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Joseph Lupo agrees. Lupo is the managing director of CoinBits, which helps businesses and investors create, manage and protect their money securely in a private bitcoin portfolio. “We’ve seen a demand for higher net worth individuals and businesses looking to invest in this new asset class,” says Lupo. “Because bitcoin is decentralized, they need a ramp they can trust and someone they can trust, which is why we launched Coinbits Reserve to help businesses and higher net worth individuals invest in bitcoin. We manage their investments, but we are also focusing on education and what this new form of digital, limited money can do for them.”
Crypto considerations
As companies consider potential business models and use cases for cryptocurrency, there are factors to consider before entering the market. The cryptocurrency is still marked by volatility and wild price swings. Security and compliance concerns may slow adoption in more heavily regulated industries such as finance. “Banks are going back and forth on how they can get into crypto harmoniously,” says Xi of Prime Trust. “What holds them back is that regulations in this space require both crypto domain knowledge and compliance expertise to understand. Worse still, there are no clear regulations on what is compatible.”
There is also an urgent need for IT infrastructure development to integrate cryptocurrencies. For example, The Pavilions Hotel relies on an old booking engine for guests to book a hotel room online. However, Toon says the system cannot accept cryptocurrency payments. The company looked for an alternative, but in the end, Toon says, the hotel chain “couldn’t find a suitable vendor willing to let us put the cryptocurrency through the booking engine.”
As a result, guests of The Pavilions paying cryptocurrency must book directly through the company’s booking center, rather than booking online. After a call, a representative sends an email with a link that guests click or scan to complete a cryptocurrency payment. It’s an extra step, which Toon says can “slow down the process.” People want to book now – they don’t want to talk to or email anyone. They just want to make the reservation themselves.”
Xi says that as cryptocurrencies gain general acceptance, businesses will increasingly seek IT agnostic infrastructure that allows for easy integration with a wide array of features and solutions. Otherwise, he notes, “dealing with multi-vendor integration can become overwhelming and costly.”
Another challenge faced by organizations entering the cryptocurrency market is the shortage of skilled talent, which is a key component in developing innovative products and services. “We all know that engineering and product talent in crypto is extremely difficult to acquire these days,” Xi says. He says this could lead to one of two negative outcomes: either “huge costs for in-house teams” or, alternatively, if a company chooses to scrape with a humble team, “a really long time.” go to market to gain competitive advantage and it’s a missed opportunity”.
This content is produced by Insights, the exclusive content arm of MIT Technology Review. It was not written by the editorial staff of MIT Technology Review.
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