Why cannabis-specific cryptos won’t go mainstream, but crypto in cannabis maybe

By Jose Rodrigo Safdiye

Since the altcoins erupted, the crypto space has seen a myriad of miracles and unexpected events. Smart Contracts, Lighting Network, DeFi, Fraud, Bubbles and Failed Projects, to name some of the most obvious. In the midst of this frenzy, a fascinating concept emerged: Cannabis Crypto.

Some view these tokens as a possible solution to the cannabis industry’s banking problem that arises from the DEA’s outdated Schedule I status of marijuana as a controlled substance, making it impossible for the entire industry to access banking institutions, which is essentially what cannabis companies do forces to operate outside of insured banking systems.

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Hence, many wonder if cryptocurrency could be the solution the industry is looking for. Could this be the way to bypass regular banking systems without federal law?

Currently, the relationship between cryptocurrencies and cannabis is still in its infancy, but is likely to unfold and thrive in the near future as cryptocurrency adoption increases and technology matures.

Most established right now in researching cannabis-specific crypto is the POT (CRYPTO: POT) coin, a low-radar alt-coin that experienced a huge pump and dump after Dennis Rodman wore a POT t-shirt on his now notorious public wore where meeting with North Korean ruler Kim Jong-un. While the T-shirt, like the meeting itself, caused a sensation internationally, this type of appearance is never healthy for a financial instrument intended as a long-term medium of exchange. It now ranks # 1135 on CoinMarketCap.

The main problems cannabis tokens face are adoption, market capitalization, and targeting. Instead of matching new technologies with innovative proposals, these cryptos cannot tackle the industry’s problem.

RELATED: Are Cryptocurrencies the Future of the Cannabis Industry?

They also fall short because cannabis cryptocurrencies lack innovation in their technology and are limited to a single industry, limiting their potential market reach. A currency must be widespread and want to be accepted by listed companies.

In addition, cannabis cryptocurrencies cannot answer a simple question

Why should companies use them?

The fact that they are publicly associated with cannabis is not enough. The problem is that Alt-Coins cannot differ from other coins. Most companies would prefer to use ETH, BTC, BNB, USDT, or any of the other top 25 cryptos.

It would be unwise for a cannabis company to rely on one of the existing “cannabis cryptos”. “

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We asked Tyler Beuerlein Hypurs Chief Revenue Officer on why his company didn’t use cryptocurrency in its daily financial transactions to bypass the banking system.

RELATED: Why Cryptocurrency Is Gaining Adoption in the Cannabis Industry

“Combining one highly regulated product with another highly regulated industry is a non-starter for banks and regulators. A company’s reliance on crypto could have a negative impact on its financial operations in the face of numerous potential ramifications. You could suffer from unpredictable fluctuations in value, increased tax burdens and even the loss of a company’s bank accounts or banking partnerships, ”Beuerlein told Benzinga.

“It is probably much riskier for a company to use crypto to bypass traditional banking. Cryptocurrencies actually need banking as the funds associated with digital assets will eventually have to be converted into traditional currencies. Furthermore, contrary to popular belief, the vast majority of legal cannabis companies are already in their bank accounts anyway. “

What about the future?

One possible way for the industry to adopt a particular blockchain-based token could be to enter into strategic partnerships with well-positioned companies. This would make the token more stable and make it easier for smaller companies to adopt it as well. If not, companies would tend to choose non-cannabis-specific tokens or other financial instruments.

RELATED: Cannabis and NFTs: Collectible Art or Regulated Advertising?

Blockchain technology also offers cannabis manufacturers the ability to closely track their production process from seed to sale, thus guaranteeing customers quality control and vigilant product monitoring.

“If the central banks don’t start tokenize their currencies, I believe that so-called stablecoins, because of their practicality, immediacy and cost savings, have a chance to slowly join international trading operations,” Franco Amati, co-founder of the NGO Bitcoin Argentina and Signatura, said Benzinga in an exclusive interview.

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“For the rest of what we call ‘crypto’, while technology will continue to advance, it won’t cease to be a niche tool anytime soon.”

Unless someone finds a way to revolutionize the market, cannabis-specific cryptos remain impractical for the industry. Nonetheless, it would be wise to offer crypto payment methods to customers who choose this financial trend.

Unlike cannabis, which has been consumed since the dawn of civilization, crypto is new to humanity. As it evolves and evolves, it will no doubt deepen its connection with the cannabis industry. For now, traditional financial services remain the best option to meet the needs of the industry. Hence, cash is still king when it comes to selling cannabis.

This article originally appeared on Benzinga and was republished with permission.