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Liechtenstein Makes Bitcoin Legal Tender for Certain Services
Liechtenstein’s Prime Minister has revealed that the European nation will accept Bitcoin for the payment of certain state services, making it the latest in a growing list of states to have adopted the original cryptocurrency in some form or another. At a time when the cryptocurrency market continues to weather the fallout from high inflation, high interest rates and a stagnant global economy, this news comes as a significant coup for Bitcoin, especially when PM Daniel Risch — who is also Liechtenstein’s finance minister — also said in an interview that he’s open to investing the nation’s reserves in the cryptocurrency.
While it can easily be said that Liechtenstein is hardly the world’s biggest economy, its newfound willingness to deal with Bitcoin adds another brick to the wall of worldwide cryptocurrency adoption. In fact, at a time when the market isn’t doing spectacularly, it’s very encouraging to note several other recent instances of adoption, from Societe Generale and Visa to Burger King and Ralph Lauren. And what’s significant about these is that they all highlight how the industry is steadily building the foundations for a healthy bull market in the next year or so, one that may be even bigger than those that came before.
Lichtenstein Government Is Only the Latest in Line of Bitcoin and Cryptocurrency Adopters
The revelations of Liechtenstein’s incoming acceptance of Bitcoin came via an interview PM Daniel Risch sat for with German daily Handelsblatt. Risch doesn’t provide many details beyond the basics, with a timeline for the introduction of Bitcoin payments not yet available. Nonetheless, he underlines that the European state is prepared to even invest some of its reserves in the cryptocurrency, despite his acknowledgement that cryptocurrencies are “still too risky.”
This is significant insofar as it points towards a gradual easing of attitudes towards Bitcoin and crypto, with Risch adding that his government’s assessment of the current riskiness of cryptos “can of course change.” Such openness is of a piece with other recent examples of adoption, all of which reinforce the picture of a global economy that is incrementally warming up to cryptocurrencies.
Source: Twitter
For instance, last month saw Societe Generale announce the launch of the EUR CoinVertible, a stablecoin pegged to the euro and running on the Ethereum public blockchain. Aimed at institutional clients, the EUR CoinVertible offers a means of transferring funds and providing liquidity quickly and cheaply, while also enabling a high level of transparency and full regulatory compliance.
More importantly, it’s only the beginning of Societe Generale’s foray into cryptocurrency, with its digital asset subsidiary aiming to develop a roster of various blockchain-based products and services. Jean-Marc Stenger, the CEO at Societe Generale-FORGE, said, the launch is a “step” in SG’s plans “to deliver innovative solutions to its clients, either real-money institutions and corporates or entities of the crypto industry, and to facilitate the emergence of new market infrastructures based on blockchain technology.”
Encouragingly, Societe Generale isn’t the only major player in the world of finance that has been delving deeper into cryptocurrency recently, doing so during a market downturn no less. This includes payment/cards giant Visa, whose Cuy Sheffield (Global Head of Crypto) revealed during StarkWare Sessions 2023 that it had begun testing stablecoin payments, also on Ethereum.
He said, “We’ve been testing how to actually accept settlement payments from issuers in USDC starting on Ethereum and paying out in USDC on Ethereum. So, these are large value settlement payments.”
Visa’s dalliance with USDC stretches back to the partnership with Circle it announced in December 2020, while it also comes in addition to the various crypto-linked credit/debit cards it has launched over the past couple of years (the most recent being one with crypto-exchange Gate.io). It also comes in addition to recent moves from other financial institutions, including the following:
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April 2023: Switzerland’s PostFinance partnered with Zurich-based Sygnum to enable its customers to buy, store and sell bitcoin and ethereum.
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April 2023: Raiffeisen Bank partnered with Bitpanda to offer cryptocurrency investment services to its customers.
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March 2023: Fidelity Investments opened its cryptocurrency trading services to all of its customers.
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February 2023: Sberbank announced plans to launch its own DeFi platform running on Ethereum.
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February: UK digital bank Revolut launches its own staking service, coming in addition to its pre-existing crypto trading products.
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January 2023: N26 expanded its cryptocurrency trading services to five new markets, adding to its original entry in Austria.
This isn’t quite an exhaustive list of every bank, financial institution or financial services company that has delved (further) into crypto since the beginning of the year. Nonetheless, it provides a nice picture of how adoption is actually increasing, even during a difficult period for prices.
What This Means for Crypto
This picture could be expanded even further, because we’ve also had news of retailers and brands opening their doors to crypto in recent weeks. This includes Burger King, whose outlet in Paris began accepting cryptocurrency payments in late March, via Alchemy Pay and Binance Pay. It also includes fashion brand Ralph Lauren, which opened a store in Miami in early April that also accepts cryptocurrency payments, via BitPay.
As we have noted before, such pieces of news reinforce the impression that the overarching direction of travel is towards more cryptocurrency adoption, and certainly not less. Yes, the industry is having a difficult time in the United States right now, with the Securities and Exchange Commission seemingly on a warpath against Ripple and various exchanges. But as the introduction of the European Union’s comprehensive MiCA framework in April shows, much of the world is actually beginning to embrace crypto in a big way.
And what this all does is lay the foundation for more adoption to come, particularly when the global economy makes a sustained and substantial recovery. When this happens, and when investor sentiment improves, the existence of a framework for greater crypto adoption and use will result in more growth than ever before. This includes the growth of cryptocurrency prices, which could hit new heights when the next Bitcoin halving happens next year. So yes, even though prices are still well below where they were in November 2021, the overall picture is arguably better now than it was then.
