A year after the devastating blow of the coronavirus to America, the country’s economy acts like it was no big deal. Incessant printing of money, and stimulation packages one after another. The GDP is growing, people are spending, and the stock market is going all-time-high. There’s enough money for everyone. However, there is one undesirable detail in this almost flawless picture – the equally rapidly growing inflation, which rose 4% during the last 12 months, now reaching 5.4%.
The Rich Ask, the Bank Gives
That is why even previously risk-averse investors have found an outlet in the face of cryptocurrency, particularly Bitcoin, as a hedging instrument and non-inflationary asset to protect their portfolios. Well, bankers are ready for such a demand.
Over the past seven days, three Wall Street banks began to integrate crypto into their system. Bank of America allowed bitcoin futures to trade for certain customer categories, J. P. Morgan allowed wealthy clients to pump money into crypto, and Goldman Sachs published a family office report explaining that ultra-high-net-worth individuals were interested in digital assets.
Tennessee’s New Crypto Deal
The situation became even more interesting when news from Tennessee emerged. There Scott Conger, Jackson’s mayor, and crypto optimist, called digital gold the only “fix” for inflation. He also added that the city has started to study the methods to accept payments in cryptocurrency, including property taxes and wages. For this purpose, authorities established a separate blockchain task force.
What the Mayor initiates is crypto-based payroll conversion as an alternative for citizens. Explaining his idea, Conger said: “Think of it like you’re investing in the stock market. What do you want to do? You want to diversify the investments”. So for him, it’s about offering a new way of payment without canceling the old one.
But Konger also has a more radical remedy for the crisis. He wants to mine money to stop raising taxes. The mayor is confident that the extremely low costs will pay off many times, so the risk is justified.
Looking Forward to the Future
Undoubtedly, it’s too early, to sum up. No one says that the financial and security risks associated with investing in cryptocurrency do not exist.
But the fact that local authorities are eager to be at the forefront is a big sign for the industry. The idea of Bitcoin and altcoins as legal tenders no longer seems illusory. El Salvador has already legalized BTC, while Germany and Australia support crypto with money and reforms. Moreover, miners even managed to solve the energy issue, judging by the example of Viridi ETF.
Will we see the United States integrating crypto during the next decade? Possibly not. But what can be said for sure, we see a compromise emerge. And that’s already a lot.