It has been a massive week for cryptocurrency. While Bitcoin has once again soared to all-time highs, a number of altcoins and lesser-known digital currencies, including Ethereum and ‘joke’ currency Dogecoin, have also rocketed to record values as crypto fever takes hold.
The fledgling cryptocurrency ecosystem is known for its sensitivity to market influences, and they do not come any bigger than the world’s wealthiest man, Elon Musk – who has stirred a frenzy in the past few weeks.
His Silicon Valley luxury electric vehicle manufacturer, Tesla, announced recently that it would be investing $1.5bn (USD) of its cash reserves into Bitcoin, with plans to accept the world’s leading cryptocurrency as payment for its products in the near future.
As expected, cryptocurrency enthusiasts did not wait long before voting with their wallets – and Bitcoin is trading at record levels as a result, and, once again, the media is discussing digital currency’s seemingly unstoppable march into mainstream consciousness. Automated trading platform Bitcoin Loophole also reported a surge in downloads of its powerful trading app (click for more information) as crypto fans from all over the world look for innovative ways to improve their trading skills.
It is little surprise, then, that more and more influential figures are hopping off the fence and confirming their interest in crypto. Just this week, rap star, producer, businessman and all-round A-Lister Shawn Carter, a.k.a Jay-Z, announced that he would be partnering with Twitter founder and CEO Jack Dorsey to launch a Bitcoin development fund.
Dorsey and Carter have contributed 500 BTC (nearly $24.5m, in USD) as seed capital for the project, entitled ₿trust, focusing on Africa and India, to start with.
The project, which was revealed on Twitter (of course!) by Dorsey himself, is invited applications for three board members, with the mission to “make Bitcoin the internet’s currency.”
JAY-Z/@S_C_ and I are giving 500 BTC to a new endowment named ₿trust to fund #Bitcoin development, initially focused on teams in Africa & India. It‘ll be set up as a blind irrevocable trust, taking zero direction from us. We need 3 board members to start: https://t.co/L4mRBryMJe
— jack (@jack) February 12, 2021
The board will take no direction from Dorsey or Carter, and Dorsey claims to have set it up as a ‘blind irrevocable trust’, which separates the actions of the project from those who have granted the funding. In short, ₿trust will not be required to satisfy any criteria, or respond to any pressure, Dorsey or Carter throw their way.
Dorsey has long been an advocate of cryptocurrency, particularly Bitcoin. In 2020, another of Dorsey’s companies, contactless payment intermediary Square, bought $50m-worth of Bitcoin, having made cryptocurrency transactions available through their app two years earlier.
Twitter, too, is beginning to make noises about crypto adoption, with its chief financial officer, Ned Segal, acknowledging in an interview this week that the company could soon consider paying its employees using digital currency.
Segal told CNBC: “We have done a lot of up-front thinking to consider how we might pay employees should they ask to be paid in Bitcoin, how we might pay a vendor if they ask to be paid in Bitcoin, and whether we need to have Bitcoin on our balance sheet should that happen.
“It’s something we continue to study and look at, we want to be thoughtful about over time, but we haven’t made any changes yet.”
Dorsey and Jay-Z’s announcement comes during an apparent tidal wave of crypto adoption, with Mastercard confirming this week that it will accept “selected cryptocurrencies” direct on its network later in 2021.
Raj Dhamodharan, executive vice president at Mastercard, said: “Our philosophy on cryptocurrencies is straightforward: It’s about choice. Mastercard isn’t here to recommend you start using cryptocurrencies, but we are here to enable customers, merchants and businesses to move digital value, traditional or crypto, however they want.”
While modern technologies and digital-native influencers appear to be leading the charge on mainstream adoption of the blockchain, traditional financial services and Wall Street investors appear to remain reluctant to shift.
However, there are signs that the allure of crypto, or perhaps the fear of missing out, is dragging old-school financial institutions towards adoption.
BNY Mellon, which claims to be the United States’ oldest bank, announced that it has formed a ‘digital assets’ unit, which will help customers manage investments and digital currencies. Mellon is on record that its digital assets department will be up and running by the end of 2021.