Whether that’s cryptocurrency remains to be seen, he told PYMNTS.
While there is “enormous excitement about crypto, there is also enormous uncertainty that most consumers are not aware of,” Kenderov said — most notably, the regulatory pressures, questions and the price volatility of the new asset class.
“The excitement stems from the fact that, for a while, crypto was one of the fastest appreciating asset classes ever,” Kenderov said.
Indeed, PYMNTS’ April study, “U.S. Crypto Consumers: Cryptocurrency Use in Online and in-Store Purchases,” showed that nearly 60 million Americans have held digital assets in the past 12 months — up 18 million from 2021 — and more than a quarter would prefer to do business with merchants that accept it.
“What is driving volatility for crypto?” Kenderov said. “How is the asset class correlated with other asset classes? All of that is in the background for most consumers.”
Comparing the current state and understanding of crypto to a “get-rich-quick scheme” in which “a lot of people made a ton of money, but also a lot of people lost a lot of money,” Kenderov said that while the excitement may be understandable, it is “unfounded.”
Working through issues like the vague nature of who’s behind many projects, concerns about the environmental impact of cryptocurrencies like bitcoin, and the difficulty of assessing the strengths and weaknesses of the often-complex protocols behind those cryptocurrencies will take years to work through, he predicted — as will governments’ assessment of what they will tolerate and how they will regulate crypto.
“Crypto was built to be anonymous, to decentralize control, to add a layer of privacy,” Kenderov said. “All of that is very interesting, but as a society, I don’t think we’re ready to concede that there won’t be any anti-money laundering or terrorist funding restrictions. We have to find solutions for those.”
“We’re in the very, very early days of digital currencies, and the current craze about crypto protocols and crypto coins will probably subside,” he said, as long-term, more durable cryptocurrencies start to emerge from the 10,000-strong mass of projects.
“There are enormous risks right now — regulatory risks, technology risks, security risks — which [require] a whole different level of risk tolerance,” he added.
For small- to medium-sized businesses (SMBs) considering accepting crypto, he suggested starting slow — accepting it for “5% of your total volume, not 50%.”
In the meantime, Kenderov said, “Payments automation is starting to permeate different domains … We see payments embedded in all sorts of applications. Tools that previously didn’t deal with payments are now offering means and ways to pay.”
Companies that want to improve payments automation and back-office accountability don’t need to wait for crypto, he added.
“There are tools and providers like Plastiq that right now can add enormous efficiency,” he said.
There are also other solutions without crypto’s flaws that can solve some of the payments problems like speed, cost and scalability, such as real-time payments options like the Federal Reserve’s FedNow or government-issued central bank digital currencies (CBDCs) that would provide the transparency and auditability of cryptocurrencies.
“Traditional money movement that settles digitally will probably compete for speed with cryptocurrencies, and it is a viable contender for accelerating payments around the world,” he said. “I think society is ready to adopt a more efficient form of payment tools and payment rails, but at the end of the day, a currency’s purpose is to make transactions possible, make commerce possible.
“I definitely see crypto as part of this evolution path, but I don’t think the current protocols are it. They will evolve.”