I receive the question all the time: can Bitcoin bring something to the table when it comes to cannabis transactions? While many technologists claim this is a very real possibility, the current answer to this is a very strong ‘no.’ This might change in coming months and years, but, for now, that’s the verdict in my opinion, and here’s why.
Bitcoin would be the cannabis industry’s only crypto-currency solution at present. None of the other systems are tested enough to convince a business owner of any enterprise level organization to try a radical new experimental currency, private ledger or public blockchain. For them, the crypto-currency industry is in part defined by the Silk Road online darknet drug marketplace saga. Or, it’s just simply not the same value-proposition that is access to the Swift system. The Coinbase Shift Payments card, for instance, ensures its users it cannot let you use their card for underbanked services like medical marijuana due to federal law.
Rightfully so, the cannabis industry foresees a future in which it is integrated and fully accepted, by mainstream banks. Already navigating a tangled web of state, federal and international law, the cannabis industry does not have the time to add the headaches the Bitcoin industry brings with it.
In fact, already, executives in both spaces avoid each other. While presumably companies in either space could benefit from combining the two industries, and some do already, cannabis and Bitcoin already have enough on their individual plates to take further extreme risks.
If Bitcoin could benefit the cannabis industry, then there would likely be a longer list of companies which have experimented therewith. In fact, it’s very likely a private blockchain – as imagined by some of the largest technology and financial institutions on the planet – might better serve the cannabis industry in the near future than Bitcoin. The ethereum-like distributed ledgers IBM, JP Morgan and others players are currently experimenting with could be integrated at traditional finance firms to make more efficient anti-money laundering and know your customer policies, thus allowing big banks to more confidently bank cannabis.
Still, as more online websites can serve cannabis customers, there could be increasing reasons to incorporate cryptocurrencies, but the legal implications of so doing might hinder this process. Still, you can buy seeds online, and that’s definitely something.
When it comes to blockchain inspired technology in the cannabis payments space, there are technologies which stand out, such as Tokken, which applies blockchain lessons to the cannabis industry in order to bolster AML, KYC and back office business processes. Further, the CHEX platform seeks to utilize all aspects of the blockchain to launch a hemp and cannabis exchange, something any real financial market needs.
Disclaimer: The views expressed in the article are solely that of the author and do not represent those of, nor should they be attributed to CCN.
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Last modified: May 21, 2020 10:17 AM UTC