Welcome To Our Hawley Advisors Blog

We hope you find the articles on our blog informative and helpful. You are always welcome to chat with us if you have any questions about your personal financial situation.

A Window into Institutional Adoption of Digital Currencies

Institutional adoption of digital currencies and payment methods is on the rise. We are seeing a tectonic shift in the payments landscape along with the rise of Bitcoin. However, behind Bitcoin, blockchain companies and projects are looking to reinvent the way individuals and entire industries transact across the entire global industrial landscape.

One of the the core concepts behind blockchain is "trustless" transactions which essentially means transactions between two parties that are controlled by a piece of computer code "A smart contract" that is programmed to embody the transactional details and execute automatically. Essentially any "exchange" of property or digital property can be programmed accordingly removing the need or reliance on centralized parties or intermediaries to broker an exchange for fees. The movement to decentralised finance for example aims to remove "banks" and "brokers" as intermediaries allowing what is known as "peer" to "peer" transactions. Individual A can buy a stock or any asset directly from Individual B in a secure and trustless manner or Individuals can send monies "peer to peer" directly to one another without a bank as an intermediary.

Every transaction on the blockchain is recorded in a tamper proof ledger. No one can go back in time and modify the ledger which makes blockchain one of the most secure and transparent technologies in history to date.

The industry is still in its infancy and is evolving at breakneck speed. Yes, there is fraud and "smart contracts" which are programmatic code can get hacked if they are not well executed. However, conducting fraud on the blockchain is the last place you want to do so if you are a criminal as the blockchain is transparent and traceable. Security and technology is evolving and getting more sophisticated and increased "ease of use" will make this ecosystem increasingly accessible. Insurance companies have also come into the market to provide risk coverage in decentralized finance applications. 

What started out as movement led by a small group of highly progressive cypherrpunks is now becoming institutionalized and beginning to go mainstream. In the last three months alone the number of users on crypto exchanges and market places doubled from 100 million to 200 million users worldwide.

We are witnessing the beginning of what could be a very marked shift in adoption of blockchain across the globe over the next 5 -15 years that can impact every industry.

In the world of instituional finance here are some interesting adoption facts:

  • Circle has announced plans to become crypto’s first “full-reserve national commercial bank under the supervision of the U.S. Federal Reserve, U.S. Treasury, Office of the Comptroller of the Currency (OCC), and Federal Deposit Insurance Corporation (FDIC).
  • Visa is partnering with over 50 cryptocurrency companies including FTX and Coinbase to allow clients to spend and convert digital currencies through its card program.
  • Paypal is offering clients the option to buy and sell crypto currencies in their accounts and the ability to pay any of its 25 million plus merchants using their preferred digital currency.
  • PNC Bank, the sixth-largest bank in the U.S., plans to offer crypto investment services to clients
  • Coinbase has reported that 10 of the top 100 hedge funds by assets under management (AUM) are among its clientele. It also reported having over 46 million accounts worldwide.
  • In December 2020, one of the oldest insurers in the USA with over 5 million customers, "Mass Mutual" (founded in 1851) announced that it had purchased $100 million worth of BTC. It also took a $5 million equity stake in New York Digital Investment Group (NYDIG), a digital asset management firm.
  • The NYDIG (New York Digital Investment Group) will enable 650 U.S. community banks and credit unions to make bitcoin purchases available to their customers.
  • Mastercard added seven startups to its engagement program focused on supporting fast-growing digital assets, blockchain, and cryptocurrency firms. The companies will work with Mastercard to make it safer and easier for people to buy, spend, and hold crypto.
  • JPMorgan will soon offer a passively managed bitcoin fund in-house to private clients. 
  • Venmo which is owned by PayPal launched a new crypto cashback credit card.
  • Neuberger Berman, which has $400 billion assets under management, has expanded its commodity-focused fund to include bitcoin and Ethereum futures.

VISA's partnership with over 50 crypto companies will make it easy for clients to convert and spend digital currencies at 70 million merchants worldwide, even those that do not accept digital assets.

"The merchants don't have to change anything," Cuy Sheffield, Visa's head of cryptocurrency, told Insider. "It will be the same as any other Visa transaction to them. But on the backend, the crypto assets are instantly converted into fiat."

Sheffield also said that with more than $1 billion spent on crypto-linked Visa cards in the first half of 2021, he is optimistic there is more to unlock.

The next 5-10 years are going to be interesting. The biggest financial institutions and investment Guru's are moving into the blockchain. If the adoption rates to date continue along the same trajectory, we will see continued growth and momentum in institutional and individual adoption of digital currencies and the blockchain altogether in businesses and industries worldwide.

 


 

What is a Head & Shoulders Pattern?
The Import of Volume - Technical Indicator Series

Main Menu

The Hawley Communique

Sign up for free to receive our signature quarterly reports.Not only will they keep you informed, you will get a unique and up to date objective financial perspective to navigate your pre and post retirement. You will also receive our retirement planning article series that provides helpful information about a variety of topics.

Subscribe Here

Hawley Advisor Publications

Download our free marquis papers written to provide valuable and actionable information to help you plan for your retirement and asset protection

Download Here

Company Info

Hawley Advisors
1600 South Main Street, Suite 190
Walnut Creek, CA 94596
Phone: 925-906-9800
Fax: 925-906-9884
info@hawleyadvisors.com

 

 

Hawley Advisors is an investment advisor, registered with the State of California. Any investment ideas or strategies on this website are for the purposes of education and general information only and should not be construed as specific investment advice. For more information about our firm please check the SEC Public Disclosure website: https://www.adviserinfo.sec.gov/

 

Copyright © 2024 Hawley Advisors. All rights reserved.