PayPal, Visa and Swift Developments Are a Harbinger of Adaptation

We are leaving behind a week of high geopolitical tension. Gold, which broke a record last week, is closing this week with a horizontal trend in dollar terms. Bitcoin is; The week it opened at around $65,500, it closed at around $62,000, seeing a loss of over 5%. The biggest igniter of the past week was the three-week series of positive entries on the institutional side, that is, Spot Bitcoin ETFs, was broken. A total outflow of nearly 300 million dollars was recorded this week. The price movement in Bitcoin was also negatively reflected in other cryptocurrencies.

Although the positivity of the non-farm employment data on the last business day of last week had a positive impact on the markets, it could not cover the negativity throughout the week. With these data, a 25 basis point interest rate cut for the FED decision on November 7 came to the fore. This week, we will follow the US CPI, which will be announced on Thursday.

What we need most to see an increase in value in cryptocurrencies is adaptation. As the usable areas of cryptocurrencies increase, it is inevitable that new people and institutions will enter and invest in this field. New users will encourage others, and incoming investments will stimulate new investors with increased appetite. For this reason, it is useful to carefully follow the news published to increase adaptation.

I like to give PayPal’s news as an example in this situation. PayPal during the great bull run in 2020; It was announced that it opened its cryptocurrency trading and custody service to its 26 million users. In Bitcoin’s journey to 65 thousand dollars, the time period in which this news came corresponds to Bitcoin being around 10 thousand dollars. Of course, I am not saying that Bitcoin increased its value thanks to this news, but I am trying to underline that important news can fall on the markets that can create a domino effect rather than a butterfly effect.

While we gave the example of PayPal, according to a report from Bloomberg this week; PayPal made a payment to EY, one of the auditing and consultancy giants, with its own cryptocurrency, namely its stable cryptocurrency PYUSD, equivalent to one dollar. It was reported that SAP, one of the leading applications of the corporate world, was also used in this process. Let’s leave aside the fact that PayPal is promoting its own cryptocurrency. This incident, which is an important case on the use of cryptocurrencies in inter-institutional payments, will remain a pioneering example for cryptocurrency payments between institutions, as it has a much faster settlement process compared to the current banking system.

As additional information here; Let’s also talk about the product called Tokenized Asset Platform, which Visa introduced last week. With this product, banks can issue their own stable cryptocurrencies on the blockchain. It is known that BBVA has started trials on the product. Large institutions and organizations; It may choose to issue its own cryptocurrencies in order to keep and collect capital under its own control.

Moves by giants such as Visa and Swift to increase crypto adoption are accelerating the integration process of traditional finance with the crypto ecosystem. Swift stated that digital asset transactions will be carried out on its network serving more than 11,500 institutions as of next year. Swift, which has previously experimented with important partners of the ecosystem such as Ethereum and Chainlink, will try to get its share of the cake in international transactions by getting involved in cryptocurrency processes with these moves.

To summarize; As banks, payment institutions and stakeholders who form communication networks between institutions increase their services in the cryptocurrency ecosystem, they will attract players within the existing financial system towards the crypto ecosystem and support the increase in adaptation. These adaptations show that traditional finance will inevitably integrate into the crypto ecosystem and this process will accelerate.

LEGAL NOTICE

Investment information, comments and recommendations on this site are not within the scope of investment consultancy. Investment consultancy services are offered individually by authorized institutions, taking into account people’s risk and return preferences. All information and analysis, including verbal, written and graphic, on this site or within the scope of our e-bulletins; It does not constitute any guarantee or warranty as a basis for any decision and is shared for information purposes only. Coindesk Türkiye may change or delete the information in question without the need for prior approval, notification or warning in any way. Therefore, making an investment decision based solely on the information contained herein may not produce results that meet your expectations. Coindesk Türkiye and its employees do not have any liability for any damages that may arise from comments on this site, incomplete information and/or not being up-to-date.