Cryptocurrencies are currency from digital files, existing as money free of control from a government or person, and they are nothing new to our world. As technology advances, so does our money system. However, we’re getting closer to buying cannabis with cryptocurrency.
Farmers and businessmen and women all struggle to get financial backing and banking accounts. They are limited in options for credit cards, loans, and services to process sales without astronomical fees. There are currently only 212 industry-friendly banks across all sectors of cannabis production, and only 86 of those are THC licensee friendly. The industry sits at a standstill as we wait for the SAFE Banking Act to move through congress. The act would allow banks to serve cannabis companies where cannabis is legal.
This left a gaping opportunity within the industry where cryptocurrency jumped in to offer its services. Because of the lack of federal banking regulations, cryptocurrencies can offer a variety of opportunities to the cannabis industry.
Besides the ability to run transactions, cryptocurrency offers other services to its users.
– Blockchain transparency: This provides transparency within the digital record of transactions.
– International and online sales: Allows transactions within the sale without transaction fees.
– Minimizes chargeback fraud: This ensures they protect the business from wrongfully disputed claims and returns.
While cryptocurrency has its pros by helping the industry, it doesn’t come without its drawbacks.
– Fluctuation in currency value: Currency values fluctuate over time, and cryptocurrencies are no exception. However, cryptocurrencies can be more volatile.
– Regulations and questions: Being entirely digital, they lack normal banking regulations. This can cause issues and questions when attempting to cash out on your earnings because of its non-traditional nature.
– Limited client use base: Cryptocurrencies are not as popular as our debit and credit cards, so it is still a niche form of payment. This means it may not appeal to all customers and partnering businesses.
Cryptocurrency is providing an alternative form of banking and transactions to those within the cannabis industry as they wait in anticipation of the results coming from the SAFE Banking Act. It gives businesses the chance to offer another form of payment without as many hoops as the standards banks are currently putting out. Whether cryptocurrencies become industry standard is still up in the air, but it provides a unique opportunity to get by.