Credit: Getty Images

Wanna Buy Some Bitcoin?

Kim Bellard
Mar 2 · 5 min read

To healthcare organizations, digital currency is the thing you’re forced to deal with when your systems are . To the rest of the world, it’s increasingly starting to look like the future.

Tesla caused somewhat of a stir last month when it that it had bought $1.5b of bitcoin. It also said it would start accepting bitcoin payments for its cars. CEO Elon Musk added to the furor, : “I do at this point think bitcoin is a good thing. I’m late to the party, but I am a supporter of bitcoin.”

Most of us are late to the digital currency party.

Credit: FamZoo Staff

Bitcoin’s market cap in mid-February, although it just over $900b, with Ethereum another almost $200b. Tesla is from its bitcoin investment than from its core businesses. In the scheme of global financial markets, digital currencies are still small, but are not something any CFO should be ignoring.

Tesla accepting digital currencies; Overstock, Starbucks and Twitch do, as three wildly different examples. Twitter about paying vendors or even employees with bitcoin. Facebook to launch its own cryptocurrency this year.

I’m not aware, though, of any major healthcare companies accepting or paying with digital currencies. No Tesla-type breakthroughs in healthcare.

Banks recognize the threat that digital currencies could pose to them. Just today, Citi bitcoin could “become the currency of choice for international trade.” Its research note went on:

Bitcoin’s future is thus still uncertain, but developments in the near term are likely to prove decisive as the currency balances at the tipping point of mainstream acceptance or a speculative implosion.

Bank of New York MellonCorp last month that it would hold, transfer and issue bitcoin and other cryptocurrencies for its asset management customers. “Digital assets are becoming part of the mainstream,” said Roman Regelman, chief executive of BNY Mellon’s asset-servicing and digital businesses. JP Morgan isn’t there yet, but last week it would allow investors to hold up to 1% of their portfolio in cryptocurrencies.

PayPal : “Beginning in early 2021, PayPal customers will be able to use their cryptocurrency holdings as a funding source to pay at PayPal’s 26 million merchants around the globe.” Dan Schulman, president and CEO, :

The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly.

and are also already bowing to that inevitable.

One of the aspects of bitcoin and other cryptocurrencies that holds much appeal is that they bypass central banks, unlike so-called “fiat currencies” issues by nations’ central banks. Those central banks are recognizing that they risk being left out of the future, and are determined to have their say.

Credit: Ledger Insights

A found that more than 86 central banks were exploring a central bank digital currency, with more than 60 countries already testing the concept. Countries like the Bahamas () and Sweden () are already far along in their testing; the Swedish central bank () wants making e-krona payments to be “as easy as sending a text.”

Even the U.S. is finally coming around to the idea, with Treasury Secretary Janet Yellen that digital currency was “absolutely worth looking at” because it “could result in faster, safer and cheaper payments,” although she some concerns. Fed Chairman Jerome Powell that such a currency is a “high priority project for us…This is something we’re investing time and labor in, across the Federal Reserve system”

But, as Frederick Kempe, President & CEO of the Atlantic Council, : “Yet while the Fed consults, China executes.”

China is, indeed, not late to this party. It is aggressively working on a national digital currency. The New York Times : “no major power is as far along as China. Its early moves could signal where the rest of the world goes with digital currencies.”

Mr. Kempe :

Chinese officials have made no secret that their greatly accelerated efforts at introducing and distributing the digital yuan are an opening move in their long-term strategy to undermine the dollar’s global supremacy and expand their influence.

If the U.S. loses the high ground of financial technological innovation, combined with a weakening of the dollar’s global dominance, the benefits for Beijing would be considerable.

An article in the magazine of China’s central bank : “The right to issue and control digital currencies will become a ‘new battlefield’ of competition between sovereign states.”

I’ve written before about how China is threatening America’s lead in , , and , but I hadn’t thought much about losing “the high ground of financial technological innovation” to China as well. It’s a battlefield we’re not prepared for.

In the best case, digital currencies could make payments “as easy as sending a text,” as Riksbank hopes. They should make processing those payments faster, more secure, and less impacted by national boundaries. They’d open up electronic payments to the unbanked; anyone with a smartphone could use them.

KHYLIN WOODROW/BLOOMBERG BUSINESSWEEK

In the worst case, though, they could further erode privacy; all those anonymous cash or bitcoin payments could be tracked, such as through a central bank. Yaya Fanusie, a fellow at the , : “This is about more than just money. It’s about developing new tools to collect data and leverage that data so that the Chinese economy is more intelligent and based on real-time information.” China won’t be the only country with such interests.

The Digital Currency Initiative at MIT Media Lab its mission is “to create a future in which moving value across the Internet is as intuitive and efficient as moving information.” That just makes me smile; when it comes to healthcare, moving information is still neither intuitive nor efficient.

Healthcare has lots on its plate right now, with a host of legacy issues that have only been exacerbated by the pandemic. I get that. Incorporating digital currencies is not on the front burner. But ignoring them won’t make them go away; it will only make the “inevitable” transition harder.

Please follow me on Medium and on Twitter (@kimbbellard), and don’t forget to share if you liked the article!

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Kim Bellard

Written by

Curious about many things, some of which I write about — usually health care, innovation, technology, or public policy. Never stop asking “why” or “why not”!

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