As someone who's not entirely opposed to crypto, this was an interesting read. Mostly in terms of the following: I sort of assumed that one of the factors (among many, for sure) limiting widespread adoption of crypto was that the thing we (in the US) already have was probably pretty smooth?
And reading this, seems like it really ain't. Interesting that crypto hasn't made inroads here. I mostly get why, incumbents don't like change, but still.
To an extent many have, but requiring the identity verification needed to prevent fraud is also a significant hindrance to adoption. Also, crypto is inherently susceptible to irreversible theft from hacks, which affects both customers and exchanges.
That's not really true of crypto if you consider any chain but Bitcoin and Ethereum. You can send USDC on Arbitrum (an Ethereum L2) for <$0.10, or Polygon for <$0.01.
Also, as the article points out, international transfers are still painful. Paying $10 to transfer money internationally is probably still a very good deal for most people.
I don't know why this is downvoted; I understand that there's a lot to dislike about crypto, but "international transfers" is no longer even a question. A lot of people today literally use crypto for that.
> You can send USDC on Arbitrum (an Ethereum L2) for <$0.10, or Polygon for <$0.01.
The vast majority of Americans reading that would have no idea what any of that means, or even how to figure out what it means. There are too many choices and too much jargon in the cryptocurrency world, and it takes real work and effort to figure it out. And then you have to have confidence that you understand it well enough so you don't make a mistake and send your money someplace you didn't intend. That's a real concern for many people, especially those who aren't all that tech-savvy. All those people will likely just rely on something like Western Union, even though it's annoying and they could theoretically have less friction with cryptocurrencies, at least after they've learned everything and set it up properly.
> The vast majority of Americans reading that would have no idea what any of that means, or even how to figure out what it means.
You're absolute right and over time, that is changing.
When I got onto the internet in 1991, I got an email address and couldn't for the life of me understand what good it would be for. I didn't know anyone else with one!
USDC is hardly what people think when they say crypto. For once it's not trustless, you need to trust that the backing dollars are in some bank account.
You are correct, similar to any other money transfer service it needs to be redeemed somehow. USDC is probably more trustworthy than an individual bank if you own >$250k because of their active treasury management.
I use Bitcoin a lot and I typically pay 10 cents for LN payment, and 50 cents for onchain. There have been very short periods when fees have peaked and you had to pay 10 bucks if you wanted it instantly.
In addition to what sibling commenters have said, I think part of the issue is friction and need. Out of the hundreds of merchants I transact with, probably only a handful accept cryptocurrencies, and that is in addition to "conventional" payment methods. So why would I bother?
Beyond that, paying with a cryptocurrency requires extra technical effort that many people don't have or don't want to deal with. Using an exchange to switch between fiat and cryptocurrency is an extra step that adds friction (and many of these exchanges end up embroiled in scandal and/or get shut down, making it hard for people to trust the extant players). And the sheer number of choices of what coin to use also muddies the waters for many people. Bitcoin is obviously well known, but transactions are slow (or are on a lightning network, which requires understanding more concepts and jargon) and expensive.
Then there's volatility: Bitcoin lost nearly 3% of its value (against USD) today. I certainly wouldn't trust that to keep money in as a stable store, like a checking or savings account analogue. Sure, you can go for things like USDC (and you probably should!), but the concept of a stablecoin is another concept to learn, and then you have to figure out how to get them and transact with them. A quick web search for "pay with USDC" shows quite a few options, and your average person isn't going to know what to do there.
Also consider that this article was about bank transfers, and bank transfers alone. In the US, for example, we get around the annoyance of bank transfers with credit and debit cards, and payment apps like Zelle, Venmo, and Cash App. Ultimately there's very little actual need for cryptocurrencies.
Certainly one big area is international transfers, but most people (in the US, at least) either don't need to do them at all, or have other options. For payments to many non-US merchants, I can still use my US-issued credit card. International person-to-person payments are the main pain point, and I expect some people do use cryptocurrencies for this. Others stick with the older-school methods like Western Union.
When traveling internationally, I used to withdraw local currency (using my US-bank-issued debit card) at the destination airport, and then mostly pay with cash. These days I find that most places I travel will accept US credit cards in many places, so I essentially pay the same way I pay at home, while being sure to use a card that doesn't impose foreign transaction fees. Certainly there are countries where US credit cards aren't all that useful, but I think the point is that those places are likely a minority when it comes to where most Americans might travel, not to mention that most Americans rarely or never leave the US in the first place -- many don't even have passports!
And reading this, seems like it really ain't. Interesting that crypto hasn't made inroads here. I mostly get why, incumbents don't like change, but still.