Flurry of Developments Signals Crypto Adoption
If progressive decentralization comes in waves, this week there was a tsunami. And it struck in widely different areas.
On the asset management front, Fidelity, the largest U.S. provider of 401(k) retirement plans, said on Tuesday that it planned to let accountholders invest in Bitcoin. With $2.2T in 401(k) assets, Fidelity has long been a leader in its industry so this move could have far-reaching ramifications. Abigail Johnson, Fidelity’s CEO, has been a vocal crypto supporter for years.
Paid With Crypto
The only catch is employers need to approve the Bitcoin program (unsurprisingly, Michael Saylor’s team at MicroStrategy already signed up).
On the political front, Horacio Rodriguez Larreta, the mayor of Buenos Aires, said on April 26 that Argentina’s capital city plans to let taxpayers settle bills in cryptocurrency. Rather than being paid directly in crypto, the government will be paid in Argentine pesos following conversions carried out by crypto firms. The decision comes only a few weeks after Rio de Janeiro said it would allow some real estate taxes to be paid with crypto starting in 2023.
And on Apr. 27, the Central African Republic followed in the footsteps of El Salvador and adopted Bitcoin as a legal tender. Considered to be “one of the poorest and most fragile countries in the world,” only 11% of the nation’s 5.4 million people have access to the internet.
While Messari analyst @Saypien_ says Central African Republic’s adopting of Bitcoin is a “small scale” move in the grand scheme of things, it shows that El Salvador’s previous adoption of Bitcoin as a legal tender has put Bitcoin “in the conversation at the national level.”
The flurry of positive Bitcoin adoption developments suggests that for all the skepticism and market woes, blockchain technology is continuing to go mainstream. Just last month, the crypto industry breathed a sigh of relief when the Biden Administration’s long-anticipated oversight plan struck a note of compromise and openness to blockchain-related innovation.
Still, there remains considerable pushback in other quarters. The same day Fidelity made history on Wall Street, the State Assembly in New York approved a bill to establish a two-year moratorium on cryptocurrency mining operations that use fossil fuel-generated electricity. The bill must go to the legislature’s upper chamber and the governor before becoming law but it’s a sign that some lawmakers are losing patience with the costs of power consumption for Proof of Work consensus.
Assemblywoman Anna Kelles, the bill’s sponsor, said the measure will not “impact in any way anyone’s ability to do cryptocurrency mining as long as they’re not buying a power plant to do it.”
“We can be the crypto capital of the world without using or promoting the cryptocurrencies based on the environmentally destructive proof-of-work (POW) validation method that is used by crypto’s like Bitcoin,” Kelles wrote in a Dec. 2021 tweet to New York City Mayor Eric Adams.
As it happens, Adams is a crypto fan himself. In January, he converted his first paycheck to Bitcoin and Ethereum as a show of support for cryptocurrency ventures in the city. That’s another move that may propel the mainstreaming of crypto.