Mass Adoption of Crypto: It’s Coming with Regulation!

September 03, 2019

Randy Tillim, CEO of Clarus Merchant Services, Discusses Crypocurrency

As the CEO of Clarus Merchant Services and a member of the merchant service and processing industry for over 20 years, I’ve seen a lot of emerging technologies and payment solutions that were going to revolutionize how consumers buy and sell goods.  I deliberately moved into the electronic payment industry after personally owning thousands of ATM machines.  I saw an incredible opportunity for the future of cashless payments, which would solve the need for better transparency for merchants who were working in a convoluted system wrought with hidden fees. I knew this from personal experience as I was once a merchant myself with several restaurants. 

Today, the big question that I am consistently asked is, “How is Cryptocurrency going to disrupt the main stream electronic payment industry?” 

The transfer of assets has always been based on trust. Like the early years of crypto, the early years of banking in the U.S. was like the Wild West, as there was little regulation over banks and how they conducted business. That lack of trust led to the Great Depression of 1929. Trust was restored to the money system after the government reorganized its federal oversight of banks and added FDIC insurance for deposits. 

Trust in private financial institutions also played an important role in the mass adoption of credit cards. The first credit card – the Diner’s Club Card – was created in 1950. But the adoption of this new method of payment didn’t take off until Bank of America and other financial institutions issued the cards that established the Visa and MasterCard systems.

Today, cryptocurrency is at a similar crossroads.  Less than a year ago, it remained in the fringes and even went through its “Crypto Winter.”  But last fall, crypto’s image began to change as major organizations began to announce their own venture into issuing digital coins. It started with JP Morgan’s announcement that it would issue a coin.  But it was Facebook that brought crypto into focus as the mainstream and digital media pushed the news of Libra.

With the U.S Senate Banking Committee recently holding hearings, it’s clear that if Crypto is going to take mainstream transacting adoption it must have the regulatory oversight that credit cards do so all of us can feel safe in trusting those transactions.  “Crypto is a new asset class and should be regulated as such,” Circle CEO Jeremy Allaire said. That’s a sound point. Regulation can create parameters and instill the trust people look for in managing – and safeguarding their money.

I believe digital currencies are here to stay and they offer consumers many benefits that go beyond convenience, but mass adoption will only happen when consumers trust the system.  Regulation is the answer that everyone is waiting for as cryptocurrency moves off the fringes and into people’s wallets, and while many of the crypto traders will balk at seeing their profits decline, it’s the right thing to do.  At Clarus we are keeping a close eye on this market as we work with merchants to maximize their payment solutions and manage their fees.  Those who are not ready to support customers in processing these new payments in the future will be left in the shadows of digital currency.   

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