As blockchain technologies have evolved to enable ever-faster digital payments, the need for speed continues to drive both technological innovation and mainstream adoption of new digital assets. The sector is building a lot of momentum for obvious reasons—businesses have always wanted the ability to move money around faster, and individual consumers have become annoyed with waiting around for refunds. For many consumers and businesses experimenting with new digital assets, fast access to money has never felt more within reach.
This interest is not expected to cool, as younger generations become digital currency natives who only know of a world with digital wallets. But even for them, that future could remain out of reach because innovation in digital payments is slow. And that’s not because we don’t have the technology. According to many leading experts discussing fintech innovation at the Las Vegas conference Money 20/20 last month, the problem is that regulators have yet to set clear standards on what is and isn’t allowed.
In the United States, the lack of regulatory clarity threatens to slow down not just mainstream adoption of new technologies but also innovation in digital payment options, potentially cutting off consumers and businesses nationwide from sought-after conveniences, simply because regulators can’t keep up with how digital assets are being used today.
“There has to be some clarity that comes out, some standards, some ideas of the dos and the don’ts and some structure around it,” said May Zabaneh, PayPal’s vice president of product in blockchain, crypto, and digital currencies during a Money 20/20 session focused on how people use crypto to make digital payments. “Otherwise, that mainstream adoption will really be inhibited.”
According to Zabaneh, digital payment processors need government agencies to ensure much more stability before the companies can confidently “explore the potential” of using digital assets like stablecoins or central bank digital currencies to provide alternative payment options in e-commerce. She said that even though PayPal has a responsibility to continue innovating in digital payments, efforts can become stalled because “there needs to be more clarity around regulation,” particularly regulations around consumer protection and the tax implications of using digital assets. These are areas US agencies have only just begun considering, and that’s holding innovation back. “In order for things to become mainstream, they have to be easily accessible, easily adoptable,” she said.
