How Will Cryptocurrency Trends Impact Businesses in 2021?

2020 has been a tumultuous year for the general market and a promising one for cryptocurrencies. Since Bitcoin emerged shortly after the 2008 recession, COVID’s stress on the economy has been crypto’s first real test as a safe haven currency. Crypto’s performance may not have been as revolutionary as some predicted, but it has been positive overall. Crypto’s time in the spotlight could lead to a significant impact on business as a whole. Here’s a closer look at how current cryptocurrency trends could impact business in 2021.

As crypto has gained more influence, related technologies have appeared more widely in banking. Blockchain, the underlying technology that enables cryptocurrency, has seen impressive adoption rates among major banks. More banks are using blockchain technology to verify transactions and manage financial data.

With blockchain banking becoming more popular, businesses will encounter the technology more often. Customers may also start to expect some of the same services from major companies. Banks are demonstrating the advantages of blockchain to the public, so the public may start demanding it in other areas.

Banks like J.P. Morgan have even started to pursue cryptocurrency over blockchain technology itself. With major players investing in crypto, it could mean more security and upward mobility for crypto companies. Businesses wanting to explore cryptocurrency will be able to do so in the comfort of the banks they already use.

One of the most significant trends in cryptocurrency is its growing government adoption. Most notably, China is releasing a national digital currency and has already started testing it in some cities such as Shenzhen, Suzhou, Chengdu, and Xiong’an—a new “smart” city in the making, southwest of Beijing, conceived by President Xi Jinping. As the digital Yuan sees more widespread use, international businesses may have to adapt to using cryptocurrency. 

Some American-owned businesses, like McDonald’s and Subway, also start participating in the trial of this currency. This national support for crypto is bringing unprecedented legitimacy and attention to cryptocurrency. As a result, digital currencies could become the norm for international trade before long.

According to a recent BIS report, 80% of central banks worldwide are researching the pros and cons of such a currency. Although crypto won’t overtake traditional currency in a short period, but businesses may still consider it. Corporations that want to secure their international future will likely have to adopt cryptocurrency support. Now that an economy as massive as China is embracing crypto, it may not be long before other countries follow suit.

Another potentially influential trend in the cryptocurrency market is an increase in government regulations. As crypto has grown, authorities have launched new tax regulations for cryptocurrencies and their valuation. Businesses with crypto assets will have to adapt to these new legislative movements.

At the moment, the SEC classifies crypto tokens as securities, but some state legislation is changing that. Companies could take advantage of these changing regulations and adopt crypto without considerable tax disruptions. These regulations could also make crypto investments a safer option for more businesses.

Before, the impact of cryptocurrency on business had not reached its full potential because of uncertainty. Many companies were timid to invest over concerns about unclear regulations. Now that governments are taking a firmer stance on the matter, businesses may feel more comfortable pursuing crypto.

The impact of cryptocurrency on business will grow as more consumers adopt crypto. As the COVID-related recession deteriorated faith in traditional currency, crypto investments have skyrocketed. Now that more people than ever are using cryptocurrency, consumers will start to expect more businesses to accept them.

This trend will continue to grow, with major players like Facebook moving into the crypto space. Facebook announced its cryptocurrency project in 2019, and they could launch it later this year. This movement, combined with banks’ embrace of crypto, could lead to a considerable uptick in crypto adoption.

In March 2021, both Visa and PayPal announced that they are also joining to make cryptocurrencies an accepted form of payment. Visa expected to make the transaction easier by allowing customers to specifically use the cryptocurrency USD Coin in transactions made across its payment network. 

Paypal is known to have 350 million users who will now be capable of adopting crypto (Bitcoin, Ethereum, Litecoin, or Bitcoin Cash) as a payment means. Also, its 30 million merchants will have the option of receiving payments in crypto. Any payment made in cryptocurrency will immediately be converted to U.S. dollars in order to complete a transaction.

Paypal was one of the critics of cryptocurrency as a sustainable currency. Now it is one of the biggest names jumping on the bandwagon. Along with others and PayPal’s support, there has been more demand for the asset class, thus contributing to its price rise. Apart from Paypal, the company also owns another popular payment platform Venmo which will expose another 70 million users to crypto payment. While these platforms are new to crypto, some other platforms are already making crypto payments wider.

To stay competitive in 2021 and beyond, businesses may have to accept crypto payments. If crypto eventually surpasses fiat currencies, it will take years to happen, but companies may still need to support it as an option. With a growing number of crypto users, more businesses will have to consider enabling these transactions.

2020 has proven to be a good year for all crypto markets, and expectations are for 2021 to be even a better year for Bitcoin and other cryptos. These cryptocurrencies have taken center stage as investors search for new safe-haven assets, driven by the COVID-19 pandemic. Due to its decentralized nature, Bitcoin has proven itself to be a “valuable form of digital gold”, qualifying itself as one of the strongest players in the digital currency world. As we enter 2021 and adapt to a new normal, social distancing and cashless transactions may further set the stage for cryptocurrencies. 

With the recent news, we can see that there are more companies from different industries joins the growing list of corporations that have added BTC into their business. Europe’s second-largest insurance firm, AXA, has become Switzerland’s first all-line insurer to offer its customers the option to pay their bills with Bitcoin (BTC), facilitated through a collaboration with the established cryptocurrency broker Bitcoin Suisse. Bitcoin payments will be accepted for nearly all AXA products, except for life insurance due to regulatory barriers to the latter. 

American real estate company Caruso, led by billionaire Rick Caruso revealed that they would begin accepting Bitcoin for rent payments at both retail and residential properties. The Los Angeles-based company offers stunning luxury properties in the area, including the Miramar Beach Resort, Palisades Village, Waterside at Marina Del Rey, The Commons at Calabasas, and many more.

Tesla now accepts bitcoin as payment for its cars in the US. Tesla CEO Elon Musk announced in end of March 2021 that it is now possible to buy Tesla vehicles in the U.S. with bitcoin. Tesla is using only internal and open source software, operates Bitcoin nodes directly. Bitcoin paid to Tesla will be retained as Bitcoin, they will not be converted to fiat currency.

Cryptocurrency will eventually hold significant sway over the business world. That shift could start as soon as this year, so companies may start to consider preparing for it. As crypto grows more legitimate among consumers and governments, businesses will have to adapt.