Growing up, a Friday night trip to the local Blockbuster Video was as routine as Sunday church.
I remember perusing through the New Releases section first and becoming upset that all the copies of Point Break had been rented. And then also finding out that I still owed $4.35 from the last rental turned in late.
Back then, nobody imagined that every Blockbuster store would be extinct in a little over a decade — put out to pasture by the arrival of Netflix, Hulu and other streaming services.
(Not entirely extinct … there’s still one Blockbuster store left in Bend, Oregon, that’s become quite an attraction for tourists from around the world.)
The lesson here is that new technologies lead to the creative destruction of traditional industries in ways that most investors never see coming.
Did you ever think that U.S. ownership of landline telephones would only be 6.5%?
Could you have imagined that every J.C. Penney in America would someday be vacant?
Or how about the death of the newspaper, as most Americans now get their news from social media?
That’s why I’ve recently been pounding the table on cryptocurrencies such as bitcoin and Ethereum. Their disruptive wave is approaching like a powerful tsunami.
And if you didn’t want to listen to me, the largest credit card company in the world just gave you 60 million reasons to take interest…
IF YOU CAN’T BEAT ’EM, JOIN ’EM
There’s a saying in life: “If you can’t beat ’em, join ’em.”
That seems to be credit card giant Visa’s new approach, as it sees blockchain as a cheaper, more efficient way of processing transactions.
A week ago, Visa announced plans to connect its global payments network to the U.S. Dollar Coin (USDC), a stablecoin built on the Ethereum blockchain.
This move would immediately provide 60 million merchants and their billions of consumers access to a cryptocurrency that represents the U.S. dollar.
Circle Internet Financial built USDC on the Ethereum blockchain as a centralized dollar-linked cryptocurrency. For every $1 reserved in a bank, there is one USDC in circulation.
However, USDC has all of the “smart” properties associated with bitcoin.
Its ownership is tracked on a decentralized ledger, and it can be sent peer-to-peer without a middleman, faster and cheaper than current payment systems.
TAKING ON THE $120 TRILLION PAYMENT MARKET
With a market cap just over $3 billion, USDC is now the world’s 13th-largest cryptocurrency by market cap.
A key to the growth of USDC is Coinbase, the giant U.S. crypto trading platform.
Coinbase has made it easy for its 35 million accounts to convert their U.S. dollars into the USDC stablecoin.
Once a user owns USDC, they can use it on most other cryptocurrency exchanges, as well as send it as easily as sending an email.
Sometime next year, Visa will issue a credit card that lets businesses send and receive USDC payments directly from other businesses that use the card.
Visa Head of Crypto Cuy Sheffield told Forbes: “This will be the first corporate card that will allow businesses to be able to spend a balance of USDC. And so we think that this will significantly increase the utility that USDC can have for Circle’s business clients.”
Visa’s target market is the $120 trillion payment market, which is still plagued by costly wire and check payments that can sometimes take days to settle.
Since USDC settles on the Ethereum blockchain, the transaction can settle in under a minute, with fees sometimes less than $1.
GET READY FOR CRYPTO’S NEXT WAVE
If you doubted crypto’s future adoption, here’s the world’s largest credit card processor hyping up blockchain’s utility.
No one could have imagined this partnership just a few years ago. And USDC might not even need Visa in a few years, as its properties can be preprogrammed.
That’s why technology investments have delivered the biggest gains over the past few decades. Not too many people saw them coming.
And crypto’s next wave is getting started right now, as I write this article.