Cryptocurrency fuels new business opportunities

Jose Lupo agrees. Lupo is the General Manager of CoinBits, which helps businesses and investors safely build, manage, and protect their money in a private bitcoin wallet. “We saw demand from higher net worth individuals and companies who want to invest in this new asset class,” says Lupo. “They need a gateway and someone they can trust, as bitcoin doesn’t have a team or a headquarters, so we started Coinbits Reserve to help businesses and high net worth individuals invest in bitcoin. We manage their investments, but we also focus on education and what this new form of digital and finite money can do for them.”

Cryptographic considerations

While businesses ponder possible business models and use cases for cryptocurrencies, there are factors that need to be considered before entering the market. The cryptocurrency is still marked by volatility and wild price fluctuations. And concerns about regulatory compliance and security can slow adoption in more regulated industries, such as finance. “Banks are going back and forth on how they can get into crypto compliance,” says Xi of Prime Trust. “What holds them back is that the regulations in this space require both crypto domain knowledge and compliance experience to understand. What is worse is that there have been no clear regulations about what is being complied with.”

There is also a pressing need for IT infrastructure to evolve to integrate cryptocurrencies. For example, The Pavilions Hotel relies on a legacy booking engine for guests to book a hotel room online. However, Toon says that the system was unable to accept cryptocurrency payments. The company looked for an alternative, but in the end, says Toon, the hotel chain was unable to “find a suitable provider that would be willing to allow us to put crypto through the booking engine.”

As a result, instead of booking online, The Pavilions’ crypto-paying guests must make a direct reservation through the company’s reservation center. After a call, an agent sends an email containing a link that guests click or scan to complete a cryptocurrency payment. It’s an extra step that Toon says can “slow down the process. People want to book now, they don’t want to talk to anyone or email anyone. They just want to make the reservation themselves.”

As cryptocurrencies gain mainstream acceptance, Xi says that companies will increasingly look to a separate IT infrastructure that enables easy integration with a wide range of features and solutions. Otherwise, he notes, “it can become overwhelming and prohibitive to deal with multi-vendor integrations.”

Another challenge facing organizations entering the cryptocurrency market is a shortage of qualified talent, a key component in developing innovative products and services. “We all know that engineering and product talent in crypto is extremely hard to find these days,” Xi says. Which, he says, can lead to one of two unfavorable outcomes: “huge start-up costs for internal staff teams” or, alternatively, if a company chooses to survive with a modest-sized team, “a really long time to market.” and a missed opportunity” to gain a competitive advantage.

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This content was produced by Insights, the personalized content arm of MIT Technology Review. It was not written by the MIT Technology Review editorial team.

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