A lot has been going right for the Afterpay Ltd (ASX: APT) share price of late. But the Afterpay share price is always looking into the future, here’s why.
APT share price
Afterpay focused on the future
Every time I read or hear about Afterpay, I’m always impressed by how it continues to consolidate its first-mover advantage over the likes of Zip Co Ltd (ASX: Z1P) and Sezzle Inc (ASX: SZL).
This is on display yet again with Afterpay’s push for payments to shift to blockchain technology. What’s prompted this though?
Afterpay is striving to address a growing customer interest in using alternative currencies on its Afterpay Money app.
Afterpay’s executive vice president, Lee Hatton noted the importance of planning ahead of the new generational shift rather than waiting for it to happen.
New frontier
Square’s founder, Jack Dorsey is looking to create stablecoins, which is a form of digital currency pegged to another asset like the Aussie dollar.
If government and industry manage to establish a framework, stablecoins could be used to exchange value without the need to use existing payment rails operated by global card schemes.
This would ultimately eradicate surcharges suffered by consumers and interchange fees imposed on merchants.
Seems like a win-win situation for everyone but there are risks involved.
In the Australian Financial Review, the Australian Competition and Consumer Commission (ACCC) flagged the inherent risks due to the rise in cryptocurrency scams it witnessed over the first half of this year.
However, the ACCC spokesperson did acknowledge the potential efficiencies it would achieve.
What does the RBA think?
It seems the Reserve Bank of Australia (RBA) is liking the idea of creating a wholesale market digital version of the Aussie dollar to enable the movement of assets on the blockchain.
However, the RBA emphasised the importance of making sure that stablecoins are safe and secure.
My thoughts
It seems the industry and regulators like the idea but only once they’re assured it’s safe and secure.
Afterpay has put a compelling case for a movement of payments to blockchain technology but issues still remain. Given Dorsey’s strong track record of disruption and Afterpay’s leadership position, I think there’s a good chance of nipping these issues under the bud and turn the tide.
In saying this, I think it will take a long time for blockchain technology and stablecoins to become mainstream.
I believe any business or disruptor that is trying to provide more value to customers and businesses should be monitored really closely.
So, watch this space on Rask Media to keep up to date with the latest news.
