Wealth: Why you may soon spend crypto, even if you didn’t want to 

Predicting the future is a dangerous business. Back in 1899, Charles Duell, then head of the US Patent Office, confidently declared that “everything that can be invented has already been invented”.

History, of course, had other ideas.

I don’t want to fall into the trap Charlie did. But I feel on reasonably solid ground suggesting that within a few short years, almost all Australians will use cryptocurrency technology, whether they planned to or not.

The catalyst arrived, somewhat under the radar, last week in Washington.

The US Senate passed the Genius Act, a bipartisan bill setting out rules for dollar-backed stablecoins.

Stablecoins, in a nutshell, are digital versions of currency, typically pegged one-to-one to the US dollar and backed with cash, or cash-like assets. Stablecoins are one layer of cryptocurrency.

To the casual observer, this might all sound faintly dull. But if you are a finance nerd, it’s giddy stuff.

Traditional payments can take days to settle, delaying the time it takes for merchants to get paid.

Stablecoins via the Blockchain offer ‘peer to peer’ settlement, reducing the number of parties in the current payments ecosystem, thereby reducing transaction costs and offering near instant settlement.

In other words, stablecoins could allow businesses to sidestep traditional payment rails, which cost them, and their customers, billions of dollars in fees each year.

In the US, merchant groups have lobbied hard for the Genius Act and a gaggle of big corporate names like Amazon, Expedia, Walmart, Stripe and Shopify are either interested, or already invested in the technology.

Unsurprisingly, big banks in the US are reportedly circling the wagons and exploring whether to team up and launch a joint stablecoin in the face of this threat.

Australians meanwhile, have grown numb to the frictions built into our payments system.

Every time you tap your card, settle a bill, or send funds abroad, a parade of intermediaries takes a cut.

Card networks, acquiring banks, clearing houses — each happily take a little bit of your hard-earned money.

For international transfers, it’s worse.

The average cost of an international bank transfer in this country is 5.48 per cent.

If you’re unlucky, close to a dozen intermediaries can be involved.

Even after accounting for increased compliance costs in the future, stablecoin technology would almost certainly slash this cost and return money to the pockets of ordinary Australians.

Of course, not everyone sees crypto as a solution.

Before his death in 2023, Charlie Munger, business partner to Warren Buffett, described crypto technology as ‘contrary to the interests of civilisation’. Warren was less polite. But then again, Jamie Dimon, CEO of US bank JP Morgan, described bitcoin as ‘a fraud’ back in 2017.

Given this history, it’s not surprising that some banks still have doubts around the security of stablecoins and the regulatory implications of getting involved.

But even the loudest critics are adjusting.

Wind forward to 2025 and it seems both Jamie Dimon and JP Morgan are huge advocates and participants in the world of stablecoins, as well as other parts of the crypto system.

Meanwhile, Warren Buffett’s Berkshire Hathaway recently earned a crisp $250 m from its investment in Nubank, a large Brazil-based crypto-friendly bank and JP Morgan clients can now buy bitcoin. ‘Go at it’ in the words of Dimon a few weeks ago.

At the same time, JP Morgan is also piloting a deposit token for its big institutional clients. It is based on crypto-tech.

The same technology could also, by the way, make investing far more efficient for everyday investors.

Right now, if you buy an advised ETF, you’re paying an adviser, a broker routes your order, an exchange matches it, and a market maker — often a bank — fills it.

Meanwhile, the ETF issuer manages the fund behind the scenes. Every layer adds cost.

Frankly, you wouldn’t build a system like it today. Hence why so many American banks are busy building crypto products. None of these firms wants to become obsolete.

Closer to home, some momentum is building. The Reserve Bank of Australia is expected to report soon on Project Acacia, a pilot exploring the potential for digital money to support our wholesale markets in the country.

It won’t set pulses racing in most Aussie homes and more needs to be done, but it will be important for our financial services, which have languished in a kind of productivity doldrums for more than decade.

Soon enough, I predict you’ll find yourself paying for your morning coffee with stablecoin technology humming away in the background.

Native crypto platforms like Swyftx, and others, will build more everyday financial services into their offerings — providing much of the competition that we all hoped neo-banks would.

And like so many tech revolutions before it, you will barely notice when it happens.

Until, that is, you find yourself in a more productive, prosperous country— with less of your cash frittered away on outdated and cumbersome financial plumbing.

Jason Titman is CEO of Swyftx