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Tim Draper is a trend spotter best known for being the founder of Draper Fisher Jurvetson, where he led the investment in Skype. He is also known as a thought leader for his book The Startup Hero and Draper University, his college. After all, he even starred in his own television show, Meet The Drapers.
Today he is a so-called "Bitcoin Bull" because he keeps his assets in Bitcoin instead of banks. As a result, he is paying close attention to fintech solutions in Silicon Valley and is currently researching an emerging market that many are calling the "DeFi Bubble". “But fintech solutions are more than just a trend; they are becoming an integral part of any business.
"People are switching to Bitcoin as a safe haven like gold," Draper recently told me. "And people are switching to bitcoin because it's the future of trading. I think if you go out four or five years you will try and buy a Starbucks coffee with a fiat currency tied to a government, and they'll laugh at you. You'll be the old person pulling small change out of your purse. "
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And it's not just consumers who focus on using these solutions. Together, consumers and businesses are embracing digital currencies and moving the circulation at a rapid pace. In May 2020, more than $ 10 billion per Coindesk post was reached. This is especially true when assessing the increased presence of companies like Visa and Mastercard in space.
According to a recent blog post by the company, Visa noted that it is continuing its work with licensed and regulated digital currency platforms like Coinbase and Fold to bridge the gap between digital currencies and their existing global network of 61 million merchants.
Elsewhere, Visa and its competitors have hired policymakers and global organizations to help shape the dialogue and understanding of digital currencies, including Visa working with the World Economic Forum and working on a number of central bank policy recommendations that explore the concept of central bank digital Currency (CBDC).
From crypto to contactless
Long before the financial and health impact of COVID-19 accelerated the move to these fintech solutions, retailers were increasingly offering cashless payment options to improve the overall customer experience. What started as a fun trend that blended cutting-edge technology with brevity and efficiency at the point of sale has now become a global phenomenon as companies of all sizes continue to use fin-tech solutions to step up with the digital-first culture hold .
As evidence of this surge in digital commerce, a new survey shows that 78 percent of consumers have adopted new spending habits, forcing small businesses (SMBs) to embrace burgeoning fintech solutions like tap-to-pay and contactless card options, to survive .
But not only SMEs are adapting to these trends. Large retailers and restaurants must be willing to change their approach to keep up with fintech solutions that meet current consumer demands. Take Dunkin ', a retailer that has been a leader in enabling tap-to-pay technology in its US locations. According to another recently published Visa blog post, the percentage of in-store Dunkin Visa transactions made with a tap of a card or mobile wallet grew more than 120 percent from June 2019 to June 2020.
However, when you dig deeper into the importance of leveraging fintech solutions, it's not just security and touchless options that are essential. Bitcoin and cryptocurrency could be the next answer. Stablecoin accounts are a particularly good option for contactless trading. They allow people to store their assets in USD while managers earn income from conventional checking accounts thanks to DeFi savings rates. And now stablecoins users can spend their money freely thanks to the many debit cards being introduced by companies like Coinbase, Fold and Swipe.
"While DeFi offers high returns on stable coins such as Kava's USDX, it is currently limited to a tech-savvy user base," Brian Kerr, CEO and co-founder of Kava Labs, the fundamental protocol for modern financial applications, recently told me in the future DeFi will look very different as more financial institutions like Coinbase and Binance introduce debit card products, making USDX easy to spend in retail stores and making the lucrative DeFi returns more accessible to the average person. "
That interest is fueled even further when you consider that retail demand for Bitcoin is expected to double by 2024. In fact, new data from ZUBR shows that retail investor bitcoin accumulation continues to grow despite economic declines, largely due to record growth in the number of bitcoin whales and a new all-time high in the number of wallet addresses that contain less than one bitcoin . What is more? Bitcoin recently posted the third best Q2 performance ever, showing continued growth in investor participation amid changing consumer demands and growing awareness.
"I think all of these financial resources will have to be powered by bitcoin at some point, and retailers should know they're coming," advises Draper. "If you're a retailer now and you don't accept Bitcoin, reconsider it, as that saves you 2.5 to 4 percent compared to every time someone steals a credit card."
And as a retailer, very thin margins mean every penny counts. "Why not use Bitcoin?" repeated Draper. "It's smooth, free, transparent, and keeps reliable records of transactions."
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The small business and retail landscape is undoubtedly at a crossroads, but optimism persists. Opportunities arise with change, and in the case of SMBs and retailers adapting to new fintech solutions, the opportunities are endless.