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Since the eruption of altcoins, the crypto space has seen a wide variety of wonders and unexpected events. Smart Contracts, Lighting Network, DeFi, Scams, Bubbles, and Failed Projects to name a few of the more obvious. In the midst of this frenzy, a fascinating concept emerged: Cannabis Crypto.
Some see these tokens as a possible solution to the cannabis industry’s banking problem that stems from the DEA’s obsolete Schedule I status as a controlled substance, thus preventing the entire industry from accessing institutions. banking, essentially forcing cannabis companies to operate outside of secure banking systems.
As such, many wonder if cryptocurrency might be the solution the industry is looking for. Could this be the way to bypass ordinary banking systems without a federal bill?
Right now, the relationship between cryptocurrencies and cannabis is in its infancy, but it will probably grow and flourish in the near future as the levels of crypto adoption. are increasing and technology is becoming more sophisticated.
When considering cannabis-specific crypto, the most established right now is the POT coin (CRYPTO: POT), a low-radar alternative coin that saw a huge pump and dump after Dennis Rodman had wore a POT T-shirt to his now infamous audience. meeting with North Korean leader Kim Jong-un. While the T-shirt, like the reunion itself, has made waves internationally, this type of appearance is never healthy for a financial instrument intended to be used as a long-term method of trading. . It now ranks at 1135 in CoinMarketCap.
The main issues facing cannabis tokens are adoption, market cap, and aim. Instead of bringing new technologies with innovative proposals, these cryptos fail to cope with the problem faced by the industry.
They are also insufficient because cannabis cryptocurrencies do not bring any innovation in their technology and are limited to a single industry, thus reducing their potential reach in the market. A currency must be widely used and desired to be adopted by listed companies.
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Additionally, cannabis cryptocurrencies can’t answer a simple question.
Why should businesses use them?
The fact that they are publicly linked to cannabis is not enough. The problem is that alt-coins fail to differentiate themselves from other coins. Most companies would prefer to use ETH, BTC, BNB, USDT, or any of the top 25 cryptos.
It would be unwise for a cannabis company to rely on any of the existing crypto-cannabis.
We asked Tyler Beuerlein, Chief Revenue Officer at Hypurs, why his company doesn’t use crypto in its daily financial transactions as a way to bypass the banking system.
Combining a highly regulated product with another highly regulated industry is a failure for banks and regulators. A company’s dependence on crypto could negatively impact its financial operations in the face of many potential consequences. They could suffer from unpredictable fluctuations in value, increased tax liability and even the loss of a company’s bank accounts or banking partnerships, Beuerlein told Benzinga.
It is probably much riskier for a business to use crypto to bypass traditional banking. Cryptocurrency actually needs banking services because funds associated with digital assets eventually need to be converted into traditional currency. Plus, contrary to popular belief, the vast majority of legal cannabis companies are in fact already in the bank anyway.
What about the future?
One possible way for the industry to adopt a specific blockchain-based token could be to form strategic partnerships with well-positioned companies. This would make the token more stable and make it easier for small businesses to adopt it as well. If not, companies would tend to choose tokens not specific to cannabis or other financial instruments.
Blockchain technology also offers cannabis manufacturers the ability to accurately track their production process from seed to sale, ensuring customers quality control and vigilant product monitoring.
Unless central banks start to symbolize their currencies, due to their practicality, immediacy and economy, I think so-called stablecoins have a chance to slowly join in international trade operations, Franco Amati, co -Founder of the NGO Bitcoin Argentina and Signatura, said Benzinga in an exclusive interview.
For the rest of what we call crypto, although the technology continues to advance, for the foreseeable future it will not cease to be a niche tool.
For now, unless someone finds a way to revolutionize the market, cannabis-specific cryptos remain impractical for the industry. Nonetheless, dispensaries would be wise to provide crypto payment methods for customers who choose to follow this financial trend.
Unlike cannabis, which has been consumed since the dawn of civilization, crypto is new to humanity. As it develops and evolves, it will undoubtedly deepen its connection to the cannabis industry. For now, traditional financial services remain the best option to meet the needs of the industry. As such, cash is still king when it comes to cannabis sales.
See more Benzinga
2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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