Two of the largest buzzwords of 2018 have been cyrptocurrency and hashish. The two industries have seen an large inflow of investment decision from men and women hoping to capitalize on these new business enterprise suggestions. Just about every single 7 days, I see a new celebration pop up for men and women who are fascinated in locating the synergies among these distinctive industries. Absolutely everyone knows that banking is a huge challenge for the hashish industry (as we have talked about right here, right here, and right here), and quite a few see the clear connection for how cryptocurrency could enable solve that. On the other hand, that connection will not possible arise anytime soon (at least not in advance of the hashish banking difficulty is resolved).
The hashish industry is a hugely-controlled industry at the point out stage, and cannabis stays a strictly managed substance under federal law. In order to reduce theft, products diversion, and other legal activity, states have essential enterprises to use point out-operate keep track of-and-trace techniques. This procedure also tracks the amount of dollars enterprises are earning and the place that dollars is coming from.
Cryptocurrencies are peer-to-peer networks of decentralized currencies that are traded on a community ledger by applying blockchain engineering. A cryptocurrency platform could allow for hashish enterprises to transact with digital forex as a substitute of dollars, earning the business enterprise safer for all gamers, and bypassing the have to have for financial institutions in quite a few cases. It seems like a all-natural in good shape. So, why won’t it work for now?
Combining cryptocurrency and the hashish industry would join two extraordinary and fast switching industries. Despite the fact that the federal govt made the decision it would proscribe cannabis lengthy back, it has not made the decision how to control cryptocurrencies. The fundamental blockchain engineering is also largely unregulated, and is overseen only by other consumers on the blockchain (see our articles or blog posts on blockchain and hashish right here, here, and right here). The two cryptocurrency and blockchain have been used by men and women for dollars laundering and evading taxes.
A developing number of leisure cannabis states have implemented stringent licensing and control courses to show the legitimacy of their respective industries to federal govt. Bringing in a engineering and a payment protocol that has been used for dollars laundering and tax evasion could delegitimize the development that the hashish industry has designed. At the quite least, if hashish enterprises start off operating transactions on cryptocurrency platforms, their enterprises will see more govt oversight from other federal bodies, like the SEC and IRS.
It will be interesting to see if a true crypto/hashish relationship can emerge to enable solve the banking difficulty, but for now we have more faith in the fundamental engineering, blockchain. We will continue to observe the possible synergies among cryptocurrency and hashish and update on any developments.