Today’s news regarding Visa building a platform for cross-chain digital currency payments brings up a number of questions and issues I wanted to address.
Firstly, the issue of “crypto” vs “digital currency/CBDC.” The two are not the same and in fact are at odds with each other. Refer to the original Visa announcement post to read about the difference.
Secondly, Flexa is threatened by Visa’s focus on CBDCs, as Flexa’s success depends on the mainstream adoption of pure crypto as a viable currency/legal tender. This is because Flexa’s use case involves collateralizing transactions that by nature are decentralized and therefore legally uninsurable/relatively slow. If CBDCs become prevalent and the default payment choice, Flexa’s use case will suffer, as CBDCs will essentially not need Flexa’s collateralization protocol. Consequently, the PR fight for crypto becomes critical, as ultimately the majority opinion of the people will impact/determine the exact outcome regarding what becomes the preferred payment method. (This is generally in the context of the U.S., as outcomes in other countries, particularly smaller, less stable ones, could prove very different.)
Thirdly, what I imagine could happen with CBDCs becoming dominant (in first world economies), is select crypto such as bitcoin, which will still prove useful as it is scarce and anti inflationary, may singlehandedly save Flexa/Amp, as there may be no other way for mainstream merchants to accept inherently valuable assets (though ultimately in CBDC) than through Flexa/Amp; again, this is assuming the people choose to hold and keep value in crypto like bitcoin to transact with versus switching to CBDC to transact with. This flexibility (for a consumer to pay in anti inflationary bitcoin while the merchant seamlessly accepts in stable dollar fiat) was the original purpose and namesake for Flexa, after all. But the opinion/mentality of the people regarding “store of value”/“legal tender” will be critical.
In conclusion, Visa’s focus on CBDCs/digital currencies poses a danger and threat to crypto in general and specifically to Flexa’s future mainstream adoption/success. However, in the event fiat somehow survives for another 100 years, due to Flexa’s inherent flexibility, it will still prove useful for the few remaining anti inflationary cryptos the people may insist on holding value with. (And of course Flexa may still prove significant in powering the transactions/economies of smaller, less developed countries that end up becoming crypto-denominated.)
For the smart investor, Amp becomes a sophisticated bet, a hedge, in a way, sure to see immense upside in the extraordinary event of crypto’s broad success, but with still something to gain in the event most cryptos become irrelevant/obsolete if CBDCs become the status quo.
Flexa therefore remains a worthy investment regardless of the exact fate of crypto at large, as its nuanced strategy of flexibility allows for a relevant use case in a broad range of outcomes.
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