks everywhere.
In the last month of 2020, the SEC filed a lawsuit against Ripple Labs. The company had raised over $1.3 billion dollars through the sale and distribution of XRP, which was recently declared an unregistered security. XRP is one of the largest and most valuable coins in the crypto industry, known for its rapid speed and accessibility in over 50 countries. The SEC plans to ban Ripple’s ability to participate in XRP’s market trading. The case is being referred to as “the crypto trial of the century.”
In 2021, we expect the pace of crypto adoption and innovation to continue as competition from big tech grows. Crypto’s integration into banks and the strengthening of regulation will add to the continued growth of the ecosystem, making for 2021 to be another year of crypto’s outperformance of traditional finance.
By Liam McDonald