USA vs. Cryptocurrency: Mass Adoption Explained

Why is the US having such a hard time adopting crypto?

Even during market downturns, we’ve seen cryptocurrency adoption grow in a multitude of countries. And yet the United States seems to be facing an endless stream of walls and obstacles standing in the way of mass cryptocurrency adoption and development. Not only that, but consumers don’t seem particularly interested in cryptocurrency outside of a small minority that is involved in investing and speculation. Why is the United States having trouble adopting cryptocurrency? Well, here are a few reasons why this is happening and some potential solutions that could bring the next 100 million people into crypto.

Consumers: Crypto? No Thanks

In some parts of the world, cryptocurrency has a very strong chance of becoming the standard means of financial transactions. This could be because these countries lack strong electronic payments infrastructure like banks and ATMs, credit card readers, and so on. As cryptocurrency transactions generally require nothing more than a low-cost smartphone, countries that have yet to develop this type of infrastructure can potentially adopt cryptocurrency quickly and easily without the need for any additional hardware.

Let’s consider the United States for a moment. Credit cards have been a mainstream payment method in the United States for decades. As a result, credit card culture is deeply entrenched in the United States and virtually all stores accept at least one type of credit card, if not multiple types. Not only that but with ATMs on every corner, transacting in cash is not particularly difficult, either. While out-of-network ATM fees can be an issue, a number of service providers like credit unions and other nontraditional banks offer ATM fee reimbursement to counteract this and make interacting with ATMs mostly free for their customers.

Now let’s consider using cryptocurrency as a means of payment for an average individual. The number of hurdles to jump is actually quite startling.

First, the potential crypto user needs to understand what crypto is and how to interact with it safely. They’ll need a digital wallet, and they’ll need to buy or trade for some cryptocurrency of their choice such as bitcoin. This also means they’ll need to understand how exchanges work. Then they will need to use what are arguably unfriendly wallet apps and try to navigate all the technical terms such as sending and receiving addresses made up of a nonsense string of numbers and letters, as well as understanding exchange rates that change every minute and transaction fees that are never predictable. Then, how do you explain something such as confirmation times and needing to wait for a miner to pick up and process a transaction? Needless to say, presenting this situation to the average American consumer is not an easy task.

Getting Consumers On Our Side

In order to remedy the situation, a number of steps will need to happen so that consumers will be encouraged to begin transitioning into using cryptocurrency and away from credit and debit cards. Here are a few things that we think would help that transition in the United States or any other developed country with a deeply entrenched credit card culture.

First, cryptocurrency apps will need to become much more user-friendly for the typical consumer. They should be as easy to use as any other mainstream mobile app like Venmo or Cash App. This is easier said than done, however, which is why Celsius is working hard on features like CelPay to make interacting with crypto assets more accessible and easy to navigate.

Next, not only do merchants need to accept cryptocurrency, but they should also offer discounts to customers for using it. Why should they offer discounts? That’s simple. Receiving payments in the form of cryptocurrency is far cheaper for the merchant.

Today, merchants that accept credit card payments through processing networks like Visa need to pay hefty and steadily-rising fees on each transaction. This problem has become so large that some businesses are deciding to no longer accept Visa cards. Many major retailers have also had to increase their prices to include these fees. That means even if you pay in cash, you’re still paying for the credit card processing fees, as it’s already baked into the price.

Offering discounts for cryptocurrency payments means that consumers can pay in crypto without a potentially greedy payment processor standing in the middle of the transaction. It could also encourage more merchants to accept crypto as they come to the realization that they can save incredible amounts of money by not paying credit card merchants.

Lastly, holding cryptocurrency should be just like holding cash, but better. It should be more than just a means of payment. That’s why Celsius created a different system that allows coin holders to earn interest while keeping their assets secured. Yes, you can earn a (very tiny) interest rate by keeping cash at a bank, but we know we can do better than a bank can.

In short, we believe that easy-to-use apps, merchant discounts for crypto payments, and making crypto more attractive than cash are what will bring consumers on board. This transition could take years, if not decades, to complete. But once the pieces are in place, mass adoption is largely inevitable.

Getting the Big Players On Board

Recently we posted an article about cryptocurrency regulation and what we think needs to happen. A large part of our argument is that large businesses and investment entities will stay out of cryptocurrency until regulations become clear. In addition to regulation, some additional processing infrastructure may be necessary.

Let’s imagine that a big retailer, comparable in size to Amazon or Walmart, wants to start accepting crypto payments. Let’s also assume that for some reason, they have decided to immediately settle all crypto transactions into US dollars. This would mean that a system needs to exist that could present the consumer with an accurate, up-to-date price in any supported cryptocurrency, receive the transaction, then immediately turn around and sell it at exactly the same price so that the business does not incur a loss or perhaps a taxable capital gain.

What we don’t know is if big businesses will invest the time and money necessary to create these networks for themselves, or if they will rely on a third party processor such as Coinbase or another exchange that can deal directly with US dollars. If these businesses use a third-party processor, then the fee they charge for this service would need to be much lower than what the credit card companies are charging in order to remain competitive.

Another benefit to using cryptocurrency in this way is near-instant settlement. For those unaware, settlement is when the actual movement of dollars is completed. When you pay a store with a credit card, that store will not get your payment for quite some time, in some cases as long as a few weeks.

With the above mentioned instant cryptocurrency settlement and exchange system, merchants would have the money in their account within minutes instead of days or weeks. This could be a game changer in how businesses of all sizes operate and interact with their cash flow. It could open doors that we have yet to even imagine.

Final Thoughts

Countries like the United States will have a tough time fully transitioning into cryptocurrency, and a lot of that is due to competition from entrenched players with a vested interest in staying on top. However, thanks to the decentralized nature and not-for-profit style of operation that cryptocurrencies boast, cryptocurrencies such as bitcoin will almost inevitably come out on top no matter how long it takes.

What’s also interesting is that the transition to cryptocurrency could be one event where the developing world will get a first-mover advantage, leaving developed countries like the US needing to work hard to catch up.